85GQ Anz Bank 43

RNS Number:0075X
Nippon Sheet Glass Company Limited
22 May 2007



Nippon Sheet Glass announces Revision of Operating Result Outlook and

Recognition of Extra-ordinary Loss



Nippon Sheet Glass Co., Ltd. ("the Company") announces the revisions made to its
outlook of consolidated and non-consolidated operating results published on 6
July 2007 and the recognition of extra-ordinary loss for the full fiscal year
2007 ( April 2006 through March 2007 ) as below.


After the closing of the acquisition of Pilkington in June 2006, the Company
announced its forecast of operating result on 6 July 2007. However, due to a
number of unpredictable factors for financial projection, including valuation of
intangible fixed assets and goodwill, recognition of various expenses related to
the acquisition and the foreign currency fluctuation, the Company has been
reserved its revision since then. Now the Company announces its revised outlook,
partly because the policy of the said factors has been fixed and also because
some extra-ordinary items have been recognized.



The announcement of the full year result is scheduled on 31st May 2007.



I. Revised forecast for the full fiscal year 2007 ( April 2006 through March
2007 )



1. Consolidated

                                                          ( Unit: JPY million, % )
                                Net Sales        Income before extra-    Net Income
                                                  ordinary items
Previous forecast (A) of          680,000                 25,000             30,000

6 July 2006
Revised forecast(B)               680,000                 8,000              15,000
Change(B-A)                            0                   (17,00           (15,000)
Change (%)                             0%                  (68.0%             (50.0%)
Previous year result (FY 2006)      265,888                 10,4              7,764


2. Non-consolidated




                                                            ( Unit: JPY million,% )


                            Net Sales         Income before                Net Income
                                              extra-ordinary items

Previous forecast (A) of 6       183,000                   0                     20,000
July 2006
Revised forecast(B)              177,000                (2,500)                  17,000
Change(B-A)                      (6,000)                (2,500)                 (3,000)
Change (%)                       (3.3%)                    -                    (15.0%)
Previous year result (FY         172,095                 1,725                   1,206
2006)





II. Recognition of extra-ordinary looses


1. Write-off of assets of information system derived from the group integration
( JPY 6.1 billion in consolidated and non-consolidated basis ) The Company has
been replacing its obsolete software for group IS mainframe into a new platform
from 2002 step by step, a part of which is already in use.

At the opportunity of the full-scale integration of flat glass business with
Pilkington, the Company decided to re-construct the group wide information
systems with a view to unify the business organization.

Due to the decision, the Company writes off the assets of flat glass business
software under development, of which the aggregate sum of the expenditure spent
so far amounts to JPY 6.1 billion, approximately.


2. Capital loss for the sale of share of associates in Japan ( JPY 1.1 billion
in consolidated and non-consolidated basis )The Company recoginised JPY 1.1
billion loss from the sale of associates' shares upon the disposal of its
shareholding in a fibre glass business associates in Japan.



3. Impairment loss by write-off of shares in subsidiaries in Japan ( JPY 1.3
billion in non-consolidated basis ) The Company incurred an impairment loss by
writing off the shares in a subsidiary of building products business in Japan.


III. Reasons for revision of the forecast

1. Non-consolidated



(1)The income before extra-ordinary items is expected to be lower than initially
forecasted, due to the fuel cost
increase amid recent oil price surge and also the impact by the production
adjustment done in the first half year
in a building products item.



(2) The net income is expected to be lower than its forecast, mainly because of
the write-off of software assets mentioned in the item II-1, in addition to the 
reason in the above item III-1-
(1) at the income before extra-ordinary
items level.



2. Consolidated

(1) The income before extra-ordinary items is expected to be lower than
initially forecasted, due to the following reasons:

(i) The factors at non-consolidated basis in the item III-1.

(ii) The change in the calculation and value of the goodwill and intangible
fixed assets relevant to the acquisition of Pilkington.( The effect on the
income before extra-ordinary items: while it was around JPY8.2 billion in the
original plan, the revised outlook expects approximately 16.3 billion. )

(iii) Further increase in goodwill, due to the provision to be made against the
future risk relevant to the receipt of the Statement of Objections for the
suspected infringement to EU competition regulations.

       Amount:  a) JPY 3 billion for goodwill amoritsation charge plus

                b) JPY 3 billion for the period cost accrual for the gap between 
                   the present value and future disbursement.

       Calculation base: Straight line amortization in 20 years of the
theoretically estimated fine, 
                GBP350 million in full.

Based on the fact that Pilkington Group Limited ("Pilkington"), a member of NSG
Group, received a Statement of Objections from the European Commission for
alleged violations of competition rules in the European building products and
automotive glass on 13 March 2007 and 20 April 2007, respectively, the Company
decided to make a provision against financial risk in future in accordance with
the local accounting principles.
The sum of the said provision has been arrived by having regard to the currently
available information, including the guidelines of the method of setting fines
published by the Commission.By amortising the goodwill resulting from this
provision in 20 years, in addition to the existing ones, the increase in the
annual amotisation charge is approximately
JPY 4 billion ( JPY 3 billion for FY 2007, due to the consolidation only for
three quarters. ) This provision is purely because of accounting purpose only
and it is expected that, after the due process of the administrative procedures,
the decision by the Commission will be made approximately nine to twelve month
from the receipt of each Statement of Objections.There has been no indication of
the sum of the fines from the Commission.



(2) The net income is expected to be lower than its forecast, in addition to the
factors of item III-2-(1) at income before extra-ordinary income level, mainly
because of the recognition of extra-ordinary loss as mentioned above item II.



END




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