Nippon Sheet Expects 30 Bln Yen Profit on Pilkington

Date: 12 July 2006
Source: Bloomberg.com

Date: 12 July 2006

Nippon Sheet Glass Co., the world's largest supplier of glass used in buildings and cars, forecasts annual profit will rise almost fourfold after it acquired Pilkington Plc.

Net income may rise to 30 billion yen ($260 million) for the year ending March 31 from 7.76 billion yen a year earlier, the Tokyo-based company said today in a statement. Sales are expected to rise to 680 billion yen from 265.9 billion yen.

Nippon Sheet's 1.8 billion pounds ($3.3 billion) acquisition of Pilkington, completed last month, adds plants in 24 countries and helps it to compete with Asahi Glass Co. in serving Toyota Motor Corp. and other carmakers as they press for global supply contracts for windshields and other auto parts. The purchase also cuts the company's reliance on glass for TVs and computer screens.

``The forecasts are reasonable, and not surprising,'' said Katsumi Hosoi, head of investment research at Maruhachi Securities Co. ``I expect little reaction in trading tomorrow as the effect of the acquisition was already factored in the share price.''

Nippon Sheet Glass also said today it will take a 5.5 billion yen charge to redeem bonds of Pilkington, and post a gain of 42.2 billion yen gain from selling stock holdings.

St. Helens, England-based Pilkington's revenue is divided almost equally between glass used by the construction and auto industries. The acquisition will increase Nippon Sheet Glass's sales from building glass to 333.5 billion yen from 124.4 billion yen, and boost sales from auto glass to 256 billion yen from 55.7 billion yen, according to the statement.

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