ISEKI > News Releases

May 20, 2005

ISEKI & CO., LTD.

Supplementary Explanation to the Financial Results

(1.April 2004 - 31.Mar 2005)

Consolidated Performance

(Units: billions of yen)

FY 2003

actual

FY 2004

actual

Change

nominal

Net Sales

Operating Income

Ordinary Income

Net Income

153.6

6.4

5.1

3.1

157.4

6.5

5.3

3.0

3.8

0.1

0.2

-0.1

2.5

2.2

3.8

-3.6

(1)

Net sales advanced 3.8 billion ( up 2.5%) on the same period.

	Domestic sales rose 1.2 billion (up 0.9%) on the same period.
		Despite the impact of the natural disasters, sales increased owing to the high evaluation of newly launched automatic transmission tractor models as well as to the effects of a campaign encouraging prospective customers to test-operate various products.
	Overseas sales rose2.6 billion (up 19.2%) on the same period..
		In the North American market, the high evaluation of new tractor models and the GC series subcompact tractor models supported a large rise in revenues. Sales performance in European and Asian markets was also robust.

(Units:billions of yen)

FY 2003
actual

FY 2004
actual

Change

Agricultural Machinery

Parts and farming implements,Ohters

73.5

66.8

74.1

67.4

0.6

Domestic subtotal

140.3

141.5

1.2

Overseas subtotal

(Export products)

13.3

(11.5)

15.9

(14.6)

2.6

(3.1)

Total

153.6

157.4

3.8

(2)

Operating income increased 0.1 billion (up 2.2%) on the same period.

Although operating income was negatively impacted by a deterioration in the profitability of hydroponic facility operations (-

0.4 billion) and by temporary costs associated with a rapid rise in manufacturing volume (-

0.5 billion, operating income was slightly boosted due to a revenue increase, cost reductions, and efficiency increases.

(3)

Ordinary income increased 0.2 billion(up 3.8%) on the same period.

Ordinary income was up, mainly owing to an improvement in the balance of financial expenses and income (

0.2 billion).

(4)

Net income depressed 0.1 billion( down 3.6%) on the same period.

Although extraordinary income grew because of such factors as a gain on the sale of credit business operations, net income declined slightly, reflecting such factors as a rise in the income tax burden.

Reduction of consolidated interest-bearing liabilities

(Units:billions of yen)

FY
2003
actual

FY
2004
planed

FY
2004
actual

Change

from
the three-year
Business Plan

from
period last year

78.3

75.0

61.2

-13.8

-17.1

FY 2005
Planed
(the three-year
Business Plan )

69.0

* Including

10.0 billion in convertible bonds issued in October, 2004.

The balance of consolidated interest-bearing debt decreased

17.1 billion, to

61.2 billion, owing to factors that included measures to increase capital utilization efficiency and the use of income from the sale of credit business operations to repay debt.

The current three-year business plan calls for reforming the Company's revenue structure and strengthening its financial position through the implementation of such measures as those to reduce inventory levels, the balance of interest-bearing liabilities, and revenue losses. As a result, the balance of interest-bearing liabilities was lowered to the

60.0 billion bracket, thereby enabling the Company to attain its three-year business plan at one year in advance of schedule.


3.	Forecast for the Year ending March 31,2006 Operating Results(Consolidated)

(Units: billions of yen)

FY2004
actual

FY2005
forecast

Change

nominal

Net Sales

Operating Income

Ordinary Income

Net Income

157.4

6.5

5.3

3.0

163.0

8.5

7.5

4.0

5.6

2.0

2.2

1.0

3.6

30.8

41.5

33.3


(1)	Net sales are projected to grow 5.6 billion (up 3.6%)

(Units: billions of yen)

FY2004
actual

FY2005
forecast

Change

nominal

Domestic Sales

141.5

146.0

4.5

3.2

Overseas Sales

(Export products)

15.9

(14.6)

17.0

(16.5)

1.1

(1.9)

6.9

(13.0)

Net Sales

153.6

16.3

5.6

3.6

Domestic net sales are projected to grow 4.5 billion (up 3.2%).
	Because the GEAS-AT series tractors launched in June 2004 and new products launched during fiscal 2005 will strengthen the product lineup, sales growth centered on tractors is anticipated.

Overseas net sales are expected to increase 1.1 billion (up 6.9%).
	Sales growth is expected to result from the January 2005 launch of new tractor models for North American and European markets and March 2005 launch of Zero-Turn Mower riding mowers.
	In China, the full-scale marketing of combine harvesters began from April 2005.

(2)

Operating income is projected to rise

2.0 billion (up 30.8%).

Despite the negative effect on profitability of rising procurement prices and other factors, operating income is expected to rise

2.0 billion, owing principally to the absence of the temporary factors that depressed profitability in fiscal 2004 (

0.9 billion) as well as net sales growth and operating cost reductions.Measures to strengthen the manufacturing system are being implemented from May 2005.

(3)	Ordinary income is projected to increase 2.2 billion (up 41.5%).
	An improvement in the balance of financial items and other factors are expected to boost ordinary income 2.2 billion.

(4)	Net income is projected to grow 1.0 billion (up 33.3%).
	Despite anticipated losses on the impairment of fixed assets, it is anticipated that net income will rise 1.0 billion.

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