Finesinter CO.,LTD Business Report FY2008

Business Highlights

Financial Overview

(in million JPY)

	FY2008	FY2007	Rate of Change (%)	Factors
Overall
Sales	34,064	41,887	(18.7)	Orders in the automotive market drastically declined because of an extreme drop in new car sales in the Company's most important market, the U.S., and a sudden decline in automotive demand in the rest of the global market including Europe and emerging countries.
Operating income	(878)	2,049	-	The Company took some actions to improve production efficiency and cut costs. But such efforts ended without being able to make up for its loss in sales, so the Company inevitably had to report a loss in its income.
Ordinary income	(1,306)	1,641	-
Net income	(2,622)	1,097	-
Powder metallurgy product business
Sales	32,191	39,890	(19.3)	Sales and income declined due to a sudden drop in demand in the automotive market, and also due to higher prices of raw materials.
Operating profit	299	3,330	(90.9)

Performance by region

-Japan

Sales fell by 21.4% or 7,810 million yen to 28,771 million on a year-on-year basis, due to a massive decline in automotive production.

Operating loss dropped by 3,030 million yen to 1,843 million yen on a year-on-year basis, due to higher prices of raw materials.

- Asia

-Sales declined by 113 million yen or 2.5% to 4,392 million yen, due to the growing number of production slowdowns in Thailand and China, where the Company's sales had been steadily increasing.
-Operating income increased by 90 million yen or 9.3% to 832 million yen, thanks to improved productivity.

-North America

Sales increased by 96 million yen or 5.6% to 1,821 million yen, although recent orders are in decline due to the economic slowdown in the world's economies.

Operating income increased by 31 million yen or 32.4% to 129 million yen, partly as a result of its cost reduction efforts.

R&D

R&D Structure

The Company's R&D activities are led by its technology development center and production engineering division.

R&D Expenditures

(in million JPY)

	FY2008	FY2007	FY2006
Overall	286	327	363
Powder metallurgy product business	-	327	363

Powder metallurgy product business (FY2008)

- In the area of materials, the Company worked on developing ecological materials and materials that are highly resistant to friction, in response to the growing diversity of automotive fuels as well as to the development and mass-production of low-priced materials used as alternatives to rare metals.

-In developing its production facilities, the Company is trying to create an innovative production line that achieves cost reductions at an unprecedented level at its new technical center, which was constructed as an addition to its headquarters building in December 2007.

-This fiscal year, the Company developed new forming and sizing press equipment. The Company is going to install this new equipment in the manufacturing division soon.