Oiles Corp. Business Report FY2006

Business Highlights

Financial overview
(in millions of JPY) FY2006 FY2005 Rate of
Change (%)
Factors
Overall
Sales 55,344 51,822 6.8 -
Operating income 6,362 4,533 40.3 -
Ordinary income 6,769 4,926 37.4 -
Net income 3,706 2,713 36.6 -
Bearings business
Sales 34,905 31,967 9.2 see note 1) below
Operating income 5,074 4,520 12.3

Factors
1) Sales to automakers steadily increased, thanks to increased production volumes of Japanese automakers and new orders received. In addition, the Company's global business dealings with automakers overseas also increased.

Global business
-Oiles Czech Manufacturing s.r.o., the Company's production site in the Czech Republic manufacturing automotive products for the European market, is expanding its site to cope with increased needs by automakers. The work involved with enhancing the production capacity will be completed in January 2008.

R&D

Capital Investment
(in millions of JPY) FY2006 FY2005 FY2004
Group 2,447 2,296 2,473
% of Sales 4.4% 4.4% 5.1%
-The number of people in charge of research and development is 158.

Status of R&D on bearings
-The Company developed cam units to be used in thick plates and high-tensile materials needed in automotive stamping dies. The cam units have excellent workability and resistance, making them ideally suitable for processing high-tensile steel.

Investment Activities

Investment