Announcement of Non-consolidated Semiannual Results 1999

November 18, 1999

Nissho iwai corporation today reported its non-consolidated(parent company alone) financial results for the six-month periods ended September 30, 1999.

Results of Operations

Analysis of Net Sales

On a nonconsolidated basis, net sales (total trading transactions) declined \918.5 billion, or 22.8%, to \3,118.3 billion, reflecting the withdrawal from low-margin transactions as part of the Company's management policy. By trade category, exports declined 18.7% to \468.3 billion and imports fell 35.9% to \650.6 billion. Performance in both categories reflected lower transactions for machinery and information, and metals. Offshore transactions were down 27.6% to \677.9 billion owing to lower transaction levels in energy and chemicals, and domestic transactions decreased 12.5% to \1,321.5 billion as a result of declines in metals and consumer products.     By commodity type, energy and chemicals declined by 41.5%, metals by 24.6%, consumer products by 16.4%, and machinery and information by 10.4%.

Analysis of Net Income

Gross trading profit declined \10.8 billion, or 17.6%, to \50.3 billion. However, the gross trading profit ratio improved from 1.51% to 1.61%, and operating income climbed \3.7 billion, or 57.6%, to \10.1 billion as a result of lower selling, general and administrative expenses.     In the first half of the previous fiscal year, Nissho Iwai recorded a special dividend from an affiliated company of \8.2 billion as part of a process to liquidated underperforming financial assets. As such measures were not necessary in the interim period under review, a decrease in dividends led to a \5.6 billion, or 33.6%, decline in recurring profit to \11.0 billion.     As with consolidated results, nonconsolidated results include a provision for doubtful receivables of \6.0 billion as an extraordinary loss to cover irrecoverable claims, which were announced on November 12, 1999. Consequently, the Company recorded a nonconsolidated interim net loss of \3.5 billion, reversing its earlier forecast of net income of \2.5 billion announced on May 20, 1999.

Full-Term Forecast and Dividend Policy

Forecast

For the full fiscal year ending March 31, 2000, management forecasts nonconsolidated total trading transactions of \6,500 billion. Although gross trading profit is forecast to decline \17.6 billion, or 14.4%, to \105 billion, management forecasts operating income of \25 billion, an increase of \3.1 billion, or 14.3%, assuming a \20.8 billion, or 20.6%, decline in selling, general and administrative expenses to \80 billion.     We forecast recurring profit of \21.5 billion and net income of \6 billion, unchanged from forecasts announced at the beginning of the term.

Dividend Policy

The Company considers shareholder return and dividend policy to be among the most important management issues, and intends to return profits to shareholders through a stable dividend policy in line with operating results.     However, to conserve internal reserves, management has decided to suspend interim cash dividend payments, and has not yet made a decision concerning year-end dividends. We ask for the understanding of our shareholders as we implement our strategy to reinforce our financial position and boost operating performance.

Cautionary Statement

The forward-looking information in the semiannual results is subject to risks and uncertainties that could cause actual results to differ materially from this information. It is based on management's assumption and beliefs in light of the information currently available to it.

Results of Operations(Consolidated) Brief Notes of Consolidated Semiannual Results 1999 Results of Operations(Non-consolidated) Brief Notes of Non-consolidated Semiannual Results 1999