Results of Operations

1.	Analysis of Net Sales As part of the management policy described above, we have been engaged in further reshuffling of our business portfolio, which entailed withdrawal from non-core businesses and low-margin transactions and shifting focus to core businesses in order to improve the earnings structure. As a result, net sales (total trading transactions) decreased 12.1% to ¥3,298.9 billion, down ¥452.3 billion from the previous year. By trade category, exports accounted for ¥426.1 billion, down 18.3% from last year, mainly due to a lower level of exports in the Chemical and Machinery sectors. Imports grew by 3.1% to ¥743.1 billion, owing mainly to an increase in Energy sector imports. Offshore transactions declined to ¥751.6 billion, mainly as a result of decline in the Machinery, General Merchandise and Housing Materials sectors. Domestic transactions declined 11.2% to ¥1,378.1 billion; the largest contributing factors being a decrease in the Machinery, Housing Materials, General Merchandise, and the Construction Industry sectors. By commodity category, almost all sectors saw a decline - Machinery 28.6%, Construction and Urban Development 25.5%, Housing materials and General Merchandise 18%, Consumer products 10.4%, Metals 5.1%, and Chemicals 4.3%. However, transactions in the Energy sector grew 31.4%.
2.	Analysis of Net Income Gross trading profit increased 7.4% (¥9.5 billion) to ¥138.1 billion, while the gross operating profit ratio improved from 3.43% to 4.18%. After deducting the SG&A expenses, operating income came to ¥28.7 billion, an increase of ¥7.8 billion (37.8%). Owing to special measures taken for dealing with market-value accounting rules and further efforts to reinforce our financial structure, extra-ordinary losses of ¥79.7 billion were booked (Investment securities revaluation loss: ¥ 29.8 billion; Interest-rate swaps revaluation losses: ¥ 20.4 billion; Provision for overseas doubtful receivables: ¥10.5 billion; Loss on translation of receivables and payables in foreign currencies: ¥9.1 billion). On the other hand, finances raised through extra-ordinary profits of ¥78.4 billion (mainly through the sale of investment securities), helped offset the loss to a large extent, leading to a total extra-ordinary loss of ¥1.3 billion. As a result, consolidated net profit of ¥5.6 billion was registered for the first-half of fiscal 2000, after deduction of ¥9.1 billion as corporate income tax.

Consolidated Financial Statements Non-Consolidated Financial Statements To Our Stakeholders Results of Operations Outlook for Fiscal Year 2000