Note: All financial information has been prepared in accordance with generally accepted accounting principles in. Japan. This document has been translated

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Sumitomo Heavy Industries, Ltd. CONSOLIDATED REPORT FY 2005, 1H For the Six-Month Period to September 30, 2005 Note: All financial information has been prepared in accordance with generally accepted accounting principles in Japan. This document has been translated from the Japanese original as a guide to non-Japanese investors and contains forward-looking statements that are based on managements™ estimates, assumptions and projections at the time of publication. A number of factors could cause actual results to differ materially from expectations. Amounts shown in this financial statement have been rounded down to the nearest million yen.

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Consolidated Results 1 Consolidated Results FY 2005 1H November 10, 2005 CONSOLIDATED FINANCIAL RESULTS For the First Half Ended September 30, 2005 Sumitomo Heavy Industries, Ltd. Listed Exchanges Tokyo Stock Exchange Stock Code 6302 Head Office Tokyo President Yoshio Hinoh URL Inquiries Hideo Ohshima, General Manager, Corporate Communications Dept. Telephone +81 3 5488 8219 Date of the Board of Directors meeting concerning consolidated interim accounts November 10, 2005 U.S. GAAP accounting principles Not adopted 1. FY 2005 1H Consolidated Results (April 1, 2005 to September 30, 2005) (1) Business Results (Units: millions of yen) First Half Previous First Half Previous Full Term April 1, 2005 to September 30, 2005 April 1, 2004 to September 30, 2004 April 1, 2004 to March 31, 2005 % change % change Net Sales 245,857 3.3 238,078 11.9 521,310 Operating Income 18,494 (13.0) 21,263 55.7 48,773 Ordinary Income 18,520 (17.2) 22,355 105.7 47,853 Net Income 12,527 15.5 10,850 136.4 22,792 Net Income per Share (yen) 20.83 18.03 37.80 Fully Diluted Net Income per Share — — — *Notes: (1) Gain from investments in subsidiaries and affiliated companies accounted for by equity method: September 2005: 1,714 million yen September 2004: 2,485 million yen March 2005: 4,080 million yen (2) Average number of outstanding shares for the term (consolidated): As of September 2005: 601,535,553 shares As of September 2004: 601,927,871 shares As of March 2005: 601,826,660 shares (3) Changes to accounting procedures: Yes (4) Percentages for net sales, operating income, ordinary income and net income represent year-on -year changes.

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Consolidated Results 2 Consolidated Results FY 2005 1H (2) Financial Position (Units: millions of yen) End of First Half End of Previous First Half End of Previous Full Year As of Sept. 30, 2005 As of Sept. 30, 2004 As of March 31, 2005 Total Assets 562,609 558,334 569,771 Shareholders™ Equity 148,252 124,255 137,156 Equity Ratio (%) 26.4 22.3 24.1 Shareholders™ Equity per Share (yen) 246.50 206.45 227.90 *Notes: Number of shares outstanding at the end of the period (consolidated): As of September 30, 2005: 601,419,314 shares As of September 30, 2004: 601,871,903 shares As of March 31, 2005: 601,644,571 shares (3) Cash Flows (Units: millions of yen) First Half Previous First Half Previous Full Year April 1, 2005 to September 30, 2005 April 1, 2004 to September 30, 2004 April 1, 2004 to March 31, 2005 Cash Flow from Operating Activities 25,638 26,104 45,451 Cash Flow from Investing Activities (2,010) (3,493) (6,087) Cash Flow from Financing Activities (25,944) (34,532) (46,490) Cash and Cash Equivalents at Period End 46,988 45,763 49,108 (4) Scope of Consolidation and Application of equity method: Number of consolidated subsidiaries: 90 Number of non-consolidated subsidiaries accounted for by the equity method: 2 Number of affiliates accounted for by the equity method: 8 (5) Changes in the scope of consolidation and Application of equity method: Consolidated subsidiaries: (New) 1 (Removed) 2 Equity method: (New) — (Removed) — 2. FY 2006 Consolidated Forecasts (April 1, 2005 to March 31, 2006) (Units: millions of yen) Full Year April 1, 2005 to March 31, 2006 Net Sales 540,000 Ordinary Income 41,000 Net Income 23,500 *Notes: (1) Projected net income per share for FY2005 (ending March 31, 2006): ..39.07 yen (2) Please consult page 10 of 3. Outlook for Fiscal Year in III. Business Results and Financial Position section for further information concerning the projections.

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Consolidated Results 3 Consolidated Results FY 2005 1H I. State of the Group Environmental Protection Facilities, Plants & Others Ship, Steel Structure & Other specialized Equipment Industrial Machinery Sumitomo Heavy Industries (Parent Company) Construction Machiner y Mass-Produced Machiner y Seisa Gear Ltd. Sumitomo NACCO Materials Handling Co., Ltd. SHI Plastics Machinery Sumitomo (S.H.I.) Construction Machinery Sales Co., Ltd. Shin Nippon Machinery Co., Ltd. Sumitomo Heavy Industries Engineering & Services Co., Ltd. Sumitomo Heavy Industries Techno- Fort Co., Ltd. Sumitomo Heavy Industries Marine & Engineering Co., Ltd. Sumiju Environmental Engineering, Inc. Nihon Spindle Mfg.Co., Ltd. Izumi Food Machinery Co. Ltd. Lightwell Co., Ltd. Sumitomo Machinery Corporation of America Sumitomo (SHI) Cyclo Drive Germany, GmbH Sumitomo (SHI) Cyclo Drive Asia Pacific PTE. Ltd. Sumitomo (SHI) Cyclo Drive China, Ltd. Sumitomo Heavy Industries PTC Sales Co., LTD. SHI Plastics Machinery, Inc. of America Sumitomo Eaton Nova Corporation Sumitomo (S.H.I.) Construction Machinery Co., Ltd. Hitachi Sumitomo Heavy Industries Construction Crane Co., Ltd. Link-Belt Construction Equipment Company Sumitomo (S.H.I.) Construction Machinery Co., Ltd Sumitomo (S.H.I.) Construction Machinery Manufacturin g Co., Ltd. Sumitomo Heavy Industries Himatex Co., Ltd.

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Consolidated Results 4 Consolidated Results FY 2005 1H II. Management Policies 1. Basic Management Policies The Group believes that securing long term customer trust through continuously “building value for consumer” is interconnected with the Group’s efforts to maintain sustained development and increase business worth, and reflects the desires of shareholders, employees, and the local community. In order to realize high, stable growth on a global level, the Group intends to be an “organized, knowledge-building- type company” that provides quality products to customers. Then, the Group will strengthen marketing, research and development, and production, and focus even more closely on the product itself. 2. Basic Policies Relating to Profit Distribution The Company’s basic policy is to pay shareholder dividends according to periodic income and to continue to increase these dividends, while replenishing internal reserves necessary for stable, long-term business development. 3. Medium- and Long-Term Management Strategies Under “Leap to Excellence ‚07”, the new FY2005 medium term management plan, the Group is forging an independent, vertically integrated business management model from the inter-business value chain model that it previously followed. In order to create this new management model, about 50 business units will be reorganized into three segments. The new segments will be “Key Components”, centered on speed reducer and transmission equipment, precision control equipment, and other components; “Appliances”, centered on injection molding machine; and “Total Systems”, consisting of systems such as materials handling systems and energy plants. These segments will be tied together through the value chain: fiAppliancesfl will be differentiated from “Key Components”, and fiTotal Systemsfl will be differentiated from ” Appliances “. Additionally, a base for stable growth was formed as a result of strengthening the Group’s financial position during the previous medium term management plan. This will make it possible to accept a certain degree of risk and carry out aggressive investment during “Leap to Excellence ‚07”, which in turn will allow business expansion in the future. As for investment in research and development, it is believed that there are several possibilities for development of new products between “Key Components” and ” Appliances”. This area promises potential for new products, and is driving a revolution in the prioritization of research and development investment. “Leap to Excellence ‚07”, the new medium term management plan, calls for the following quantitative indicators to be met by the end of 2007. Operating income: More than 60 billion yen Interest bearing debt: Less than 150 billion yen The plan further calls for keeping ROIC (return on invested capital), a Group management indicator, above WACC (weighted average cost of capital), and above 10%. 4. Issues to be Addressed The Group, in accordance with its new growth strategy, is, in addition to striving to revolutionize business building, marketing, product development, and craftsmanship, also exerting itself to build value for customers by providing quality products. In this first half, selective capital investment in speed reducer and transmission equipment, a mechatronics business, a speed reducer n and transmission equipment business fusion project, and other business expansion and strengthening measures were carried out as means to manufacture quality products. Further, the Group has continued to invest aggressively in the cultivation and appropriate posting of personnel and increasing educational opportunities to improve organizational strength.

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Consolidated Results 5 Consolidated Results FY 2005 1H Finally, the new personnel system introduced last Fiscal Year was firmly established, with clearly delineated objectives for each employee’s position and performance evaluations based on those objectives which allows the Group to promote an organizational structure that provides increased job satisfaction. 5. Basic Approach to Corporate Governan ce and the Status of its Implementation (1) Basic Approach to Corporate Governance In order to increase business worth and, starting with stockholders, raise the confidence of customers, Company employees, the community, and other stakeholders, the Company is establishing an efficient and highly transparent management system as the basis of corporate governance. (2) Status of Corporate Governance Implementation A. Condition of upgrades to compliance and risk management within the internal control system The Company has adopted the auditor system. Within this framework, it introduced the executive officer system in 1999, separating business management functions and supervisory functions. The board of directors is small, consisting of only 9 directors, of which 1 member is elected from outside of the Company. The board works hard to insure that management remains transparent and that management supervisory functions are strengthened. The board of directors deliberates items specified by commercial law. Important management issues are also selected beforehand for discussion. In addition, the Compensation Committee, an advisory body to the board of directors, half of whose members come from outside the Company, was established in order to insure transparency and the appropriateness of the directors’ compensation. The Auditing Committee consists of 4 auditors (of which 2 are external auditors). The organizational audit carried out by the directors and auditors checks for both legitimacy and appropriateness. In addition, the Group periodically holds meetings with auditors from the Company and its affiliates in order to exchange auditing related information and allow the Group’s auditing functions to be carried out fully. Moreover, an Auditing Committee Executive Office, a staff organization subordinate to the Auditing Committee, was established to support the Auditing Committee. There are 16 executive officers (including 8 who serve concurrently as directors) elected to take responsibility for business management. The Group established an Executive Committee, comprised of executive officers, as well as a Group Management Committee, consisting of the presidents of the Company and its primary related companies, and it is carrying out performance management from a consolidated base and following-up management measures. Finally, a Management Strategy Meeting, comprised of the president of the Company and other Company executive officers and held in principle weekly, was established. In addition to serving as a forum for the advance deliberation of items for resolution at the meeting of the board, the Meeting also deliberates key management items within the scope of its authority as delegated by the board.

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Consolidated Results 7 Consolidated Results FY 2005 1H B. Condition of upgrades to compliance and risk management within the internal control system The Company instigated a code of ethics, established an Ethics Committee, and established an internal hotline for reporting unethical behavior in its efforts to maintain and improve respect for law, fairness, and ethical practice in its business activities. The comprehensive risk management system introduced in 2001 was also reinforced and enhanced. Starting in 2004, a Group-wide effort to build and enhance an internal control system that would function to unify business ethics and risk management activities was undertaken. In August of 2004, a risk management office was reorganized within the internal control promotion office as a promotional organization for this activity, and an internal control promotion organization was established within the operations division. In October of the same year, a compliance manual was formulated, and thorough dissemination of compliance throughout the Group was emphasized. By March of 2005, awareness-training activities had been undertaken throughout the entire Group, and throughout the Group’s affiliated companies. Given this background, the current incident involving the violation of Japan’s Antimonopoly Law has been taken seriously. In addition to a resolution to strictly observe Japan’s Antimonopoly Law that was passed at the meeting of the board of directors this July, a message of strict compliance has been sent out repeatedly. In addition, the existing internal control promotion organization, which has the inherent function of strongly promoting compliance, was further expanded. Further concrete management efforts to emphasize compliance, in addition to carrying out the re-education of all employees concerning Japan’s Antimonopoly Law, required all officers and managers (except for auditors) to study and sign a compliance and Antimonopoly Law observance pledge book, and the “Ethics Hotline”, a previously established internal reporting system, has been enhanced by including an external lawyer as the point of contact. In order to enhance compliance where business operations related to public works projects are concerned, in addition to each business division self-checking bids for conformity with compliance issues, a new organization was also created within the Company to monitor orders. Finally, in order to guarantee the effectiveness of these compliance programs, a compliance monitoring function was added to the audit office, the results of which are reported to the board of directors each quarter. 6. Items concerning the Parent Company, etc. Not applicable as the company has no parent company.

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Consolidated Results 8 Consolidated Results FY 2005 1H III. Business Results an d Financial Position 1. Business Results Despite rising costs of materials such as steel and crude oil, Japan’s economy in this first half was characterized by a steady revival of business activity with increases in private capital investment, following a recovery in business revenues, and increases in personal consumption. Overseas, business activity expanded in the United States and China, and to a degree in Europe, where activity showed modest recovery. Against this backdrop, the new mid-term management plan “Leap to Excellence ‚07” was launched. Due to measures in progress to improve profitability, this first half became the third accounting period to post continued increases in both sales and profits (interim simple profit base), and first half net sales and profits posted at the highest levels on record. As regards orders received, the Construction Machinery segment expanded considerably on the back of strong order volume from North America. However, due to a slump in demand for bridges, environment-related works, and other government related demand, orders received totaled 282.4 billion yen, a year-on-year decrease. Net sales increased 3% year-on-year to 245.9 billion yen, the result of strong overseas sales centering on North America. Strong sales were registered in Construction Machinery segment, the turbines & pumps, and forging presses for automobiles in Industrial Machinery segment. The Mass-Produced Machinery segment also experienced strong sales growth in speed reducer and transmission equipment. Regards operating profit and loss, income from the Construction Machinery and Industrial Machinery segment increased. However, a relative year-on-year loss appears in operating income as a result of one-time sales in the real estate section in the previous interim. In the absence of real estate sales in this term, operating income decreased relatively 13% year-on-year to 18.5 billion yen. Non-operating profit and loss also decreased as earnin gs on the equity method de creased. Ordi nary income posted 18.5 billion yen, a year on year decrease of 17%. Extraordinary profits posted at 12.5 billion yen, a year on year increase of 15% and record result for the Company, as a result of major improvements following the absence of the time differential for change in the standard pension benefit plan, which had been depreciating for a 5 year period ending last year, and the absence of losses on disposals of fixed assets. Following these management results, the Company has resolved to pay out a dividend of 2.50 yen per share semiannually. Results for each division are as follows. Mass Produced Machinery Segment Private capital investment in Japan stregnthened since the last accounting period, and overseas business activity improved greatly. Results, especially from activities targeted at the United States, power transmission & controls business showed steady improvement. Plastic machinery business sales in Japan, centering on automobile-related machinery, were steady. However overseas sales decreased, due to a decline in IT-related investment. Precision control equipment and components business sales increased markedly in cyrogenics, precision forged parts and machine tools, and other areas. Orders received totaled 106.1 billion yen, roughly the same year-on-year, while net sales reached 103.6 billion yen, a year-on-year increase of 5%. Operating income posted 13.1 billion yen, a year-on-year decrease of 2.6 billion yen, as sales for plastic machinery fell.

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Consolidated Results 9 Consolidated Results FY 2005 1H Environmental Protection Facilities, Plants, and Others Segment Rising crude oil prices and increasing electric power demand worldwide resulted in an increase for the energy plant segment, however orders for public works construction decreased, and overall orders in the segment registered 37.4 billion yen, a year-on-year decrease of 19%. Net sales totaled 31.9 billion yen, showing a year-on -year decrease of 7%, as this interim had nothing to replace the effect of the real estate section’s sale of part of the land from the Tanashi plant during the previous first half. Operating income posted at 0.1 billion yen, a year-on-year decrease of 2.5 billion yen. Ship, Steel Structure and Other Specialized Equipment Segment Shipbuilding orders for 5 Aframax tankers were awarded, the same number year-on-year, and as ship prices rose, order revenue levels showed an increase. However steel structure and process equipment group orders decreased substantially, and orders for the entire segment totaled 43.9 billion yen, a year on year decrease of 8% . Net sales for the entire segment was 24.3 billion yen, a year-on-year decrease of 4%, as an increase in shipbuilding sales following the delivery of 3 Aframax tankers, however, was offset by a decrease in ship repairs. Operating losses registered 1.3 billion yen, a year-on-year deterioration of 0.7 billion yen, due to the influence of increases in the costs of steel and other raw materials. Industrial Machinery Segment Orders for forging presses for the automobile industry grew, while orders for large cranes also increased after reinvesting in the iron mill. Furthermore, turbines and pumps, centered on overseas business, also remained strong. Orders received totaled 32.8 billion yen, almost the same year-on-year, and net sales reached 27.3 billion yen, a year on year increase of 7%. Operating income nearly doubled year-on-year to 3.1 billion yen, following focus on marketing and exhaustive project management. Construction Machinery Segment Hydraulic excavator sales showed significant expansion overseas, centering on North America. Sales of mobile cranes for construction were also strong, supported by the vigorous market in North America. Orders received rose 11% year-on-year to 62.2 billion yen, and net sales registered 58.9 billion yen, a year on year increase of 8%. Operating income registered 3.5 billion yen, a year on year increase of 1.5 billion yen. 2. Financial Position Due to a steady recovery in collection of trade receivables, total assets posted 562.6 billion yen, a year-on-year decrease of 7.2 billion yen. As a result of asset reduction efforts, interest-bearing debt posted 145.9 billion yen, a year-on-year decrease of 23.3 billion yen, or 25.9% of total assets, a year on year decrease of 3.8 points. Stockholder’s equity results for this first half were strong, posting 148.3 billion yen, a year-on-year increase of 11.1 billion yen, and stockholder’s equity ratio, at 26.4%, showed a year on year improvement of 2.3 points. Cash flows from operating activities totaled 25.6 billion yen, roughly the same as the previous year. Though corporate tax paid showed a year on year increase, we recorded steady progress in collection of trade receivables.

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Consolidated Results 10 Consolidated Results FY 2005 1H Cash flows from investing activities declined to 2 billion yen, a year on year decrease of 1.5 billion yen 9Ø despite income as a result of the clearing off distributions from overseas subsidiary companies from the previous accounting period. Cash flows from financing activities posted a decrease of 25.9 billion yen due to repayment of loans. As a result of the foregoing, cash and cash equivalents at the end of this interim accounting period registered 47 billion yen, a year on year decrease of 2.1 billion yen. Cash Flow Indicators 22000033 22000044 22000055 IInntteerriimm FFuullll YYeeaarr IInntteerriimm FFuullll YYeeaarr IInntteerriimm Shareholders™ equity ratio 17.1 19.7 22.3 24.1 26.4 Shareholders™ equity ratio at market value 25.0 30.7 35.1 44.6 86.1 Years to debt redemption 3.9 2.8 3.5 3.7 2.8 Interest coverage ratio 14.7 19.5 16.1 15.0 18.9 (Notes) 1. Indicators calculated using the following formulae. Stockholders’ equity ratio: Shareholders’ equity/Total assets Stockholders™ equity ratio at market value: Market capitalization/Total assets Years to debt redemption: Interest-bearing debt/Operating cash flow Interest coverage ratio: Operating cash flow/Interest payments 2. All are calculated based on consolidated financial figures. 3. Interest-bearing debt indicates all liabilities posted in the balance sheets on which the Company pays interest. 3. Outlook for the Fiscal Year As for the future business environment, there is some uncertainty, due to rising material costs and hesitant public investment. However, the Group will move forward to achieve the goals of the new medium term management plan “Leap to Excellence ‚07”, and steadily carry out related management measures. The outlook for this year’s performance are as follows. (Units: billions of yen) CCoonnssoolliiddaatteedd AAmmoouunntt NNoonn–ccoonnssoolliiddaatteedd AAmmoouunntt Net sales 540.0 Net sales 265.0 Operating income 45.0 Operating income 19.0 Ordinary income 41.0 Ordinary income 17.0 Net income 23.5 Net income 9.0 *Expectations and outlooks for future performance are rational judgments made based on the information currently available. Therefore, actual results may vary from written expectations and outlooks due to changes in various factors. Please see Business Risks section for detailed information about those factors.

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