NSG is expected to report a 68% rise in group operating profit to about JPY 6.5BN for the 6-m ended 30 Sept as its domestic weakness was more than offset by the strong results at Pilkington Plc which it acquired earlier in 2006. NSG's interim sales are estimated to have roughly doubled to around JPY 265BN. Sales at Pilkington apparently grew about 8%, thanks to the construction boom in such markets as Germany & E Europe. With Pilkington's solid performance, NSG is likely to meet its full-year earnings targets. Group operating profit is seen jumping 320% to JPY 35BN, as the anticipated growth of the EU operations offset the expected decline in profit in the domestic segment, which is being hurt by higher raw materials & fuel costs. NSG's financial position, which was adversely affected by the Pilkington purchase, will likely improve sooner than expected. The balance of its interest-bearing debt has increased by some JPY 430 billion since the end of March 2006. However, the new UK unit is generating a higher free cash flow than anticipated, allowing the Japanese parent to repay debt more quickly.
