Moody’s Reviews Mitsubishi Materials

Tokyo, October 14, 2004 -- Moody’s Investors Service today placed on review for possible upgrade the Ba1 long-term debt ratings of Mitsubishi Materials Corporation (Mitsubishi Materials). The review reflects Moody’s expectation that Mitsubishi Materials’ credit profile will improve as a result of continuing structural reform and cost cuts, and partly from improving fundamentals for non-ferrous metal products. Progress with structural reform and recovering fundamentals has driven improvement in Mitsubishi Materials’ financial results in the past two years. Operating margin rose to 4.6% for the year ended March 2004 from 1.0% two years earlier. While its total debt to total capitalization ratio still remained high at over 70% in March 2004, the company reduced over 100 billion yen in debt over the previous two years.

In the review, Moody’s will focus on management’s growth strategy for its four core business segments (copper, cement, aluminum and fabrication) and the outlook for continuing cost improvement efforts. The review will further focus on the strategy’s impact on Mitsubishi Material’s future cash flow and equity base, and how the company’s financial leverage might improve over the next few years.