Revision of Projections for the Fiscal Year ending March 31, 2007

Komatsu Ltd. has revised the projections for consolidated and non-consolidated results for the fiscal year ending March 31, 2007, which the Company announced on April 27, 2006.

In the construction and mining equipment business, the Komatsu Group anticipates that demand in Japan, China, Africa and some other countries and regions will become stronger than previously projected, in addition to firm demand in the major markets of North America and Europe.
The Komatsu Group has been expanding its production capacities as planned, responding to an increase in demand. The Group has also been working to secure procurement of parts and components through tight-knit collaboration with suppliers. Furthermore, the Group expects an additional increase in sales of new equipment, including renewed models, which it has aggressively been launching in response to Tier III emission controls.
In view of these factors above, the Komatsu Group projects that consolidated sales, operating profit, income before income taxes, and net income will exceed the earlier projections by ¥87.0 billion, ¥28.0 billion, ¥27.0 billion, and ¥15.0 billion, respectively.

Komatsu Ltd. and SUMCO Corporation (hereinafter "SUMCO") reached a basic agreement concerning SUMCO's Tender Offer for 51% of the outstanding shares of Komatsu Electronic Metals Co., Ltd. (hereinafter "KEM"). Komatsu agreed to accept the Tender Offer. After certain procedures, such as due diligence, are completed and upon execution of an agreement regarding the Tender Offer, SUMCO will acquire 51% of the common shares issued by KEM through the Tender Offer. Given that the Tender Offer is completed within the current fiscal year, Komatsu projects its business results for the entire year as below.

The announcement set forth herein contains forward-looking statements which reflect management's current views with respect to certain future events, including expected financial position, operating results, and business strategies. These statements can be identified by the use of terms such as "will," "believes," "should," "projects" and similar terms and expressions that identify future events or expectations. Actual results may differ materially from those projected, and the events and results of such forward-looking assumptions cannot be assured.
Factors that may cause actual results to differ materially from those predicted by such forward-looking statements include, but are not limited to, unanticipated changes in demand for the Company's principal products, owing to changes in the economic conditions in the Company's principal markets; changes in exchange rates or the impact of increased competition; unanticipated cost or delays encountered in achieving the Company's objectives with respect to globalized product sourcing and new Information Technology tools; uncertainties as to the results of the Company's research and development efforts and its ability to access and protect certain intellectual property rights; and, the impact of regulatory changes and accounting principles and practices.