INTERIM RESULTS

The board of directors of Singamas Container Holdings Limited (the "Company") are pleased to announce the unaudited consolidated interim results of the Company and its subsidiary companies (together the "Group") for the six months ended 30th June, 1997 together with comparative figures for the corresponding period of 1996 are as follows:

Notes:

1. Turnover

Turnover represents revenue from container manufacturing, container depot and terminal, and mid-stream operations.

2. Taxation

Hong Kong taxation has been calculated at the rate of 16.5% (1996: 16.5%) on the estimated assessable profits for the six months ended 30th June, 1997. Overseas taxation has been calculated on the estimated assessable profit for the period at the rates prevailing in the countries in which the Group operates.

The taxation charge is made up as follows:

3. Earnings/(Loss) per share

The calculation of earnings/(loss) per share is based on earnings of HK$1,298,000 (1996: loss of HK$31,419,000) and the weighted average number of 456,000,982 ordinary shares in issue (1996: 380,000,800 ordinary shares) during the period.

Fully diluted earnings/(loss) per share is not shown as there has not been any material dilution during the period.

BUSINESS REVIEW

For the six months ended 30th June, 1997, the Group attained a consolidated sales of HK$531,369,000, an increase of 6.4% over the same period in 1996, registering a consolidated profit after taxation and minority interests of HK$1,298,000 as compared to a loss of HK$31,419,000 in the first half of 1996. The improvement in profitability was mainly attributable to the restructuring and streamlining of the Group's operations and the implementation of effective cost reduction programs during the first half of the year.

Container Manufacturing Operations

Container manufacturing remained the Group's core business accounting for approximately 75.2% of the total turnover. Despite stiff competition in the industry, in particular, in the dry freight container manufacturing business in the People's Republic of China (the "PRC"), the Group's container manufacturing operations achieved sales of HK$399,383,000, representing an increase of 2.5% as compared to the same period last year. Higher sales and better cost control leading to a profit before taxation and minority interests of HK$2,601,000 as compared to a loss of HK$11,385,000 in 1996.

• The conference called by the Marine Products Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the Price Auditing Office of China Customs, held in Beijing, PRC in March, 1997 to enforce minimum selling prices on all export containers that are manufactured in the PRC has stabilized prices.
• Shanghai Pacific International Container Co., Ltd. continued to operate on one shift and produced 17,611 twenty-foot equivalent units ("TEUs"), in the first half of 1997, down slightly by 5.3% from the same period last year. It managed to revert from a loss before taxation and minority interests to a profit of HK$5,418,000 in 1997 primarily due to lower raw material, operating and financial costs.
• P.T. Java Pacific Container Factory ("Java Pacific"), started to operate two shifts since June, 1997 to capture the rising demand of the Southeast Asian region. During the first half of 1997, Java Pacific produced 4,756 TEUs, a 39.5% increase from 1996.
• The merger of the two largest collapsible flatrack container ("flatrack") leasing companies was completed and the demand for flatrack resumed to normal. During the first six months in 1997, Singamas Container Industry Co., Ltd. ("Singamas Container") produced 1,656 TEUs, as compared to 500 TEUs produced in the same period last year.
• Performance of Shanghai Reeferco Container Co., Ltd. ("Shanghai Reeferco"), specialising in the production of environmentally friendly Chlorofluorocarbon, i.e. CFC, free refrigerated containers ("reefer"), was affected by the downturn in the reefer container leasing market, increasing number of entrants and oversupply of reefer. Consequently, Shanghai Reeferco produced 542 units of reefer only during the period under review.

Container Depot and Terminal Operations

During the first half of 1997, the Group's container depot and terminal operations attained sales of HK$76,123,000, a slight decrease of 1.6% from the same period last year. Despite the drop in sales, profit before taxation and minority interests increased to HK$10,099,000 from 1996. Improved profitability was principally attributable to the PRC terminal operations.

• The empty container storage business of the Hong Kong depot operations was affected by the substantial increase in cargo throughput in Hong Kong and the increase in the repositioning of empty containers from Hong Kong to the PRC. As a result, the Hong Kong depot operations registered sales of HK$42,569,000 (1996: HK$56,212,000) with a profit before taxation and minority interests of HK$5,724,000 (1996: HK$6,961,000).
• The Group's five PRC container terminals, strategically located in Shanghai, Tianjin, Qingdao, Ningbo and Xiamen, achieved sales of HK$33,554,000, representing an increase of 58.5% over the first half of 1996. A profit before taxation and minority interests of HK$4,375,000 was attained as compared to a loss of HK$3,901,000 in 1996. This improvement was primarily due to the Group's five container terminals have well established themselves in the market with well run operations and the growing cargo throughput in the five PRC ports where these terminals are located.
• The financial benefits of the Group's Xiamen terminal began to materialize and contributed positively to the Group in the month of May, 1997.

Mid-Stream Operation

Even though the Group's mid-stream operation was still incurring losses during the period under review, its loss before taxation and minority interests reduced substantially from HK$24,051,000 in the first half of 1996 to HK$6,965,000 in 1997. With hard work and dedicated marketing efforts, sales of the mid-stream operation increased by 72.8% to HK$55,863,000 during this period. It handled a total throughput of 105,918 TEUs in the first half of 1997 as compared to 40,278 TEUs in 1996. Higher turnover and better cost control were mainly accounted for the improved performance.

PROSPECTS

• The Group will continue to enforce its cost reduction programs implemented early 1997 and constantly improving its production and operational processes to increase efficiency to achieve better results.
• The global demand for flatrack is increasing and Singamas Container has already secured orders up to November, 1997. It is expected that Singamas Container will continue to provide satisfactory contribution to the Group in the second half of the year.
• To capture the rising container demand in the Southeast Asian region, Java Pacific started a second production shift in June, 1997 and it is expected that its production volume will increase in the remaining year.
• Shanghai Reeferco plans to produce other specialized containers, such as open-top and pallet-wide containers, in the third quarter of 1997. The Company believes that these new products will improve Shanghai Reeferco's performance in the second half of the year.
• During the first half of 1997, the cargo throughput in Hong Kong and the PRC increased substantially and the Company is confident that the container terminal and the mid-stream operations will benefit from this growth.

INTERIM DIVIDEND

The directors of the Company have resolved not to declare any interim dividend for the six months ended 30th June, 1997 as working capital is required by the Company to finance its daily operations, which will benefit the Company's long term profitability.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

There was no purchase, sale or redemption of the Company's shares or other listed securities by the Company or any of its subsidiary companies during the period.

By Order of the Board
Chang Yun Chung
Chairman

Hong Kong, 28th August, 1997

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