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(Hong Kong, 24th August, 1998) -- Singamas Container Holdings Limited ("Singamas"), one of the world's leading container manufacturers, container depot/ terminal and mid-stream operators, today announced its interim results for the six months ended 30th June, 1998.

In the first half of 1998, the Group attained consolidated sales of US$75,255,000 million and a consolidated profit after taxation and minority interests of US$504,000. This exceeded the same period in 1997 by 9.7% and 188% respectively. Earnings per share was US 0.11 cents as compared to US 0.04 cents last year.

Mr. Chang Yun Chung, Chairman of Singamas said, "We are pleased to report that under the current economic conditions, the Group was still able to register steady growth in profit. This encouraging performance was mainly due to the Group's implementation of effective cost control measures, improvement in productivity and restructuring of operations."

During the first half of 1998, the imbalanced flow of trade in the Asian region and the fall in selling prices boosted container demand, and sales volume increased considerably. At the same time, raw material costs also dropped by 5.4%, and this enabled the Group to maintain its profit margin. The Group's container manufacturing operations achieved sales of US$61,752,000, representing an increase of 19.1% as compared to last year. Profit before taxation and minority interests was US$1,087,000, 40.8% higher than last year.

Mr. Chang said, "Under the current unfavorable economic conditions, container leasing companies are cautious in placing orders. However, with our increased marketing efforts, well-established networks and reputation in the industry, we are able to secure production orders for the remaining year."

During the period under review, the Group's five production facilities, four in the People's Republic of China (the "PRC") and one in Surabaya, Republic of Indonesia ("Indonesia"), achieved satisfactory performance, and were able to maintain overall profitability.

The Group's dry freight container manufacturing factory, P.T. Java Pacific Container Factory ("Java Pacific"), located in Surabaya, Indonesia, was not affected by the recent social and political unrest in the region. The factory remained operational throughout this period with minimal disruptions. The economic crisis has also lowered production costs in the South East Asian countries and increased exports in the region. Nevertheless, due to the changing social and political conditions in Indonesia, Java Pacific proceeded cautiously with its expansion plan and has maintained a production capacity at an average of 1,400 twenty-foot equivalent units ("TEUs") per month as compared to its plan of 2,000 TEUs.

Since the Group took over management of its newest joint-venture, Xiamen Pacific Container Manufacturing Co., Ltd. ("Xiamen Pacific") in January 1998, Xiamen Pacific managed to turnaround from a loss position and attained a profit of US$111,000 in the first half of 1998. This improvement was mainly attributable to the Group's good management, product quality, well-established marketing network and close working relationship with and assistance from its PRC joint venture partner.

During the first half of 1998, the Group's container depot and terminal operations attained sales of US$8,704,000, as compared to last year's US$9,831,000, and registered a small loss before taxation and minority interests of US$21,000 against a profit of US$695,000 last year. Unfavorable results were mainly from the Hong Kong depot operations.

The imbalanced flow of trade affected the Group's empty container storage business in Hong Kong since many empty containers were repositioned to the PRC and other South East Asian countries. As a result, the Group's Hong Kong depots registered sales of US$4,452,000, reduced by 19% from the first half of 1997 and attained a loss before taxation and minority interests of US$467,000.

Mr. Chung commented, "Although the Hong Kong depot operations remained at a loss position, as part of the Group's strategy in offering customers with total logistic services, the Group will maintain such operations. We will, however, strive our best to minimize losses through stringent cost control and reduction of overheads."

Business of the Group's PRC terminals, on the other hand, was relatively stable. Sales and profit before taxation and minority interests for the period under review were registered at US$4,251,000 (1997: US$4,335,000) and US$446,000 (1997: US$487,000) respectively.

After years of effort by the management, the mid-stream operation achieved profit in the first half of 1998. The restructuring, which took place in November 1997 proved to be effective and has successfully lowered the total operating costs by more than 70%. It managed to generate a profit before taxation and minority interests of US$274,000 against a loss of US$720,000 in the same period of 1997.

Mr. Chang concluded, "Under the current market conditions, the Group will cautiously monitor the business environment and examine each investment plan individually, so as to safeguard the interests of our shareholders. We will continue to improve our production efficiency, and quality of services and products so as to maintain our market competitiveness and profitability. We are fully confident that once the business environment has improved, we shall be in a well position to provide better returns to our shareholders."

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