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(Hong Kong, 10th August, 1999) -- Singamas Container Holdings Limited ("Singamas"), one of the world's leading container manufacturers and container depot/ terminal and mid-stream operators, today announced its interim results for the six months ended 30th June, 1999.

During the period under review, consolidated turnover of the Group was US$58,995,000, a 21.6% decrease from the same period last year, while consolidated profit after taxation and minority interests was US$618,000, a 22.6% increase over the same period in 1998. Earnings per share were US 0.14 cent as compared to US 0.11 cent last year.

Mr. Chang Yun Chung, Chairman of Singamas said, "We are proud to report our continuous profit growth despite the current difficult business environment. This encouraging result is attributable to our solid foundations and successful operating strategies, in addition to the satisfactory performance of our container depot and mid-stream operations."

The slow-down of container demand in the Asian region continued from the second half of 1998 into the first half of 1999. Empty containers continued to build up at the ports of U.S. and Europe due to the imbalance of trade and container movements between Asia and the U.S./Europe markets. The high cost in repositioning these containers back to Asia also deterred container leasing companies from placing orders. Despite these difficulties, the Group attained an aggregate container output of 41,593 twenty-foot equivalent units ("TEUs") and a sales volume of 38,155 TEUs in the first six months of 1999, representing an increase of 12.5% and 7.0% respectively over the same period last year.

Although selling price for dry freight containers stabilized recently, costs of raw materials, particularly the price of plywood, surged in the first half of 1999. The cost of steel also started to increase in the second quarter of 1999. However, the Group was able to minimize the effects from the rising material costs by its on-going control over production efficiency and costs, and maintaining its overall profitability to a certain degree. In order to achieve economies of scale and regain its market share, the Group also expanded the scale of its dry freight and collapsible flatrack container production and attained production of 40,222 TEUs, representing an increase of 12.5% over the same period in 1998.

During the period under review, the Group's container depot and terminal operations achieved turnover of US$10,297,000, representing an increase of 18.3% compared to the same period last year, and managed to turnaround from a loss before taxation of US$21,000 in 1998 to a profit of US$698,000.

"This encouraging result was primarily due to the recovery by our Hong Kong depot operations. The dramatic slow-down in cargo throughput and higher idle leased container inventory for the first half of 1999, and the successful restructuring and cost reduction programs that were implemented in the second half of 1998 attributable to the good results of our Hong Kong depot operations," Mr. Chung said.

Performance of the Group's five container terminals in the PRC was stable, and they collectively attained a turnover of US$5,639,000, an increase of 6.0% over 1998.

Meanwhile, the mid-stream operation continued to perform well with turnover of US$3,774,000. The continued high demand for empty containers in the PRC and South East Asian countries benefited the container repositioning business division of the mid-stream operation. This factor, coupled with the Group's ongoing cost control measures and the effective restructuring that took place in November 1997, accounted for the good results.

The Group entered into an agreement with Shunde Shun An Da Container Manufacturing Co., Ltd. ("Shun An Da") on 16th July, 1999 to jointly operate and manage the factory with effect from 1st September, 1999. Shun An Da, with an annual capacity of 120,000 TEUs, is engaged in the production of dry freight containers, as well as 45-foot and 48-foot specialized containers.

Mr. Chung commented, "This agreement enables the Group to establish a wider manufacturing network from central to southern part of the PRC and capitalize on the rising container demand, particularly in the Southern PRC. With Shun An Da's advanced production facilities, skillful labor force and strategic location, together with our established customer base and manufacturing network, we believe that this agreement will be beneficial to both parties and it will strengthen the Group's competitiveness and business growth. Barring any unforeseen circumstances, we are confident of achieving better results in the second half of the year."

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