The directors ("Directors") of Wing Shan International Limited ("the Company") (together with its subsidiaries known as "the Group") would like to announce that the unaudited consolidated interim results of the Group for the six months ended 30 June 2000 together with comparative figures for the previous corresponding period are as follows:

                                                      Six months ended
                                                           30 June
                                                       2000          1999
                                       Notes        HK$'000       HK$'000
Turnover                                            362,361       341,083
Cost of sales                                      (320,591)     (216,996)
                                                -----------    ----------
Gross profit                                         41,770       124,087
Other revenue                                         2,292         3,153
Administrative expenses                              (6,430)      (12,417)
Other operating expenses                            (15,811)      (15,849)
                                                -----------    ----------
Profit from operations                               21,821        98,974
Finance cost                                        (35,696)      (40,305)
                                                -----------    ----------
(Loss)/Profit before taxation                       (13,875)       58,669
Taxation                                  1            (357)       (6,423)
                                                -----------    ----------
(Loss)/Profit after taxation                        (14,232)       52,246
Minority interests                                     (882)      (14,509)
                                                -----------    ----------
(Loss)/Profit attributable to
   shareholders                                     (15,114)       37,737
                                                ===========    ==========
Interim dividend                                          -        12,435
                                                ===========    ==========
Basic (loss)/earnings
   per share                              2     (1.8) cents     4.6 cents
                                                ===========    ==========

Notes:

1. Taxation

No provision has been made for Hong Kong profits tax as the Group sustained losses for taxation purposes during the period. The tax charge represents provision for the People's Republic of China income tax at 7.5% on the estimated assessable profits of (Foshan Shakou Power Plant Co. Ltd.) ("Shakou JV") for the period.

2. Basic (loss)/earnings per share

The calculation of loss per share is based on the loss attributable to shareholders of HK$15,114,000 (1999: profit of HK$37,737,000) and on the weighted average number of 829,018,244 (1999: 829,018,244) shares in issue during the period.

BUSINESS RESULTS

The Group's turnover increased by 6.2% to HK$362.4 million (1999: HK$341.1 million). However, the Group's cost of sales increased markedly by 47.7% to HK$320.6 million (1999: HK$217.0 million). Profit from operations therefore plummeted by 78.0% to HK$21.8 million (1999: HK$99.0 million). Despite a 11.4% fall in finance cost, the Group recorded a loss attributable to shareholders of HK$15.1 million (1999: profit of HK$37.7 million). The Company's loss per share for the period was 1.8 cents (1999: earnings per share of 4.6 cents).

INTERIM DIVIDEND

In light of the increased working capital requirement due to the prevailing high fuel price and the Group's net loss for the period, the Directors do not recommend an interim dividend (1999: 1.5 cents per share).

BUSINESS REVIEW

• On the back of Guangdong Province's satisfactory economic growth and electric power industry reforms, Foshan City experienced strong electricity demand growth. Electricity demand was further stimulated as this year Guangdong Province experienced an unexpected severe hot and dry summer season.

• Electric power supply was reduced as the provincial government has closed down a large number of less efficient, polluting and small-scaled power plants during the past years. In addition, high fuel oil price has forced many oil-fired power plants in the province to suspend production to avoid incurring operating loss.

• Shakou JV's electricity sales only increased by 0.9% to 715.9 million kilowatt-hours ("kwh") (1999: 709.3 million kwh), mainly attributable to production interruption caused by a routine major overhaul undertaken by Shakou JV on its power generating facilities.

• Out of Shakou JV's total electricity sales, approximately 121.8 million kwh (1999: 10.0 million kwh) were purchased from (Foshan Shiwan Power Plant Co. Ltd.) while approximately 594.1 million kwh (1999: 699.3 million kwh) was Shakou JV's self-generation. Shakou JV's average plant utilization rate for the period was approximately 45% (1999: 53%).

• Shakou JV recorded significant earnings decline, mainly due to the increased fuel oil cost as a result of rising international oil price. Shakou JV's weighted average cost of heavy oil consumed for the period therefore significantly increased by 62.6% to Renminbi 1,768 (1999: Renminbi 1,087) (exclusive of value-added tax) per tonne.

• Being a dominant electric power producer in Foshan City, Shakou JV has striven to increase its electricity output and provide reliable and uninterrupted electricity supply to the locality during period of electric power short supply, though high fuel oil cost has significantly reduced its operating profit margins.

• In July this year, the electric power bureau of Foshan City reimbursed Shakou JV a lump sum payment of approximately HK$18.1 million, being additional fuel cost surcharge to partially compensate for the increased fuel cost incurred by Shakou JV arising from the provision of additional electricity supply during period of power shortage in the first half of the year. This amount has already been accounted for in the Company's interim results.

OUTLOOK

• In the short-term, high fuel price is expected to exert continuous pressure on the Group's earnings. The Directors have been closely monitoring the fuel oil price and will continue to adopt strategic measures to minimize its effect on the Group's business performance.

• In the long-term, the Directors are optimistic of the sustained economic growth of Guangdong Province and Foshan City. The Directors are exploring possibilities in respect of making technological improvement on the Group's power plant facilities in order to reduce its reliance on fuel oil.

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

During the period, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities.

By Order of the Board
YIP Siu Chun
Chairman

Hong Kong, 6 September 2000

Website: http://www.irasia.com/listco/hk/wingshan

© Copyright 1996-2008 irasia.com Ltd. All rights reserved.

DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall irasia.com Ltd be liable for damages resulting from the use of the information provided on this website. TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website.