Jardine Strategic Holdings Limited

To: Business Editor

25th August 1999 For immediate release

CYCLE & CARRIAGE LIMITED
INTERIM REPORT 1999 HIGHLIGHTS

The following press release was issued today by the Company's 24%-owned associate, Cycle & Carriage.

For further information please contact:

Forrest International Limited David Dodwell Sue Gourlay

Tel:

(852) 2522 6475 (office) (852) 2501 7902 (direct) (852) 2501 7936 (direct)

Full text of this and other Group announcements can be accessed through the Internet at "http://www.irasia.com/listco/sg/jshl".

RESULTS

The Board of Directors announced today an unaudited consolidated profit attributable to shareholders of S$57.6 million for the six months ended 30 June 1999. This result was arrived at after an exceptional item pertaining to the writeback of provision for foreseeable losses on development properties of S$3.3 million (1998: provision of S$67.7 million), and an extraordinary profit of S$1.6 million arising from the sale of shares in a subsidiary. Excluding the exceptional item, earnings were S$52.7 million, up 13% on 1998.

The earnings per share was 22.5 cts, excluding the exceptional and extraordinary profits compared with 20.0 cts for the previous year.

The Group's net asset value per share increased by 3% to S$5.12 during the first half, due primarily to the increase in profit attributable to shareholders.

DIVIDEND

An interim dividend of 5 cts or 5% (1998: 4 cts or 4%) per share and a special dividend of 10 cts or 10% per share in celebration of the Group's centenary, less income tax at 26% have been declared for the six months to 30 June 1999. The dividend will be payable in cash on 23 September 1999 to shareholders whose registrable transfers are received by the share registrar, Barbinder & Co Pte Ltd, 9 Penang Road, #13-21 Park Mall, Singapore 238459 by 5.00 p.m. on 13 September 1999.

CORPORATE EVENTS

April 1999

Cycle & Carriage Limited acquired an additional 20% stake in UMF for S$14.5 million, thus increasing its interest to 40%. The purchase of the additional stake is in line with the Group's plans to increase its participation in automotive financing in Singapore.

Cycle & Carriage Limited increased its stake in Astre Investments Pte Ltd by 6.3% to 81.4% for S$13.1 million and acquired another 18.6% interest for S$25.4 million in July 1999, making it a wholly owned subsidiary.

May 1999

Cycle & Carriage (Canterbury) Limited completed the purchase of three Nissan dealerships in New Zealand for NZ$9.0 million.

June 1999

Cycle & Carriage Limited subscribed for 450,000 ordinary shares of S$1 each at par for cash, representing a 30% interest, in a motor dealership, Cycle & Carriage.Fulco Motor Dealer Pte Ltd in line with the Group's plans to strengthen its retail network in Singapore.

Cycle & Carriage Limited sold its 70% owned subsidiary in New Zealand, Sri Temasek Limited for S$6.3 million, which resulted in an extraordinary gain of S$1.6 million.

OPERATIONAL REVIEW

Following the difficulties of 1998, the economies of the South East Asian countries have begun to recover, earlier than had been anticipated. This, together with improvements to operational efficiencies, has resulted in an improvement on the disappointing results of 1998.

Motor

Earnings from the motor vehicle operations were S$24.6 million, 97% higher than in the first half of 1998, with profit recoveries in all of the Group's major markets other than Singapore, which was highly competitive.

The Singapore passenger car market increased by 28% to 16,767 units in the first half, compared with the previous year, due to the increased number of Certificates of Entitlement ("COE") that were made available during the period. However, competition among the major motor distributors remained intense in all segments, with a number of competitors releasing new models. Cycle & Carriage saw its share of the Singapore passenger car market maintained at 22% for the 3 marques that it distributes.

Earnings for the Singapore motor operations at S$16.3 million were lower due to unfavourable exchange rates and the need to subsidise high COE prices.

Despite the successful launch of the new S-class, the Mercedes-Benz market share declined to 7% with sales of 1,085 units as registrations of the new S-class only commenced in March. Mercedes-Benz commercial vehicles, however, reflected a strong recovery with unit sales increasing by 76% due to the success of the Vito van. Mitsubishi passenger car sales were strong and increased by 54% to 2,010 vehicles, while Mitsubishi commercial vehicle sales were flat. Proton improved on its 1998 position by 46% to 501 units.

The Malaysian car market recovered from the poor 1998 levels and overall car sales were more than double those of the first half of 1998 and non-national car sales were up 103%. As a result, Cycle & Carriage Bintang Berhad ("CCB") reported a recovery in earnings to RM37.3 million. Excluding its interest in associates, CCL Group Properties (40%) and Cycle & Carriage (Malaysia) (30%), CCB made a profit of RM16.4 million.

The recovery in demand resulted in an increase in passenger car sales by CCB to 1,481 units. This level of sales has largely eliminated the problem of excess passenger car stocks although commercial vehicle stocks still remain at a high level as this sector of the market has not recovered to the same extent as the passenger car sector. Cycle & Carriage (Malaysia) Sdn Bhd also benefited from the stronger demand to improve its earnings. Together, the Group's Malaysian motor interests contributed S$5.3 million to Group earnings.

The Australian passenger car market declined marginally in the first half of 1999 to 278,000 units. The Astre Automotive Group in which Cycle & Carriage has increased its interest to 100% since the half year, achieved sales of 27,600 units of Hyundai, giving it a market share of 10%. Audi sales at 1,400 units were disappointing, but progress is being made in establishing the dealer network. The strengthening of the Australian dollar and management actions taken, has resulted in a profit of S$4.6 million for the first half of 1999, a dramatic turnaround from the significant losses suffered in 1998. Although the Group's New Zealand operations suffered a small loss for the first half of the year, the Group made an extraordinary gain of S$1.6 million from the sale of its Mazda dealerships.

Property

Property earnings for the first 6 months, excluding the exceptional item, were S$26.6 million, a decrease of 23%, due to the substantial completion of a number of developments in 1998. However, after taking account of a writeback of S$3.3 million of the exceptional charge of S$67.7 million taken in 1998, the contribution from the Group's property interests was S$29.9 million against the loss of S$33.2 million in the previous year. The writeback was due to higher prices achieved for the remaining units at MCL Land's Seletar Springs and The Springbloom.

Despite the continuing weak state of the office property market in Singapore and Malaysia, the Group managed to enjoy healthy occupancy and rental rates for nearly all its investment properties during the first half of 1999. In May 1999, MCL Land purchased a corner terrace factory at Eunos Tech Park which has been leased. Coupled with cost savings, the Group managed to register a marginal increase of 1% in income from investment properties to S$11.3 million for the period up to 30 June 1999.

The Directors have reviewed the values of the Group's investment properties as at 30 June 1999. This internal valuation revealed no further decline in the values of the Group's office properties while there have been some indications of appreciation in the Group's residential properties.

In May 1999, MCL Land, together with Pidemco Land Limited, launched the Ubi Tech Park industrial project. The transacted prices were within the expected range and accordingly, no further provision for foreseeable losses for this project is envisaged at this stage.

MCL Land's development property at The Sunnydale met with strong responses from buyers. Options for all 70 units were granted, of which 68 have been exercised. MCL Land's other properties under development include Balmoral Crescent and The Grange. The launch of these developments will be dependent upon further improvement in market conditions. The development of Robertson Quay, which is an investment property, has been brought forward due to the improvement in the property market.

Although the values in the vicinities of the three above-mentioned properties have improved since the end of 1998, the Directors are of the view that it would be prudent to review the carrying values of Balmoral Crescent and The Grange closer to their launch dates and that of Robertson Quay closer to its completion date targeted for end 2001.

In June 1999, MCL Land entered into an agreement to purchase an agricultural site of approximately 116,900 sq ft at Transit Road with the intention of applying for conversion to residential use.

In August 1999, MCL Land completed its purchase of an URA 99-year leasehold land parcel with a site area of approximately 61,000 sq ft at Sims Avenue. It intends to develop the site and plans to launch the project during the fourth quarter of 1999.

Other interests

The Group made a net profit of S$1.5 million from its other interests. This represents the income from Cycle & Carriage Limited's cash reserves and the net earnings from the Group's other associated companies, offset by central overheads.

Prospects

The recovery experienced in the Group's major markets in the first half of the year is expected to be sustained, albeit at a slower pace.

In Singapore, the passenger car market is expected to continue to grow due to the increased number of COEs released but margins will remain under pressure due to competition. The Malaysian market is also expected to continue its strong performance and in Australia, the benefits of the first half are expected to be sustained.

The recovery in the Singapore residential property market is expected to have a positive impact on MCL Land's current development projects but, following completion of a number of major projects in 1998, trading profit will be lower this year. If the positive trend continues, the Group expects further writebacks on its development properties, as these are sold in the coming years. On the other hand, the Group's office properties in Singapore and Malaysia continue to be affected by the slowdown in the office market caused by the economic downturn and excess supply from new completions. Although rentals have stabilised in the last six months, further improvement is contingent on a sustainable recovery in the economies of both countries.

Overall, the directors are confident that the Group will show an improvement over its performance in 1998.

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