PSE Circular for Brokers No. 1906-98

August 17, 1998 PSE CIRCULAR FOR BROKERS NO. 1906-98 PRESS RELEASE PROFITS RISE AT KEPPEL PHILIPPINES GROUP The Keppel Philippines Group achieved an increase attributable profit of 12% to P54 million for the first half of 1998. Although revenue was lower by 16% due mainly to a decline in shipbuilding and repairs of domestic vessels, contributions from associates were up 50% to P25.4 million. With the slowdown in the Philippine economy, Kepphil Shipyard and Cebu Shipyard experienced a decline in the repair of local vessels. However, with the cheaper Peso, demand for the repair of foreign vessels improved at all the Group's shipyards. Prospects for the second half are better, with an expected increase in demand for the repair of foreign vessels and the operation of the new 40,000 dwt dry dock at Kepphil Shipyard. Contributions from other associates of the Group are expected to be maintained. The restructuring of the Keppel Philippines Group's shipyard and property-related businesses has been approved by the stockholders and is now being processed by the Securities & Exchange Commission and other relevant authorities. This is expected to enhance the market position of the listed companies in the Group and improve shareholders value. cdll For further information, please contact Kevin Chee at telephone number 892-1816 . KEPPEL PHILIPPINES HOLDINGS, INC. INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 1998 (Unaudited) COMPANY GROUP 1998 1997 1998 1997 P'000 P'000 P'000 P'000 Revenue 349,958 415,093 Operating Profit (2,013) (3,843) 73,878 76,562 Investment and Net Interest Income 3,029 5,220 7,811 11,307 Share of Results of Associates 53,127 46,946 25,370 16,939 Profit Before Tax 54,143 48,323 107,059 104,808 Taxation (141) (25,251) (26,711) Minority Interests (27,806) (29,774) Profit Attributable to Shareholders 54,002 48,323 54,002 48,323 ====== ====== ====== ======