KEPPHIL Reports Higher Earnings

August 17, 1998 PSE CIRCULAR FOR BROKERS NO. 1907-98 KEPPHIL REPORTS HIGHER EARNINGS Kepphil Shipyard Inc., a member of the Keppel Philippines Group, turned in higher net earnings for the first half of 1998. Revenue for the first six months of the year at P218 million was 13% lower, due mainly to a decline in shipbuilding and repairs of domestic vessels. Revenue from the repair of foreign vessels improved more than two-fold to P68 million with higher value added jobs. Operating profit improved by 5% to P44 million due to higher margins. cdlex Contributions from associates increased 124% to P7 million, with higher contributions from Subic Shipyard and the power barge operations of Keppel Fels Energy Manila. Consequently, attributable profit grew by 9% to P36 million. With the slowdown in the Philippine economy, demand for the repair of domestic vessels is expected to be sluggish in the second half of the year. However, with the cheaper Peso, higher contributions from foreign vessels is expected for the rest of the year. With the operation of the new 40,000 dwt dry dock scheduled for the fourth quarter of the year, the Company should be in a better position to attract more foreign vessels to the yard. LexLib For further information, please contact Kevin Chee at telephone number 832-1816. KEPPHIL SHIPYARD INCORPORATED INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 1998 (Unaudited) 1998 1997 P'000 P'000 Revenue 218,445 250,251 Operating Profit 44,336 42,252 Net Interest Income 516 2,570 Share of Results of Associates 7,187 3,208 Profit Before Tax 52,039 48,030 Taxation (15,953) (14,975) Profit Attributable to Shareholders 36,068 33,055 ====== ======