Cebu Shipyard Maintains Operating Margin

August 17, 1998 PSE CIRCULAR FOR BROKERS NO. 1908-98 PRESS RELEASE CEBU SHIPYARD MAINTAINS OPERATING MARGIN Cebu Shipyard's performance in the first half of 1998 was affected by the regional economic crisis and the El Nio phenomenon. Inter-island trade was reduced significantly, and local shipowners had to take drastic measures to remain viable. The Company consequently registered a drop of 21% in production revenue to P132 million, while attributable profit fell 18% to P23 million. The value of foreign repairs increased two and a half times to P28 million due in part to the cheaper Peso. Operating margin was maintained at about 19%. The yard completed the construction of a new machine shop during the first half of the year. This is by far the largest and most comprehensive such facility in southern Philippines and will contribute to the enhancement of operational efficiency of the shipyard. LLjur Stemming for the dry dock and slipways is expected to be better in the months ahead. Barring any unforeseen circumstances, the Company expects to improve its performance in the second half of the year. For further information please contact Alex Cheng at telephone number (32) 3400081 . CEBU SHIPYARD & ENGINEERING WORKS, INC. INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 1998 (Unaudited) 1998 1997 P'000 P'000 Revenue 131,513 165,883 Operating Profit 25,494 32,799 Investment and Interest Income 4,544 3,885 Share of Results of Associates 1,811 2,996 Profit Before Tax 31,849 39,680 Taxation (8,725) (11,510) Profit Attributable to Shareholders 23,124 28,170 ====== ======