Keppel Monte Bank Provision Affect Keppel Philippines Group Results

March 19, 1999 PSE CIRCULAR FOR BROKERS NO. 529-99 Keppel Monte Bank Provision Affect Keppel Philippines Group Results The Keppel Philippines Group recorded lower revenue of P688 million in 1998. Group operating profit declined by 14% to P123 million for the year. Provision made by Keppel Monte Bank for non-performing loans affected the contribution from associates, which reported a loss of P31 million. As a result, pre-tax profit declined to P106 million as compared to P207 million in 1997. Domestic shipping was affected by the slowdown in the Philippine economy. This resulted in a decline in shiprepair and shipbuilding activities. With the completion of the new 40,000 dwt drydock of Keppel Philippines Marine, the Group will able to focus more on the repair of international vessels. In banking Keppel Monte Bank's provision for non-performing loans are part of the rehabilitation plan after the Keppel Group took over the bank in 1997. The bank plans to raise its capital in preparation for conversion into a commercial bank. LLpr In property development, the basement car park at Benguet Center commenced operation in October 1998. Plans are underway to construct a 5-storey retail podium. The restructuring of the Keppel Philippines Group's shipyard and property-related business has been completed at the end of 1998, with the shipyard operation in Batangas and Cebu consolidated under Keppel Philippines Marine and the property-related business under Keppel Philippines Properties. The Group will continue its effort to rationalize its core activities in order to enhance its market position and improve shareholder value. Barring unforeseen circumstances, the Group expects to improve its performance in 1999. For further information, please contact Kevin Chee at telephone number 892-1816. KEPPEL PHILIPPINES HOLDINGS, INC. INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998 COMPANY GROUP 1998 1997 1998 1997 P'000 P'000 P'000 P'000 Revenue - - 687,935 789,592 Operating Profit 4,119 (3,680) 123,433 142,941 Investment and Net Interest Income 6,277 6,924 13,666 17,343 Share of Results of Associates 13,721 93,356 (31,271) 46,433 Profit Before Tax 24,117 96,600 105,828 206,717 Taxation (1,419) (536) (37,725) (48,449) Profit Before 22,698 96,064 68,103 158,268 Minority Interest Minority Interest - - (45,405) (62,204) Attributable Profit 22,698 96,064 22,698 96,064 ====== ====== ====== ======