Profit Down 17% at Keppel Philippines Marine

March 19, 1999 PSE CIRCULAR FOR BROKERS NO. 530-99 PROFIT DOWN 17% AT KEPPEL PHILIPPINES MARINE Keppel Philippines Marine (formerly Kepphil Shipyard) recorded lower revenue of P403 million in 1998. Operating profit declined by 26% to P63 million. This was offset by contributions from associates, which improved by 40% to P14 million due mainly to the better performance of Subic Shipyard. As a result, pre-tax profit was only 21% lower at P78 million. Attributable profit was down 17% to P55 million. The lower revenue was due to a sharp decline in newbuilding activities, as shipowners shelved investments in new vessels during the present economic downturn. The completion of the new 40,000 dwt drydock in Batangas in November 1998 has enhanced the shipyard's capability to service medium-sized foreign and domestic vessel. Demand from foreign vessels has so far been encouraging with the new dock posting heavily occupancy rates. With the restructuring of the Keppel Philippines Group, the shipyard operations in Cebu were transferred to Keppel Cebu Shipyard, which became a wholly-owned subsidiary of Keppel Philippines Marine (KPM) at the end of 1998. The earnings of KPM are expected to improve with this consolidation of the shiprepair, shipbuilding and marine-related operations in Batangas and Cebu. Barring any unforeseen circumstances, the Company is expected to perform better in the current year For further information, please contact Kevin Chee at telephone number 892-1816. KEPPEL PHILIPPINES MARINE INC . INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998 1998 1997 P'000 P'000 Revenue 403,166 482,387 ______ _______ Operating Profit 63,054 84,737 Net Interest Income 1,051 4,167 Share of Results of Associates 14,332 19,265 ______ _______ Profit Before Tax 78,437 99,109 Taxation (23,362) (32,501) _______ _______ Profit Attributable to Shareholders 55,075 66,608 ======= ======