Operating Profit Drops 9% at Keppel Philippines Properties

March 19, 1999 PSE CIRCULAR FOR BROKERS NO. 531-99 OPERATING PROFIT DROPS 9% AT KEPPEL PHILIPPINES PROPERTIES Keppel Philippines Properties (formerly Cebu Shipyard & Engineering Works) registered a drop of 9% in operating profit for 1998 to P34 million. Revenue was down 7% to 285 million. At the attributable level, profit was P45 million compared to P52 million in 1997. aisadc The economic crisis in Asia coupled with the effects of the El Nino phenomenon affected the Philippine economy. This was further compounded by the effects of two typhoons during the year, resulting in a significant decrease in agricultural yields. Inter-Island trade was thus severely affected and many vessels were laid up. Shipowners also undertook severe cost-cutting measures to remain viable. As a result, demand for shiprepair services dropped during the year. The Keppel Philippines Group restructuring exercise was completed at the end of the year. Under this exercise, the Company transferred its shipyard operations to Keppel Cebu Shipyard, on 1 October 1998. On 29 December 1998, Keppel Cebu Shipyard was sold to Keppel Philippines Marine, Inc. for a 15% stake in SM-Keppel Land, Inc., in a share-for-share swap. SM Keppel Land is a joint venture between the Keppel Group and the SM Group, and it is presently developing a commercial building in Ortigas, Metro Manila. With property development and investment now as its core activity, the Company will be looking to expanding its investments and activities in this year area. For further information, please contact Alex Cheng at telephone (32) 340081-89. KEPPEL PHILIPPINES PROPERTIES, INC. (formerly Cebu Shipyard & Engineering Works, Inc.) INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 1998 1998 1997 P'000 P'000 Revenue 285,468 307,205 ______ ______ Operating Profit 34,353 37,902 Other Income 13,847 11,103 Interest Income 6,509 6,971 Share of Results of Associates 3,464 10,499 ______ ______ Profit Before Tax 58,173 66,475 Taxation (13,241) (14,378) _______ _______ Profit Attributable to Shareholders 44,932 52,997 ======= =======