GP Batteries International Limited

21 June 2000, Singapore - Mainboard-listed GP Batteries International Limited ("GP Batteries"), is pleased to announce today its unaudited results for the year ended 31 March 2000.

Review of Results

The Group's turnover for the year ended 31 March 2000 was S$531.3 million, an increase of 14.4% over the previous year. The consolidated net profit after taxation and minority interests but before extraordinary items was S$22.1 million, representing a decrease of 15.4% compared with 1999. Basic earnings per share of S$0.80, based on the weighted average of 103,461,168 (1999: 103,456,987) shares in issue during the year amounted to 21.38 Singapore Cents compared with 25.27 Singapore Cents for 1999.

Business Review

Demand for the Group's products continues to be strong. During the financial year, sales to the U.S. rose by over 30% brought about by strong demand from private label customers. Operating profit after tax attributable to members of the company however, saw a decline due principally to a difficult first half year.

However, the business environment in the second half year improved considerably as the regional economies recovered. Compared to the first half year, Group turnover increased 7.4%. Operating profit after tax before deducting minority interests in second half year grew 51% due to continuing efforts by the Group to focus on higher value products which yielded better margins. Cost-cutting measures including the relocation of operations from Hong Kong to more cost-competitive locations in the PRC further improved margins.

The exit of some players from the rechargeable sector as well as the buoyant cellular phone market created strong demand in the rechargeable battery sector. The Group has successfully expanded production capacity of nickel metal hydride batteries to meet the increased demand. Furthermore, production of alkaline 9-volt batteries has also been boosted substantially in Malaysia due to the increase in worldwide demand.

In May 2000, the Group's 75.1% owned subsidiary making lithium-ion batteries in Taiwan, Gold Peak Industries (Taiwan) Limited placed 9 million and 1.4 million new shares of NT$10 each at NT$24 each respectively to Meiloon Industry Company Limited and China Development Industrial Bank. Total proceeds amounted to NT$250.0 million (S$14.1 million). At the placement price of NT$24 per share, our Taiwan subsidiary will have a market capitalization of about NT$4,887 million (S$275.6 million). The Group's 75.1% shareholding will be worth about NT$3,673 million (S$207.2 million) as compared to its book carrying cost of NT$1,488 million (S$95.1 million) as at 31 March 2000. This represented a premium of 146.8% or NT$2,185 million (117.9% or S$112.1 million). The plant has started pilot production and it is funded with sufficient initial working capital. Preparation for mass production is well underway.

Our market share and brand name awareness in China supported by our strong distribution network continued to improve. The successful introduction of our GP PowerBank has enhanced our position in consumer rechargeable battery markets worldwide.

In November 1995, the company issued US$35 million unsecured bonds which will be due for redemption in November 2000. The company has received an underwritten proposal for US$50 million to re-finance these bonds and to serve as additional working capital.

In the opinion of the Directors, no items, transaction or event of a material and unusual nature has arisen between the date up to which this report refers and the date on which this report is issued which would substantially affect the results of the Company or the Group.

Prospects

The overall business outlook is optimistic as Asia emerged from the economic downtown. To capitalize on the demand for rechargeable batteries, the Group will continue to develop and expand production capacity for related batteries. Distribution of GP branded product in Asia especially China will be strengthened. The Group will continue to develop EV batteries which is receiving encouraging response worldwide, especially in scooter application. The lithium-ion battery production in Taiwan is expected to start commercial production in the second half of year 2000, thereby strengthening the Group's market position in the global rechargeable battery industry. The Group's margins are expected to improve.

Barring unforeseen circumstances, the Directors expect the Group to remain profitable in the current fiscal year.

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