GP Batteries International Limited

25 June 1999, Singapore - Mainboard-listed GP Batteries International Limited ("GP Batteries"), is pleased to announce today its unaudited consolidated results for the year ended 31 March 1999.

Review of Results

The Group's turnover for the year ended 31 March 1999 amounted to S$464.5 million, an increase of 5.4% over the previous year. The consolidated net profit after taxation and minority interests but before extraordinary items amounted to S$26.2 million, representing a decrease of 8.2% compared with 1998. Basic earnings per share of S$0.80, based on the weighted average of 103,456,987 (1998: 92,718,957) shares in issue during the year amounted to 25.29 cents, compared with 30.75 cents for 1998.

Business Review

The last fiscal year was a difficult period for the Group. Overall demand for battery products in the global market slackend unexpectedly in the second half. Despite the highly competitive market conditions, especially in rechargeable batteries, the Group managed to maintain its market share, though at the expense of squeezed operating margins. The sudden drastic appreciation of the Japanese Yen during the second half of the year created additional pressure on our raw material costs. Although these effects are mostly short term, they demanded a lot of management efforts and adjustments to meet these challenges. To further improve our cost structure, our factories in Hong Kong and Taiwan had been streamlined, and major restructuring was undertaken during the period.

Our Alkaline cylindrical batteries factory with STC of Korea in China reached full capacity during the year. With the rising popularity of new hand-held electronic games, our button cell factory in Shanghai also operated at full capacity.

In October 1998, the Group entered into an agreement with China Development Corporation ("CDC") of Taiwan whereby CDC invested approximately US$10.6 million, equivalent to a 16% interest in the Group's Lithium-ion operations. The relocation of the manufacturing operations from the U.S. to Taiwan is continuing and trial production commenced in second quarter of the current fiscal year, enhancing the Group's market position in the global rechargeable battery industry.

During the year, the Group continued with the development of electric vehicle batteries with encouraging results. In May 1999, an electric car powered by GP NiMH batteries captured first place overall in the 11th Annual Northeast Sustainable Energy Association's American Tour de Sol Electric Vehicle Championship in the U.S. In the same race, an electric scooter powered by GP NiMH batteries also captured the record for the longest ride on one charge.

Prospects

There are signs of recovery in the Asian economies and demand for battery products worldwide is gradually picking up. However, price competition is expected to remain keen. Demand from the battery companies under private labels is expected to remain strong. The exit of competitors in the rechargeable market provides the Group a good opportunity to capture additional market share. The development of the Lithium-ion operation in Taiwan is expected to progress at a steady pace and will further broaden the Group's product range and customer base. Continual efforts will also be put into the development of the EV batteries in preparation for mass production in the future. The Group will continue to expand its distribution in Asia to capitalize on the recovery in these markets.

Barring unforeseen circumstances, the Directors expect the Group to achieve profitable results in the current financial year.

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