GP Batteries International Limited

21 December 1999, Singapore - Mainboard-listed GP Batteries International Limited ("GP Batteries"), is pleased to announce today its unaudited results for the six months ended 30 September 1999.

Review of Results

The Group's turnover for the 6 months ended 30 September 1999 rose by 9.2% to S$256.2 million and the consolidated net profit after taxation and minority interests decreased by 49.3% to S$8.7 million when compared to the previous corresponding period. Earnings per share for the period based on the weighted average of 103,461,168 (1998: 103,452,829) shares in issue amounted to 8.44 Singapore cents, compared with 16.64 Singapore cents for the previous corresponding period.

Business Review

The improvement in Group turnover was due mainly to the Group's success in increasing its market share in major markets despite strong competition. In particular, sales to the US and European markets increased by 32.6% and 13% respectively. An abnormal rise in material costs especially nickel, volatility in foreign exchange rates especially the Japanese Yen and high interest rates in the Group's operating currencies had a significant impact on net profit.

1999 will be remembered as the year of natural disasters. One of the Group's major factories in China was severely flooded during a rainstorm. However, the asset losses were mostly covered by insurance. The earthquake in Taiwan caused only minimal damage to the Group's factory, but the resultant power supply interruption has caused some delay in the trial production of lithium-ion batteries.

To capitalise on the economic recovery in Thailand, a new sales office has been set up and was operational in October 1999. The "GP" brand was awarded the "Hong Kong Top Ten Brandnames" by the Chinese Manufacturers' Association of Hong Kong in December 1999. This reaffirms the "GP" brand's leading position in the region.

The electric vehicle batteries for electric cars and scooters have continued to receive encouraging response. The Group is actively co-operating with manufacturers in Italy and Taiwan, and has increased the size of its pilot line to cope with demand.

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 of the Group.

Prospects

The Group is cautiously optimistic about the battery market for the remaining period of the year. With the economic recovery, the general business outlook is now more positive. The rechargeable battery market is expected to improve gradually as the market consolidates with the exit of some players. OEM demand for the Group's batteries is expected to remain strong. As the selling price of batteries has gradually stabilised, there would be better opportunities to improve margins. The Group's established position in the nickel metal hydride and lithium-ion batteries would enable it to participate in the highest growth segment of the global battery market. The Group will also continue to rationalise its operations to further reduce costs.

The Group will continue to expand and strengthen its distribution in Asia and to enhance the "GP" brand, preparing itself for the recovery of the Asian economy.

Barring unforeseen circumstances, the Directors expect the Group's second half year performance to be satisfactory relative to those achieved in the first half year.

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