HG Metal's Interim Profit Before Tax Leaps 70.6%

SINGAPORE, 18 July 2002 - SESDAQ listed HG Metal Manufacturing Limited, Singapore's only steel stockist with manufacturing capability, announced today its maiden set of interim results.

HG Metal reported a group turnover of $41.18 million for the six months ended 30 April 2002, a marginal increase of 0.12% from $41.13 million recorded during the same period last year. HG Metal has been able to maintain its sales despite the difficult operating environment following the event of September 11 attack. HG Metal had also adopted a cautious approach towards expanding and growing new businesses.

Group PBT jumped 70.6% to $1.46 million, from S$0.86 million recorded for the same period last year. The increase in PBT was due to an increase in gross profit margin as a result of a sharp increase in steel price since the beginning of the year. Correspondingly, HG Metal's PBT margin improved from 2.1% to 3.6%.
 
HG Metal also reported a rise in net earnings per share from 1.01 cents to 1.38 cents.

Commenting on HG Metal's results, Mr Wee Piew, CEO of HG Metal, said, "We are pleased to have achieved solid results for our new public shareholders following our successful listing on the SESDAQ in March this year. Despite the uncertain global environment, we have managed to perform very well."
 
Mr Tan Chan Too, Chairman of HG Metal, added, "We have seen an increase in the steel price since the beginning of the year as supply constracted. With the expected recovery of the economy, steel prices is likely to at least maintain at current prices until the end of the year. This will have a positive impact on HG Metal. We remain optimistic on the performance of our Group and barring any unforeseen circumstances, we expect the Group's performance for FY2002 to be better than FY2001."    
 
Mr Lee Leng Loke, Executive Director, said, "With regards to our expansion plans for our pipes production, we are currently reviewing and negotiating with several pipe line equipment vendors and  expect to  make our decision soon. We intend to install the new manufacturing line by the end of this calendar year and begin production next year. Our return on invested capital should improve as we utilize the same raw materials and upstream processing equipment for the new pipe and tube line. In addition to the stockist business, the HG Group will continue to focus on expanding our manufacturing business, which commands a much better profit margin.
 
 
About HG Metal

Listed on the SESDAQ since 21 March 2002, HG Metal is a premiere steel stockist and manufacturer of steel products. With more than 30 years in the steel business, HG Metal offers more than 2,000 different types of steel products of various dimensions for a wide variety of industrial and engineering applications. With their "one-stop supermarket" strategy, HG Metal is able to satisfy the needs of their customers with one visit to their extensive stockyard and manufacturing facility.

HG Metal has also differentiated itself from its peers in its strategic move to custom manufacture steel products. HG Metal currently manufactures customized flat steel bars used in a wide variety of engineering processes and mild steel lip channels commonly used as roofing support in commercial and industrial buildings. The Directors believe that HG Metal is the only steel stockist in Singapore with such manufacturing capability. This give HG Metal a distinct competitive advantage against their competitors, as they can fulfill their customers' requirements more quickly and completely, especially for specifications that are not readily available in the market. HG Metal intends to expand its product mix to include the manufacturing of steel pipes next year. With its listed status and enlarged custom manufacturing capabilities, HG Metal will advance further up the steel value chain.