Asia Enterprises reports 61% jump in Q2 Net Profit

-Net profit margin expands to 19.2% from 13.2% a year ago

-Steel distributor to continue benefiting from its strong exposure to shipbuildingand marine-related sectors in the second half of 2008

Singapore, 24 July 2008 – Asia Enterprises Holding Limited (“Asia Enterprises” or the “Group”), a leading regional distributor of steel products to industrial end-users, has reported a sterling 61% jump in net profit to $10.4 million on revenue growth of 11% to $53.9 million for the three months ended 30 June 2008(“2Q08”).

Said Mr Lee Choon Bok, Chairman and Managing Director of Asia Enterprises, “The Group’s strong bottomline performance in 2Q08 was driven by an expansion in profit margins, despite competitive conditions in the region’s steel distribution industry and higher inventory replacement costs caused by rising global steel prices. Looking ahead, we expect to see steady demand for steel products from our primary customer segment in the shipbuilding and marine-related sectors.”2Q08

Performance Review

Despite slower conditions in the USA and EU economies, global steel prices have risen sharply over the first six months of 2008, particularly during the second quarter, underpinned by the escalating cost of steel production and robust demand for steel from emerging economies. Asia Enterprises continued to capitalise on its strong exposure to the shipbuilding and marine-related sectors.

In 2Q08, sales to customers in this segment rose 30% to $37.0 million and contributed the largest share of 69% to Group revenue. Sales to other stockists/traders as well as the construction, engineering/fabrication, manufacturing, and precision metal stamping sectors accounted for the remaining 31%.

The Group registered strong sales growth of 75% in the Indonesian market, driven by higher orders from customers in shipbuilding and marine-related sectors. For 2Q08, sales to Indonesia, Singapore and Malaysia accounted for 58%, 32%, and 8% respectively of the Group’s revenue, with the remaining 2% from other Asia Pacific markets.

While replacement costs of inventory have continued to rise, the Group was able to widen its gross profit margin to 29.1% in 2Q08, from 21.0% in 2Q07, reflecting its effective management of inventories. Net profit margin also increased to 19.2% from 13.2% previously, as the Group benefited from a lower effective tax rate due to its entry into the Global Trader Program from FY2008. For the first six months ended 30 June 2008, Asia Enterprises generated positive net cash flows from operating activities of $10.5 million, to end the period with a healthy cash balance of $16.3 million.

On anannualised basis, its return-on-equity in the first half improved to 30.1%, compared to 20.6% in FY2007. Market Outlook and Prospects Growth of global crude steel production is expected to moderate to 6.8% in 20081, from 8.2% in 2007 while global demand will continue to be supported by the high steel requirement from emerging markets despite slower conditions in the USA and Europe. With the demand-supply environment likely to remain tight, global steel prices are generally expected to stay firm in the second half of 2008. To provide a total solution to its customers and reinforce its position as a Regional Steel Distribution Centre, the Group will continue to maintain a sufficient and comprehensive range of steel products.