Asia Enterprise Q3 Result Release

6 November 2008 ASIA ENTERPRISES’ 3Q08 NET PROFIT UP 57% TO S$8.4M

- Net profit of S$23.9 m for first 9 months of FY2008 already higher than in FY2007

“We have turned in a commendable performance for the first nine months of 2008. While the operating backdrop for regional steel distributors has become more challenging, Asia Enterprises' long held practice of maintaining sound financial fundamentals will better position us to withstand the industry slowdown as well as be ready to capitalise on opportunities that arise.”Mr Lee Choon Bok, Chairman and Managing Director of Asia Enterprises Holding Limited

3Q08 Results Review

Revenue sustained amid slower market conditions Group revenue in 3Q08 was flat at S$43.8 million. This was due mainly to softer demand for steel, which reflected increasing concerns of tighter credit conditions and an impending economic slowdown.

Sales led by shipbuilding and marine-related sectors

Sales to customers in the shipbuilding and marine relatedsectors rose marginally to S$30.2 million toaccount for 69% of Group revenue. The remaining 31% of Group revenue was contributed by stockists/traders and customers in the construction, engineering/fabrication, manufacturing and precisionmetal stamping sectors.

Steady sales to Singapore market

Sales to Singapore rose 8% to account for 39% of Group revenue on the back of the continuing steel requirements for customers’ ongoing projects. Sales to Indonesia and Malaysia accounted for 47% and 12% respectively, with the remaining 2% from other Asia Pacific markets.

Profits boosted by expansion in margins

The Group recorded an exceptional gross profit margin of 31.1% in 3Q08 compared to 20.6% in 3Q07, thanks to higher average selling prices of its steel products. Coupled with a lower effective tax rate following its entry into the Global Trader Program from 2008, the Group’s net profit margin jumped to 19.1% in 3Q08, from 11.7% a year ago.

Growth Strategies and Outlook

Worldwide demand for steel is generally expected to weaken as a result of slowing economic conditions and tight credit markets. After peaking in late July/early August, global steel prices have since declined sharply. The World Steel Association is now forecasting global steel consumption growth in 2008 to slow to 5%, from about 7.5% in 2007.

In the near term, the outlook for regional steel distributors has become more challenging and volatile. With tighter access to credit financing and changing economic circumstances for many projects, highly competitive conditions are expected to prevail in the region’s steel industry. As a result, steel prices are generally expected to stay soft during the remaining months of 2008. To better withstand an industry slowdown and be ready for opportunities that may arise, AsiaEnterprises will ensure it maintains a sound financial position, a practice that has enabled the Group to successfully weather periods of significantly unfavourable business conditions over the past 35 years.

As at 30 September 2008, the Group had total assets of S$171.2 million and shareholders’equity of S$110.7 million, of which S$12.4million comprised of cash and cash equivalents. While the Group has already exceeded its FY2007 net profit, it expects a more volatile and challenging operating environment for steel distributors over the coming months.