PRESS RELEASE Strong profit at Berli Jucker despite slowing economy Berli Jucker Public Co. Ltd. announced today that net income for the fourth quarter was baht 74.1 million and for the full year was baht 384.5 million. Foreign exchange losses associated with the flotation of the baht, net of taxation and minority interests, amounted to baht 36.4 million for the fourth quarter and Baht 165.2 million for the year. Excluding these foreign exchange losses, net income for the fourth quarter of 1997 was baht 110.5 million, down 23 percent on the same quarter of 1996 and for the full year 1997 was baht 549.7 million, down 9 percent from 1996. Consolidated total revenues increased by 1 percent in the fourth quarter to baht 2.76 billion, and for the full year increased by 5 percent to Baht 10.77 billion. Earnings per share for the fourth quarter declined by 49% to baht 1.29 and by 37 percent to baht 6.66 for the full year. Commenting on the results for the fourth quarter, Dr. Adul Amatavivadhana, Berli Jucker's President, said: "Berli Jucker's ability to maintain revenues in the fourth quarter, in the face of extremely challenging economic conditions, is a testament to the quality of our management and the underlying strength of our customers and product range. It also confirms the benefit of the diversity of the Group through our four core business lines: consumer products, technical 2/ products, packaging and engineering. Net income was again held back by foreign exchange losses, although these were much reduced compared with earlier quarters due to additional foreign exchange hedging, as well as lower margins, as the Group works to increase selling prices in line with rising costs. Sales of consumer products in the fourth quarter increased by 3 percent with overall demand clearly dampened by increased duty rates and higher prices due to the weakening baht. Net profit contribution decreased by 33 percent, however, due to reduced operating margins associated with sharp increases in the price of pulp, palm oil and packaging. It is now inevitable that these cost increases will be passed on to consumers. The technical products group recorded a 10 percent contraction in sales due mainly to sharply reduced demand for photographic and electronic imaging equipment, caused by duty increases and price rises reflecting the weakening baht, as well as the repossession of equipment sold under hire purchase agreements. Profit contribution from this group, which imports most of its products, declined by 91 percent due to reduced operating margins, bad debt provisions and foreign exchange losses. In the packaging group, Thai Glass achieved an 8 per cent increase in sales due to a combination of price increases and very strong demand for beer bottles which more than compensated for sharply reduced demand for food containers, solf drinks bottles and whisky bottles. Profit contribution declined by 15 percent due to a combination of reduced margins and foreign exchange losses, the effects of which were partly offset by the Company's increased shareholding in Thai Glass from 60 percent to 65 percent. Berli Prospack, which provides rigid plastic packaging and in which we acquired a majority shareholding in June, contributed a profit for the quarter. 3/ The engineering group recorded marginally higher sales on the quarter from a year earlier, while its loss widened due to substantial foreign exchange losses at Thai-Scandic Steel and increased bad debt provisions at the Company's own Engineering division and its water- projects affiliate. There was no contribution from Siemens Limited in the quarter." Dr. Adul went on to comment on prospects for the future: "1998 will be a difficult year. While we should continue to be profitable, and are clearly in much better shape than many of our competitors, it is too early to indicate whether net profit will be higher or lower than in 1997. The Group has a broad range of largely essential products well placed within their markets which are being sold to a broad customer base. The underlying demand for these products will continue despite the poor economy. We have gone through the first phase of the financial crisis relatively well, thanks to the Company's conservative financial management. Our immediate focus is in restoring margins eroded by the fall of the baht and managing cash flow. The medium term focus is on using the Company's strong financial base to consolidate positions in our core industries and ensure the Company is well placed to participate in and contribute to the recovery of Thailand's economy". 2nd March 1998 For further information contact: Dr. Adul Amatavivadhana, President Tel: 367-1012 David Nicol, Executive Vice President Tel: 367-1024 E-mail: davidnicol@berlijucker.co.th