PRESS RELEASE Berli Jucker announces strong operating results for the first half Berli Jucker Public Co. Ltd. announced today that net income for the first six months of the year was baht 235.3 million. Net income for the second quarter was reduced by a provision of baht 87.9 million in respect of foreign exchange fluctuations associated with the flotation of the baht. Excluding this provision, net income for the half year grew by 13% to baht 323.2 million as strong contributions from the Group's consumer products and engineering businesses more than compensated for a slower first half for the packaging business. Consolidated total revenues increased by 4.1% to baht 5.2 billion while earnings per share declined by 17.4% from baht 4.94 to baht 4.08 due to the provision for foreign exchange fluctuations. Dr. Adul Amatavivadhana, Berli Jucker's President, said: "Our results continue to demonstrate the strength of the Group's four core businesses but our overall performance was below expectations. Earnings momentum, excluding foreign exchange fluctuations, slowed amid the continuing deterioration of the economy as net income growth fell to 11% in the second quarter from 16% in the first quarter. Sales of consumer products in the first half increased by 14%, with a commensurate increase in profit contribution, due to continued strong demand for our paper products, snack foods, personal care and wine ranges. 2/ The technical products group achieved a 5% growth in sales led by pharmaceuticals and basic hospital supplies. Profit contribution from this group, which imports most of its products, was reduced from the same level as a year ago by provisioning for foreign exchange fluctuations. Packaging activities saw improved momentum at Thai Glass in the second quarter but continued to suffer from reduced demand for bottles from spirits producers and soft drink manufacturers. Sales for the half year were 7% lower than in 1996. Profit contribution was reduced by 18% due partly to foreign exchange losses. Berli Prospack, in which we acquired a 50.1% shareholding in June, will not make a significant contribution until the second half. The engineering group increased sales by 56% due to increased productivity at Thai-Scandic Steel and substantial growth in sales of materials handling systems and industrial weighing scales by the Company's own Engineering division. Thai-Scandic Steel booked a substantial foreign exchange loss provision in the first half but still managed to cut losses by 55% from a year earlier. This, together with increased profitability of the Company's own Engineering division, resulted in a 67% reduction in losses for this group in the first half. There was no contribution from Siemens Limited." Regarding foreign exchange issues, David Nicol, Berli Jucker's Chief Financial Officer, said: "While the Company's US$95 million in foreign currency term loans had been swapped during the first half, as had a proportion of such loans at Thai Glass, other exposures related to accounts-payable and working capital had not been hedged. 3/ The Baht's flotation on 2nd July 1997 prevented these liabilities from being settled at exchange rates even approximating those at the end of the first half. Accordingly we have booked a provision for the resulting foreign exchange translation loss as a post balance sheet adjusting event in our second quarter results based on closing exchange rates on 3rd July. The Group's foreign exchange exposures have since been further reduced through forward foreign exchange contracts. The Group's operational foreign exchange exposures are mainly in respect of steel imports to Thai-Scandic Steel, energy and maintenance costs at Thai Glass, pulp purchases by Cellox Paper and the importing of medical products and photographic and electronic imaging products by the Company." Dr. Adul went on to comment on the outlook for the full year: "The critical issues for the remainder of the year are the extent to which sales, and possibly margins, are effected by the impending increase in VAT and the degree to which we succeed in recovering cost increases resulting from the bath's de-facto devaluation. It is too early to arrive at reliable estimates of these issues but I am still anticipating a healthy overall result and an acceptable return on equity for the full year. The Group will not however be able to match its 1996 level of profitability." 15th August, 1997 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