Singamas Container : ANNOUNCES 2019 INTERIM RESULTS

[For Immediate Release]

SINGAMAS ANNOUNCES 2019 INTERIM RESULTS

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FOCUS ON DEVELOPING SPECIALISED CONTAINERS TO ENHANCE COMPETITIVENESS

STRATEGIC TRANSFORMATION INTO THE "NEW SINGAMAS"

(Hong Kong, 21 August 2019) - World-leading container manufacturer and logistics services provider Singamas Container Holdings Limited ("Singamas" / the "Group") (stock code: 716) has today announced its unaudited interim results for the six months ended 30 June 2019 (the "review period"). During the review period, the Group's consolidated revenue was US$584,025,000 (1H2018: US$969,217,000), and consolidated net loss attributable to owners of the Company totalled US$50,327,000 (1H2018: loss of US$2,104,000), including a provision of deferred tax charge of US$8,825,000 arising from the disposal of several subsidiaries of the Company. Basic loss per share was US2.08 cents, versus basic loss per share of US0.09 cent in the first half of 2018.

In the first half of 2019, trade tensions between the United States of America ("US") and the People's Republic of China ("PRC") acted as a catalyst for keen competition in the container manufacturing industry. Moreover, overproduction during the preceding up cycle resulted in a glut of dry freight containers, which led to a decline in the selling price of new containers. In order to de-risk from the volatile and trade-driven market, Singamas has adopted an enterprising view towards its operation, electing to transform its traditional business by disposing several companies as part of its transformation into the "New Singamas" - a leading manufacturer of specialised containers.

MANUFACTURING

During the review period, demand for dry freight containers weakened significantly, which, accordingly, impacted the Group's manufacturing business. The segment's revenue was US$570,536,000 (1H2018: US$955,717,000), which accounted for 97.7% of the Group's total revenue (1H2018: 98.6%). A production volume of 308,163 twenty-foot equivalent units ("TEUs") was attained, in comparison with 458,374 TEUs for the corresponding period last year. The average selling price ("ASP") of a 20' dry freight container fell from US$2,203 for the same period last year to US$1,791 for the review period. For the period ended 30 June 2019, a total of 296,315 TEUs were sold (1H2018: 457,610 TEUs), recording a segment loss before taxation and non-controlling interest of US$45,261,000 (1H2018: loss of US$2,043,000) for the review period.

Operation of the specialised container segment has nonetheless performed encouragingly. In particular, customised specialised containers including energy storage, power generator and data centre containers along with many others have demonstrated favourable performance during the review period, hence enabling the Group to attract a diverse range of customers from various sectors, including overseas origins. Singamas is in the process of recruiting more talent for research and development purposes so as to facilitate the growing demand for customised specialised containers, as well as to meet the technological requirements of such products.

LOGISTICS SERVICES

Demand for Singamas' logistics services business has not been affected by the decline in export volume during the review period. Consequently, the segment recorded a revenue of US$13,489,000 (1H2018: US$13,500,000), almost the same with the corresponding period last year. The Group's subsidiaries handled approximately 327,000 TEUs (1H2018: 370,000 TEUs) of containers during the review period. The number of containers repaired was 70,000 TEUs (1H2018: 78,000 TEUs) and average daily container storage totalled

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Singamas Announces 2019 Interim Results

Focus on Developing Specialised Containers to Enhance Competitiveness; Strategic Transformation into The New Singamas 21 August 2019

23,000 TEUs (1H2018: 26,000 TEUs). Segment profit before taxation and non-controlling interest increased

91.9% to US$2,448,000 (1H2018: US$1,276,000) due to growing business of the logistic company in Xiamen and other associate depots.

Notably, the Group's joint venture with Apollo Logisolutions Limited in India has been progressing well. Principally involved in the transportation of industrial chemicals by specialised tank containers in India, Singamas has benefitted from the venture through the provision of liquid tanks. Furthermore, the Group plans to explore expansion opportunities for its logistics services network in Southeast Asia, with the purpose of building a regional network to complement the business.

PROSPECTS

Mindful of the aforementioned challenges that the container manufacturing industry is expected to endure in the near future, the management has taken decisive action to advance the Group's development and transformation into the "New Singamas". Subsequent to the Group's foremost initiative to dispose five of its wholly-owned subsidiaries ("the Disposal"), Singamas will continue to own and operate ten container depots and five manufacturing facilities in the PRC1. A new factory for specialised containers in Huizhou is also currently under construction, and will commence operation in the first half of 2020.

To further enhance its competitiveness in the specialised container market, Singamas will focus on co-operating closely with its customers to deliver bespoke services and further bolstering its R&D capabilities to meet higher technological requirements, as well as strengthening its brand exposure in the market by actively participating in industry exhibitions to showcase its 30 years' worth of industry experience and capabilities. With the shedding of various assets and the bolstering of different facets of operation, the Group will become nimbler and more capable of adapting to the demands of the specialised container market.

Mr Teo Siong Seng, Chairman of Singamas, said: "Singamas' decision to gradually shift its focus away from manufacturing traditional dry freight containers to specialised containers will enable it to become a niche market player with high value-added products to cater for a wide spectrum of industries. We are confident that, with the actions now being taken, combined with the Group's scale, reputation and expertise, Singamas is well on its way to making the new Singamas a new reality."

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About Singamas Container Holdings Limited

Singamas is one of the world's major container manufacturers and logistics services providers. Its manufacturing business covers container factories located in the PRC that focus on the manufacturing, R&D and sale of dry freight and specialised containers, while its logistics operations include container depots located in key locations in the PRC and in Hong Kong, as well as a logistics company in Xiamen, the PRC. Riding on its comprehensive investment strategies, the Group is consolidating its market leadership in the global container industry. For details, please visit: www.singamas.com.

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1 Subsequent to the Disposal, Singamas will continue to own and operate ten container depots including those in the PRC (Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Fuzhou, Xiamen and Guangxi) and two in Hong Kong and a logistic company in Xiamen; as well as five manufacturing operations in Shanghai Baoshan, Shanghai Jiading, Yixing, Xiamen and Huizhou.

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