Hyflux LtdQ3 FY2011 Results Review

3 November 2011

� Lower revenue in 3Q11 reflects tail end of two large-scale desalination projects in MENA

� Enhanced contributions from Tuaspring Desalination Plant expected from FY2012 with ramp up of project

� Strong cash position of S$767.8 mil and low gearing allows

Executive Headlines

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� Strong cash position of S$767.8 mil and low gearing allows Group to capture opportunities in the water industry

S$ mil 3Q11 3Q10 % Change 9M11 9M10 % Change

Total Revenue 87.7 137.5 (36) 285.6 379.2 (25)

PBT 13.2 20.7 (36) 39.9 58.9 (32)

PATMI 12.6 19.0 (34) 33.9 52.7 (36)

Q3 revenue is lower as projects in MENA are near completion while projects in Singapore are ramping up

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112.8 (39%)

269.9 (71%)80.1 (28%)

23.0 (6%)

200

300

400

SG/OTH

MENA

China

Asia accounts for the majority of total revenue; Singapore and China will continue to be key drivers for FY2011

Revenue by Country Revenue by Sector

S$ mil S$ mil

325.8 (86%)

41.7 (15%)

51.1 (13%)

4.2 (1%)

2.3 (1%)

200

300

400

Others

Industrial

Municipal

92.7 (33%) 86.3 (23%)

112.8 (39%)

0

100

9M11 9M10

4

239.8 (84%)

325.8 (86%)

0

100

9M11 9M10

� Revenue contribution shifted from MENA to Asia as our key desalination projects in Algeria and Oman are close to completion.

� Municipal sales continued to be the major contributor with the execution of projects in MENA, China and Singapore.

Higher staff and finance costs were incurred in preparation for the Tuaspring project

S$ mil 3Q11 3Q10 % Change 9M11 9M10 % Change

Raw Materials & Consumables

49.2 74.2 (34) 148.4 210.7 (30)

Staff Costs 17.5 15.6 12 43.4 41.3 5

Depreciation & Amortisation 5.1 4.9 5 15.1 11.6 30

Other Expenses (net) (1.4) 21.7 NM 27.9 51.4 (46)

Finance Costs 6.1 4.6 33 17.3 12.6 38

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Total Operating & Fin Expenses

76.5 121.0 (37) 252.1 327.6 (23)

� Decrease in raw materials and consumables used and subcontractors’ cost was in line with lower revenue.

� Staff costs increased as activities for Tuaspring Desalination Plant were scaled up.

� Other expenses decreased due to gains arising from foreign exchange differences as well as sales of machinery and equipment.

� Finance costs increased as a result of higher bank borrowings for the development of Tuaspring Desalination Plant.

Our margins remain stable

3Q11 3Q10 9M11 9M10

Gross Margin 43% 48% 48% 45%

Net Margin 16% 14% 13% 14%

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Our balance sheet is strong and gearing remains low

S$ mil 30 Sep 11 30 Jun 11 31 Dec 10

Equity 925 893 515

Non-current Assets 789 725 666

Non-current Liabilities 810 504 529

Current Liabilities 278 211 316

Net Current Assets 945 672 378

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Net Gearing 0.1x 0.1x 0.7x

� Higher non-current assets were due to net proceeds from the cumulative perpetual preference share issue as well as trade and other receivables, but offset by lower gross amounts due for contract work.

� Current liabilities rose because of higher borrowings.

� Non-current liabilities increased with higher bank borrowings to support upcoming projects.

We have a good cash position to capitalise on future growth opportunities

S$ mil 3Q11 3Q10 9M11 9M10

CF Operating before SCA* (9) 12 27 (19)

CF Operating after SCA* and tax paid (59) 9 (57) (33)

CF Investing 13 (6) (34) (38)

CF Financing 352 134 618 224

Net Cash Changes 307 137 527 153

� Net cash was used in operating activities mainly for investments in new projects.

� Net cash from investing activities reflect sales of machinery and equipment and capital expenditure incurred for the construction of Hyflux’s new headquarters.

� Net cash from financing activities was largely from the proceeds of the new Medium-term Notes issued to fund the Group’s investments in Tuaspring Desalination Plant.

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Net Cash Changes 307 137 527 153

Cash & Cash Equivalents 751 308 751 308

* SCA : Service concession arrangement projects

Industry Outlook

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Mid-term desalination trend remains positive despite slower short-term growth

Global Market Forecast

CAGR: 8 – 9%Market value in 2025: US$25 bil capex

20

15

Ne

w c

on

tra

cte

d c

ap

ac

ity m

m3/d

ay

10 Source: GWI Global Desalination Market Review, June 2011

1980 1990 2000 2010 2020 2030

10

5

0

Ne

w c

on

tra

cte

d c

ap

ac

ity m

m

Top 10 desalination markets by expected contracted capacity

Forecasted capital expenditure on new desalination plants

We are positioned to benefit from our membrane-based desalination advantage and presence in some of the fastest developing markets

20

15

US$ bil

Saudi Arabia

China

UAE

USA

Libya

11 Source: GWI Desalination Market Report, 2010; GWI Desaldata 2011

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

10

5

0

0 1 2 3 4 5 6 7 8

million m3/day of new capacity

2007 - 2011

2012 - 2016

Israel

Kuwait

Algeria

India

Australia

Jordan

WATER SOLUTIONS THAT

IMPACT LIVES

Disclaimer

This presentation has been prepared by Hyflux Ltd for the information of the attendees of this presentation.

This presentation is not and does not constitute or form part of any offer, invitation or recommendation to subscribefor or purchase any security and neither this presentation nor anything contained in it shall form the basis of, or befor or purchase any security and neither this presentation nor anything contained in it shall form the basis of, or berelied upon in connection with, any contract, commitment or investment decision. This document may not be used orrelied upon by any party, or for any other purpose, and may not be reproduced, disseminated or quoted without theprior written consent of Hyflux Ltd.

No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness,accuracy, completeness or correctness of the information or opinions contained herein. None of Hyflux Ltd or any ofits affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any losshowsoever arising from any use of this document or its contents or otherwise arising in connection with thispresentation.

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