SembCorp Industries Ltd

Revised Unaudited Full Year Financial Statement And Dividend Announcement

The Board of Directors of SembCorp Industries Ltd announces the revised unaudited results of the Group and Company for the year ended December 31 1998:

GROUP COMPANY

1998 1997 + / (-) 1998$'000 $'000 $'000

1. (a) Turnover 3,900,066 3,309,333 17.9% 69,477

(b) Investment Income 3,940 2,282 72.7% -

(c) Other Income including Interest Income 84,096 56,405 49.1% -

2. (a) Operating Profit before Income Tax, Minority Interests,Extraordinary Items, Interest on Borrowings, Depreciation and Amortisation, Foreign Exchange gain/(loss) and Exceptional Items 426,321 281,275 51.6% 67,427

(b) Interest on Borrowings (98,198) (61,285) 60.2% -

(c) Depreciation and Amortisation (151,148) (112,693) 34.1% -

(d) Foreign Exchange gain/(loss) 7,989 15,742 (49.2%) -

(e) Exceptional Items (150,000) - N.M. -

(f) Operating Profit before Income Tax, Minority Interests,Extraordinary Items but after Interest on Borrowings,Depreciation and Amortisation, and Exceptional Items 34,964 123,039 (71.6%) 67,427

(g) Income derived from Associated Companies 17,207 75,276 (77.1%) - Income derived from Joint Ventures 11,002 4,694 134.4% -

Operating Profit before Income Tax 63,173 203,009 (68.9%) 67,427

(h) Less Income Tax (83,456) (83,447) 0.0% (18,064)

(i) (i) Operating (Loss ) / Profit after Tax before deductingMinority Interests (20,283) 119,562 (117.0%) 49,363

(ii) Less Minority Interests (36,831) (27,270) 35.1% -

(j) Operating (Loss) / Profit after Tax attributable to Members of the Company (57,114) 92,292 (161.9%) 49,363

(k) (i) Extraordinary Items (584,327) (37,435) -

(ii) Less Minority Interests 126,337 (532) -

(iii) Extraordinary Items attributable to Members of theCompany (457,990) (37,967) 1106.3% -

(l) Operating (Loss) / Profit after Tax and Extraordinary Itemsattributable to Members of the Company (515,104) 54,325 N.M. 49,363

3. (a) Operating (Loss) / Profit [2(i)(i) above] as a percentage of Turnover (0.52%) 3.61%

(b) Operating (Loss) / Profit [2(j) above] as a percentage of Issued Capital and Reserves at End of Year (8.69%) 7.14%

(c) Earnings per Ordinary Share for the year based on existing issued share capital (in cents) (3.78) 5.69

(d) Net Tangible Asset Backing per Ordinary Share (in cents) 40.11 80.87

Note :-The 1997 figures represent the combined actual results of the two merged groups, namely, Singapore Technologies Industrial Corporation Ltd ("STIC") and Sembawang Corporation Limited ("Sembawang") adjusted for accounting policies in respect of the accounting for joint ventures and investment properties and profit recognition for long-term construction contracts to be consistent with those policies adopted by the Group.

N.M. --- Not Meaningful

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GROUP COMPANY1998 1997 + / (-) 1998$'000 $'000 $'000

4. (a) Sales reported for first half year 2,076,681 1,438,610 44.4% -

(b) Operating Profit [2(i)(i) above] reported for first half year 82,049 68,696 19.4% -

(c) Sales reported for second half year 1,823,385 1,870,723 (2.5%) 69,477

(d) Operating Profit [2(i)(i) above] reported for second half year (102,332) 50,866 (301.2%) 49,363

5. (a) The Group tax charge was reduced by over-provisions of current tax of $872,000 and deferred tax of $9,337,000 in respect of prior years.(b) There were no pre-acquisition profits included in the results reported.(c) There are no material profits from sale of properties in the results reported, except those sold in the ordinary course of the Group's business. (d) The Group's extraordinary items comprise the following:

1998 1997$'000 $'000

(i) Gain on disposals of long-term investments 110,708 23,581(ii) Provision for diminution in value of long-term investments (295,012) (10,604)(iii) Provision for development properties (136,310) - (iv) Write off of loan to subsidiary and associated companies (74,776) - (v) Write down of fixed assets (64,903) - (vi) Provision made in respect of foreseeable losses in associated

and joint venture companies (35,780) - (vii) Provision for receivables (46,026) (9,455)(viii)Provision for losses relating to cessation/disposal of subsidiaries (16,000) (29,998)(ix) Provision for commitments of investment in an investee

company and subsidiary (10,380) - (x) Others (12,669) (10,959)

(581,148) (37,435)less : Minority Interests 123,158 (532)

(457,990) (37,967)

6. Business Segmental Information

By Business ActivityTurnover Profit before Tax

1998 1997 1998 1997$'000 $'000 $'000 $'000

Infrastructure 1,722,947 1,767,749 106,692 100,502Marine Engineering 935,285 537,440 99,012 29,817Information Technology 538,329 420,735 33,425 19,928Leisure & Lifestyle 579,546 502,159 33,144 27,811Corporate # 8,350 18,042 (65,490) (40,758)Others 115,609 63,208 6,390 65,709

3,900,066 3,309,333 213,173 203,009Exceptional Item - - (150,000) - Total 3,900,066 3,309,333 63,173 203,009

# After adjusting for dividend income from subsidiary companies and inclusion of investment income

By Country of Incorporation

Turnover Profit Before Tax1998 1997 1998 1997$'000 $'000 $'000 $'000

Singapore 3,446,270 2,912,383 75,363 199,337Rest of Asia 268,293 247,770 (13,277) 5,435Others 185,503 149,180 1,087 (1,763)

3,900,066 3,309,333 63,173 203,009

By Geographical AreasLocal 88.4% 88.0%Overseas 11.6% 12.0%

100.0% 100.0%

7 Review of Performance

Turnover for 1998 increased by 17.9% from $3.3b to $3.9b. The higher turnover is mainly attributed to the increase in turnover from Marine Engineering; Information Technology; and Leisure & Lifestyle. The higher sales in Marine Engineering and Leisure & Lifestyle sectors were due to organic growth and the full year impact of consolidating Jurong Shipyard Limited ("JSL") and Delifrance. The contribution from a newly acquired subsidiary by ST Computer during the year, and the increase in sales in Asia Pacific resulted in higher sales for the Information Technology sector.

Operating Profit Before Tax ("PBT") showed a 71.6% decline over 1997, largely impacted by the Exceptional Item of $150m. Excluding the $150m exceptional item,PBT would have showed a 5.0% improvement over 1997 and this improvement was largely due to higher profit from the Marine Engineering sector arisingfrom better performance from offshore upgrading works and ship conversion activities and the full year consolidation of the results of JSL. The turnaround of Pacific Internet from a loss of $2m to a profit of $16m, also contributed to this improvement. The overall in PBT for 1998 was affected by the decline in contribution from an associated company, First Capital Corporation Ltd, which contributed $43.9m in 1997, losses in Sembawang Capital Pte Ltd due to increase in provisions against the value of its assets and higher interest incurred in the funding in the acquisition of JSL and Delifrance and higher interest rates in 1998.

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Review of Performance (cont')Exceptional ItemsIn November 1993, Sembawang was awarded a $230m contract by Allseas, owners of the vessel Solitaire ("the Owners) for the conversion of a bulk carrier into a dynamically positioned pipe lay vessel. The Owners terminated the contract on October 24 1995 before works were fully completed alleging failure on the part of Sembawang to complete the project in time as well as for breaches of certain contractual obligations. Sembawang is challenging this action of termination and is counter-claiming for damages and work done prior to the wrongful termination.

Arbitration commenced in London between Sembawang and Owners in 1996.

Since then, two main hearings and several preliminary issues hearings have taken place over the last three years on various issues, amongst others, an assessment ofOwners' ability to recover loss of profit and the design responsibility of Sembawang.

The Owners' claims total approximately GBP142m (equivalent to approximately $410m). Sembawang has filed claims totalling approximately $231m (comprising $137m for Variation Orders Requests and $94m for work done but which was not paid) less the offset of $115m in respect of the balance of the original contract value. The net balance of the cost of work-in-progress in Sembawang's books stood at $86m as at December 31 1998. These claims and counter claims could result in a netexposure of approximately $150m for Sembawang.

The latest hearing which took place in September 1998 lasted 12 weeks. The main issue was whether Sembawang was in repudiatory breach of its obligations.Following the latest hearing, the Tribunal has recently indicated that it has not reached a final decision on the issue of termination. A hearing is nowscheduled for September 1999 to deal with the state of completeness of the vessel as at the date of termination. Further evidence on the issue concerning termination will be adduced before the Tribunal in a final hearing on termination, which is expected to commence in September 2000.

Notwithstanding the fact that the Owners' alleged claim of the right to terminate the contract has not been decided upon by the Tribunal, the Directors and management feelthat it will be most prudent to provide a one-time exceptional item of $150m in the financial year. This provision is made for financial prudence only and merely reflects a cautious approach to discount the difference that may result from the extreme positions of winning or losing the case. It is in no way an admission of any fault or liability asSembawang intends to continue to strenuously defend its position that the Owners' termination was unlawful.

8. Subsequent Events(a) Listing of Pacific Internet Limited on NASDAQ

On February 5 1999, a subsidiary company, Pacific Internet Limited ("PacNet") launched its initial public offer of 3,000,000 ordinary shares of $2 per share, at an offer price of US$ 17 per share on the NASDAQ in the United States. The Group divested 815,516 ordinary shares of PacNet and realised a profit of about $22m. The Group now holds 54.6% in PacNet.

(b) Acquisition of ST Logistics Pte Ltd ("ST Logistics") by Sembawang Marine & Logistics Limited ("SML")On March 8 1999, SML acquired 100% of ST Logistics from STIC for an aggregate consideration of $126m through the issue of 73,987,081 new shares of $1.00 each at $1.703 per share. As a result, the Group's effective shareholding in SML increased from 57.15% to 75.3%. On the same day, SML was renamed SembCorp Logistics Ltd.

(c) Redemption of Sembawang Resources Limited's ("SRL's") unsecured bonds ("Bonds") and Sembawang Corporation Limited's ("Sembawang's") Medium Term Notes ("Notes")SRL's discontinuance of its property development and hospitality businesses resulted in technical non-compliance with certain convenants given at the time of the issue of the Bonds and the Notes. On March 1 1999, both the bondholders and noteholders agreed to waive compliance with these convenants, and to amend certainprovisions of the Trust Deeds. In consideration therefor, SRL and Sembawang agreed to increase the interest rate payable on the Bonds and Notes by 50 basis points perannum, together with a corporate guarantee from the Company. The bondholders and noteholders may elect to require the respective companies to redeemthe Bonds and Notes at its principal amount including any accrued interest thereon at the prevailing interest rates.

On March 19 1999, SRL and Sembawang redeemed $86.25m and $36.75m of Bonds and Notes, respectively, pursuant to the above arrangement.

9. Current Year's ProspectsIn the opinion of the Directors, the coming year will see SembCorp reap the benefits of the merger, through cost savings, synergy of operations and divestments of non-core businesses. Assuming the economic and market conditions in our areas of operations do not deteriorate further, and barring unforeseen circumstances, the Group expects to show an improved operating profit in 1999.

10. DividendThe Directors recommend that a first and final dividend of 10% less tax 26% amounting to $29,194,850 to be paid for the financial year ended December 31 1998. The proposed dividend if approved at the AGM to be held on June 24 1998 shall be paid on July 16 1999.

Closure of BooksRegistrable Transfers received by the Company's Registrar, M&C Services Private Limited at 16 Raffles Quay, #23-01 Hong Leong Building, Singapore 048581, up to 5.00 pm on July 2 1999 will be registered before entitlements to the proposed dividend are determined. The Register of

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Transfer and the Register of Members of the Company will be closed from July 5 1999 to July 7 1999, both dates inclusive, for the payment of dividend.

11. Balance Sheet as at December 31 GROUP COMPANY

1998 1997 1998$'000 $'000 $'000

Fixed assets and assets on lease 1,709,167 1,684,677 - Investment properties 174,166 222,117 - Investments in subsidiaries - - 394,500Associated companies 369,347 685,247 - Joint ventures 235,050 228,916 - Other investments 261,337 387,039 - Long term receivables 96,501 151,894 - Hire purchase, mortgage, lease & instalment receivables 143,021 109,399Deferred expenditure 24,192 15,550 - Current assets 2,696,460 3,089,776 51,571Less : Current liabilities (2,997,317) (3,115,395) (31,281)Net current assets (300,857) (25,619) 20,290

2,711,924 3,459,220 414,790Less : Non-current liabilitiesTerm loans (756,973) (837,109) - Other non-current liabilities (157,410) (153,005) -

1,797,541 2,469,106 414,790

Share capital 394,525 394,500 394,525Capital reserves 564,752 646,545 97Revenue reserves (304,423) 242,889 20,168Foreign currency translation reserves 2,275 7,790 - Share capital and reserves 657,129 1,291,724 414,790 Minority interests 790,412 827,382 - Interests of preference shareholders in a subsidiary 350,000 350,000 -

1,797,541 2,469,106 414,790

12. Changes in the Company's Share CapitalThe Company was incorporated on May 20 1998 with an authorised share capital of $100,000 divided into 100,000 ordinary shares of $1 each. At the time ofincorporation, 2 ordinary shares of $1 each were issued at par for cash to the subscriber shareholders.

On July 10 1998, the Company:(i) sub-divided its ordinary shares of $1 each into ordinary shares of $0.25 each; and(ii) increased its authorised share capital from $100,000 comprising 400,000 ordinary shares of $0.25 each to $500m, comprising 2,000,000,000 ordinary shares of

$0.25 each, by the creation of 1,999,600,000 new ordinary shares of $0.25 each.

On October 3 1998, the effective date of the Scheme of Arrangement, the Company alloted and issued 1,577,999,238 shares of $0.25 each in the capital of the Company, credited as fully paid, to the shareholders of STIC and Sembawang ("the Scheme Companies") in exchange for their respective shares in the Scheme Companies on the basis of the share exchange as set out in the Scheme of Arrangement.

During the financial year, the Company also issued 101,240 ordinary shares of $0.25 each upon the exercise of options by executives of the Company pursuantto the Company's Executives' Share Options Scheme.

As at December 31 1998, there were unexercised options for 29,383,655 unissued ordinary shares of $0.25 each.

13. Group's BorrowingsAs at As at

31/12/98 30/6/98$'000 $'000

Unsecured(i) Repayable within 12 months 1,163,216 1,008,096(ii) Repayable after 12 months 730,005 903,579

1,893,221 1,911,675

Secured(i) Repayable within 12 months 11,063 35,701(ii) Repayable after 12 months 422,637 445,995

433,700 481,696

Total 2,326,921 2,393,371

The above total borrowings includes that of Sembawang Capital Pte Ltd of $255m and $305m at December 1998 and June 1998, respectively.

14. Year 2000 StatementY2K Compliance definition Year 2000 (Y2K) compliant means information technology that accurately processes date/time data (including, but not limited to, calculating, comparing and sequencing) from, into, and between the twentieth and twenty-first centuries, and the years 1999 and 2000 and leap year calculations. Furthermore, Y2K compliant information technology, when used in combination with other information technology shall accurately process date/time data.

Impact on Group's BusinessThe Group recognises that the Y2K problem will have some impact on its business as its customers, key business partners and suppliers embark on their owninitiatives and programmes to address the problem. There is no absolute assurance that the Y2K problem will not materially affect the Group's operations and financial results. The Group has, however, made all efforts to ensure that any impact on its business will be minimised with no disruption to its activities or undue exposure to liabilities.

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The Y2K effort is being monitored very closely and based on current assessment and upon successful completion of the Group's Y2K programme, no significant impact is foreseen.

Year 2000 Statement (cont')Actions to address Y2K IssueSince 1997, the Group has taken steps to minimise risks associated with Y2K problems. A Group Y2K Steering Committee comprising key staff from Corporate HQ and major subsidiaries was established in 1997 to address the Y2K issues and to also monitor the Y2K activities in the Group to ensure thatappropriate Y2K compliance programmes are implemented on a timely basis.

Listed subsidiaries, major unlisted subsidiaries and other subsidiaries and associated companies that are highly dependent on computerised systems for operations are also required to establish their own Y2K Committee to address the Y2K issues.

Steps were taken to assess the Y2K readiness of its infrastructure and to ensure that all internal systems were Y2K compliant. A comprehensive inventory ofhardware and software systems in use across all business units within the Group was compiled and reviewed by the Group. All critical systems have been identified, assessed and tested. Wherever necessary the systems have been replaced and/or modified to meet the standards of Y2K compliance. The Group isalso working with its customers and suppliers to prepare for Year 2000 compliance.

Progress of Y2K EffortThe Group is well advanced in ensuring all its computer systems will be Y2K compliant by 3rd quarter 1999. The Group continues to monitor the Y2K readiness of all third-party systems and services. Letters have been sent to all appropriate vendors that supply goods and services to the Group inquiring about their Y2K plans to ensure Y2K readiness. In addition, the Group is putting in place business contingency plans to minimise the potential impact to the operations.

The Group also recently signed the Millennium Accord which allows settlement of disputes by management negotiation or mediation beforeresorting to arbitration or court action arising from any disputes on Y2K issues.

Estimated Costs of Y2K programThe estimated cost of the Group's Y2K compliance programme is estimated to be $14.0m, of which $5.9m has been accounted for in thefinancial statements up to December 31 1998 ($3.8m capitalised, and $2.1m expensed).

BY ORDER OF THE BOARD

Linda Hoon (Ms)COMPANY SECRETARYApril 26 1999

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