Poised for Further Growth

KUALA LUMPUR ,April 2, 2008 – Boustead Heavy Industries Corporation Berhad (BHIC) registered profit before tax of RM82.1 million (before exceptional gains of RM392.8 million due to the waiver from financial institutions pursuant to its restructuring scheme) for its financial year ended 31 December 2007. This is a significant improvement from the previous year’s loss before tax of RM89.9 million.

The BHIC Group’s turnover of RM117.1 million for the year grew by 45% against the turnover of RM80.5 million for the previous year. 2007 saw higher contributions from its existing businesses and associate companies.

The improved result is indeed a remarkable achievement given the adverse financial condition of the BHIC Group prior to the restructuring scheme.

With the restructuring scheme successfully concluded in August 2007, the BHIC Group is now well positioned to focus on future growth.

Based on these results, the Board of BHIC is recommending a dividend of 1.5 sen per share subject to the shareholders’ approval at its thirty-sixth Annual General Meeting.

YBhg. Laksamana Madya (B) Dato’ Seri Ahmad Ramli Haji Mohd Nor, Executive Deputy Chairman of BHIC, said, “This turnaround was made possible due to the success of the corporate and debt restructuring scheme and the tireless commitment by the management team to improve our business performance. To ensure long term sustainability, we are focused in developing our core competencies. With a solid financial foundation and effective workforce, we will harness our strengths and translate them into strategic advantages in the marketplace.”

“Having undergone this critical transformation, we will now concentrate on our efforts to grow our order book and explore the opportunities inherent in the maritime sector which includes naval and commercial ships, oil & gas and luxury yachts.”

In broadening its market reach, the Group has secured contracts with the commercial entities for the construction of five units of chemical tankers, two anchor handling tugs and a well testing and servicing vessel. The Group was also awarded a contract for engineering, procurement, construction and onshore commissioning of Muda Living quarters building from Carigali-PTTEPI Operating Company Sdn Bhd. The Group currently has an order book of more than RM2.5 billion.

The Group’s target is to be a key player in the maritime industry. The Group will continue to strengthen its core competencies in the military vessels and at the same time build its strength in non-military vessels (commercial vessels and luxury yachts). The Group will also further develop its position in the oil and gas sector.

In terms of capacity, the Group’s yard located in Pulau Jerejak, Penang, under its wholly-owned subsidiary, Boustead Penang Shipyard Sdn Bhd, is now fully operational. With its yard in Tema, Ghana, the Group expects to capitalise the growing opportunities from the oil and gas sector in West Africa

Its associate, Boustead Naval Shipyard Sdn Bhd, has successfully delivered two patrol vessels out of the six to the Royal Malaysian Navy and the delivery of the remaining four patrol vessels are on schedule.

“BHIC will build its competitive edge by diversifying our clientele base and remaining focused in improving our productivity and harnessing our human capital. In ensuring the key components are in place, we are in the position to further strengthen our earnings potential.”

The Group’s financial target is consistent revenue and profit growth. Its main focus in the short to medium term is continuous improvement in operational efficiencies and to expand its market reach targeting both domestic and foreign customers.

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