Jaya Holdings Limited : Results for the First Quarter ended 30 September 2008

JAYA HOLDINGS LTD

13 Tuas Crescent

Singapore 638707

Tel: [phone]

Fax: [phone]

Jaya's 1Q FY09 revenue up 11% on firmer charter rates and larger fleet

• Group net attributable profit up 12% at S$46.3m before forex loss

• Excluding ship sales, chartering division saw six-fold jump in PATMI

from S$2.5m to S$16.1m

SINGAPORE, 7 NOVEMBER 2008 FOR IMMEDIATE RELEASE

SGX-listed Jaya Holdings Ltd (Jaya, or the Group), a leading offshore shipping and shipbuilding group, reported an 11% rise in revenue to S$63.0 million in the first quarter ended 30 September 2008 (1Q FY09), thanks to firmer charter rates and its expanded fleet of offshore support vessels.
The Group's net attributable profit (PATMI), however, fell to S$9.1 million in 1Q FY09, against S$42.2 million previously. The decrease was largely due to S$27.0 million in unrealised 'marked-to-market' (MTM) losses on foreign exchange hedging instruments and another S$10.2 million in foreign exchange (forex) losses from revaluation of assets and liabilities held in foreign currencies particularly bank loans denominated in U.S. dollars into the SGD reporting currency. Excluding these items, the Group's PATMI of S$46.3 million in 1Q FY09 showed an increase of 12% year- on-year.
Mr Chan Mun Lye, Jaya's Chief Executive Officer, explained: "As a matter of policy, Jaya has a foreign currency hedging programme to manage its operating and shipbuilding costs. Our revenues from ship sales and chartering operations are denominated largely in USD whereas our operating costs including shipbuilding equipment purchases and subcontract costs are denominated in a basket of currencies including USD, SGD, Euros and NOK. The nature of the shipbuilding business is such that there is a fairly long construction lead time. The Group would at times enter into forex contracts to hedge against an appreciation of currencies (other than USD) for which it has underlying requirements. By adopting such forex hedging policy we ensure a reasonable profit margin for our shipbuilding business although it may also mean that we are giving away some upside profits should the USD appreciate against the currencies that were hedged.

JAYA HOLDINGS LTD

13 Tuas Crescent

Singapore 638707

Tel: [phone]

Fax: [phone]

The unrealised forex loss of S$27.0 million represents the "marked-to-market" (MTM) valuation of our hedging position as at 30 September 2008, and such MTM value will vary in the future depending on the exchange rate volatility of the hedged currencies. The MTM valuation is expected to be offset by the SGD-equivalent revenues and profits to be recognised when the Group receives the USD proceeds in future sales.
Revenue for Jaya's offshore ship-chartering division rose 75% quarter on quarter to
S$25.5 million with the average daily charter rate in 1Q FY09 having increased by
48% to S$10,509. There were also improvements to the fleet quality with five more anchor handling tug supply vessels (AHTSes) than a year ago. The division sold two vessels in the quarter under review against three vessels in the corresponding previous quarter. Excluding gains from vessel disposals and forex losses, chartering PATMI
saw a near six-fold jump to S$16.1 million from S$2.5 million in 1Q FY08. Including these items, the division's PATMI of S$11.1 million was 66% lower.
The shipbuilding division booked in sales of S$37.1 million with progressive recognition on seven vessels at an average rate of 16%, against eight vessels under progressive recognition at an average rate of 17% in 1Q FY08. Excluding the forex losses, the division recorded a PATMI of S$17.2 million, 115% higher than the $8.0 million in 1Q FY08. However due to the adverse forex movements during the quarter the division suffered a net loss of S$2.0 million in 1Q FY09, against a profit of S$7.5 million previously.
The Group continued to generate positive net cash from operating activities, which came in at S$14.6 million in 1Q FY09, against S$15.7 million in the previous quarter.
Looking ahead, Mr Chan said Jaya will continue to pursue its dual business lines of owning vessels for charter and building ships for sale to third parties. He noted: "This model has stood the test of time and has seen Jaya through several cycles in the
marine industry. In order to ensure a stronger stream of cashflows, going forward we
will aim to sell more vessels, rather than keeping them for charter."

JAYA HOLDINGS LTD

13 Tuas Crescent

Singapore 638707

Tel: [phone]

Fax: [phone]

ABOUT THE COMPANY www.jayaholdings.com

SGX mainboard listing: March 1992

Jaya is a highly regarded offshore shipping and shipbuilding firm. Originally a tug and barge operator, it has moved aggressively to refocus its resources on strengthening its current businesses of shipbuilding and ownership & chartering of offshore support vessels.

Under its charter arm, Jaya boasts a versatile fleet of young, sophisticated vessels that cater to the booming oil & gas sector. Its 30-odd vessels service a wide base of high-profile clients across the globe.

Jaya has put in place a newbuilding programme of 70 vessels, with completions targeted for the current and following two financial years. These vessels are mainly anchor handling tug supply vessels (AHTSes) and platform supply vessels (PSVs), but include work barges as well.

Jaya owns three shipyards, located in Singapore, Batam and Nantong Qidong in China. The Batam and Nantong Qidong shipyards are being expanded and, when fully developed, will be ready to serve the growing global demand for new vessels. Jaya's total capacity will double to

96.6 acres, with a total shoreline of 1,250m.

FOR FURTHER ENQUIRIES

MR CHAN FOOK KONG JAYA HOLDINGS

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MS HUANG YINGLING OAKTREE ADVISERS

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MS LILIAN SIM OAKTREE ADVISERS

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Other media releases on the company can be accessed at www.oaktreeadvisers.com