China Everbright Limited — Earnings Release 1998

May 21, 1999

Listed Company Information

SHOUGANG CENT<0103> - Results Announcement Shougang Concord Century Holdings Limited announced on 20/5/1999: (stock code: 103) Year end date: 31/12/1998 Currency: HKD Last Current Corresponding Period Period from 1/1/1998 from 1/1/1997 to 31/12/1998 to 31/12/1997 ('000) ('000) Turnover : 1,011,092 1,332,230 Profit-Continuing Operations - Operating Profit/(Loss) : (50,087) (22,429) - Exceptional Items : (104,919) 3,943 - Discontinued Operations : (8,481) (1,986) Total Operating Profit/(Loss) : (163,487) (20,472) Share of Profit/(Loss) of Jointy Controlled Entities -Continuing Operations : 7,859 10,543 -Discontinued Operations : (49,909) (16,599) Share of Profit/(Loss) of Associated Companies : (3,612) (673) Profit/(Loss) after Tax & MI : (198,129) (24,938) % Change over Last Period : N/A EPS/(LPS)-Basic : (25.9 cents) (3.2 cents) -Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : NIL NIL Profit/(Loss) after ETD Items : (198,129) (24,938) Final Dividend per Share : NIL NIL (Specify if with other options) : N/A N/A B/C Dates for Final Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting : N/A Other Distribution for Current Period : NIL B/C Dates for Other Distribution : N/A Remarks: (1) Discontinuing operations (a) On 20th January, 1999, in view of the loss of a major customer, the prolonged economic recession and a contraction of the retail business in Hong Kong, the directors decided to terminate the Group's children's wear manufuacturing and trading business in Hong Kong. The Group is currently in the process of winding down these operations, and the directors expect that the termination process will be fully completed in 1999. The financial effect of these operations on the current and prior years' consolidated profit and loss account have been separately disclosed as discontinuing operations. (b) As the balance sheet date, the Group had three jointly controlled entities (the "Entities") engaging in ferroalloy processing and manufacturing activities in the PRC (collectively the "Bussiness"). The directors have considered that the continued overcapacity situation and decrease in demand for ferroalloy products in Mainland China will have profound and significant impacts on the Business. The situation will be further aggravated by the growing possibility of China's entry into the World Trade Organisation in the near future, which on entry will intensify the competition on the Business. The outlook for the Business therefore remains gloomy and there has been no sign of recovery for the time being. As such, the directors have cautiously reassessed the Group's strategy in respect of its investments in the Entities and have decided to discontinue its financial and operating involvement in the entire line of the Business effective from 3rd May,1999. The directors are of the opinion that the discontinuance of the Business is for and in the best interests of the Group. The financial effect arising from the Business to the current and prior years' consolidated profit and loss account have been separately disclosed as discontinuing operations. (2) Comparative amounts Certain comparative amounts have been reclassified to conform with the current year's presentation. In addition, certain items in the consolidated balance sheet and profit and loss account in the prior year has been restated to conform with the provisions of Statement of Standard Accounting Practice No.21 "Accounting for interests in joint ventures". (3) Exceptional items 1998 1997 HK$'000 HK$'000 Continuing operations: Gian on dilution of the Group's interest in a jointly controlled entity (Note a) 3,943 3,943 Loss on disposal of long term investments (5,874) - Provision for diminutions in values of long term investments (4,322) - Provision for bad and doubtful debts 76,363 - Discontinuing operations: Provision for permanent diminution in value of interest in a jointly controlled entity (22,303) - ---------- ---------- (104,919) 3,943 ========== ========== Note (a): In 1996, the Group's interest in a jointly controlled entity, Xin Hua Metal Products Company Limited ("Xin Hua"), was diluted from 25% to 18.75% as a result of a public issue of new shares by Xin Hua for the purpose of listing its "A" shares on the Shanghai Stock Exchange in the PRC. As a result, the Group recognised a gain attributable to this dilution effect of approximately HK$11,830,000. Such gain on dilution is amortised on a straight-line basis over a term of three years and an amount of approximately HK$3,943,000 is recognised as income for the year. (4) Diltued loss per share Diluted loss per share is not presented as there was no dilutive potential ordinary shares outstanding during the years ended 31 December 1998 and 1997. For more details, please refer to the press announcement today.