Financials

Full Year Quarter Financial Statement Statement for the Period Ended 31/03/2008

Balance Sheet

Review of Performance

The Group’s revenue for the first quarter of the financial year 2008 ("1Q08") declined to S$146.0 million from S$218.3 million in 1Q07 mainly due to lower orders from a major customer. Net profit attributable to shareholders declined from S$12.8 million in 1Q07 to S$5.7 million in 1Q08.

On a segmental basis, the Group’s handset Printed Circuit Board Assembly ("PCBA") and modular products recorded lower sales of S$19.9 million in 1Q08 compared to S$85.6 million in 1Q07. The Group was able to mitigate the drop in revenue with contributions from its new product segments – ultra-low-cost ("ULC") mobile phones, wireless local loop ("WLL") phones and PC motherboards – which posted strong sales of S$17.1 million in 1Q08 despite commencing volume production only towards end FY2007. The Group also recognised S$9.9 million in sales from its plastic components business, which was acquired in July 2007.

The Group continued its business restructuring efforts to improve operational and financial efficiency. It had consolidated its operations in Indonesia (Batam), Malaysia (Cemerlang) and Singapore into its new 32,000 sqm facility in Nusajaya, Malaysia. The Group also transferred some of the production lines from its facilities in Asia to its Jaguariuna, Brazil, plant to meet higher demand for its ODM products and services from the Latin America market. Sales from its Brazil facility have been increasing steadily over FY2007 and the growth momentum has continued into 1Q08. Sales from the Group ’s Brazil operations rose to S$34.1 million in 1Q08 from S$32.6 million in 4Q07.

Commentary On Current Year Prospects

The Group believes the fundamentals for the wireless communication industry remains strong despite the global economic slowdown. With over 20 years of track record in the industry, it is confident of growing within this sector and will strengthen its capabilities and introduce new products and services to secure new customers and build a more diversified earnings base. The Group will continue to seek customers within the wireless handset segment and has also started negotiations with customers on new wireless communication products.

In line with its business restructuring efforts, the Group has divested off its plastic components subsidiary, SEB Pte Ltd, via a share-swap arrangement, and its associated company, China Precision Technology, in 1Q08. Going forward, the Group will continue to assess its operations and may divest off more business assets to strengthen its cash position and reduce its gearing level.

The Group's appointed independent valuer is currently assessing the value of its subsidiary company, i-Sirius, to determine its Intellectual Property (“IP”) value in addition to its business value and will make an announcement on the valuation results in due course.

The Group will continue to realign its manufacturing footprint to derive greater cost savings and increase its presence in key growth regions. The Group believes that Brazil will continue to grow and intends to expand its production capacities by transferring over some of its production lines from other facilities to meet expected higher demand.

The Group is carrying out a full review of its operations and has identified S$15.9 million trade receivables that were contended by its major customer, as announced in April 2008. The Group is currently in discussion with its customer and has made progress in reconciling some of the amount.

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