operating results for the Second Quarter of Y 2008

H.T. SET.014 / 2008 Date : August 13th , 2008 To : President The Stock Exchange of Thailand Re : Singer Thailand operating results for the Second Quarter of Y 2008 For the quarter,the Company has generated a profit of Baht 12.9 Million, which represents a significant improvement compared a loss of Baht 116.6 Million for Q2 2007. As a result, the Company's Earning Per Share (EPS) was Baht 0.05 compared to a negative figure of Baht 0.43 for Q.2 2007. Comparing with the first quarter 2008, the Company has improved its net income by 23.3% of Baht 10.5 Million in Q1 2008 vs Baht 12.9 Million in Q2 2008 and its EPS from 0.04 to 0.05. During the second quarter of Y2008, the major highlights were:- - The Company has generated a positive operating cash flow for Q.2 equal to Baht 53.0 Million and a positive cash flow for Q1.& Q.2 equal to 200.7 Million - From the positive operating cash flow, the Company had been able to pay outstanding loans for Q.2 amounting Baht 53.0 Million, and for Q.1& Q.2 amounting Baht 200.8 Million. - From the end of December 2007, long-term loans have been reduced by Baht 161.7 Million from Baht 683.3 Million to Baht 521.6 Million whereas short-term loans slightly increased by Baht 0.8 Million from Baht 653.2 Million to Baht 654.0 Million giving a total reduction of borrowings of Baht 160.9 Million. - At the end of June 2008, the Company had a total of 211,777 installment accounts out of which 33,271 motorcycle accounts represented 15.7% of total portfolio, and the inventory of used motorcycles was reduced to 2,115 units. - At the end of June 2008, the percentage of paying accounts which is measuring how many accounts are paying from the total portfolio has been improving by 3.04% compared with the end of December 2007. The Company's TV commercials highlighting a multi brands, multi products trade-in strategy have been so overwhelmingly received that the Company plan to keep it on until the end of the year taking advantage of the opportunity of a huge replacement business for the Company. The Company has confirmed successful U-Turn converting a core business based on motorcycles into a core business based on electrical home appliances as shown in total gross sales for the second quarter of Y2008, in which the motorcycle business represented only 5.5% of the total Gross Product Sales for the Quarter. In order to create a complete, updated and consistent customer and guarantor contact information and streamline the credit approval process including with improving the account checking function, the Company has re-engineered the Credit Process and Customer Database Enhancements under the supervision of the Head of Corporate Internal Audit. Comments to Key Financial Numbers: Income Statement The operating performance for Q.2 2008 is indicating that the Company has generated net profit of Baht 12.9 Million compared to the losses of Baht 116.6 Million for Q.2 2007. The revenue decreased from Baht 697.7 Million for Q.2 2007 down to Baht 615.3 Million or a decline of 11.8% mainly due to net product sales decreased by 11.8%, which was caused by a significant decrease of motorcycle sales by -78.4% or equal to Baht -94.6 Million, partially compensated by an increase of home appliance sales of +7.8% or equal to Baht +32.2 Million,interest from installment sales decreased by 16.0% or equal to Baht 24.8 Million due to a decrease of installment accounts number from 230,957 accounts at the end of December 2007 to 211,777 accounts at the end of June 2008, which was caused by more accounts being closed and reverted. A decrease of motorcycle sales is resulting from the Company's strategy to re-focus on electrical home appliances, whereas the new number of Installment Accounts of home appliances have been increased month by month but it could not cover with the number of accounts closed due to the Company's Policy to clear the overdue accounts by discount and revert. Inventory reserve as of June 2008 equaling Baht 87.0 Million was lower than the reserve at end of December 2007 at Baht 162.0 Million due to on going plan to clear by selling the slow-moving stock of home appliances and used motorcycles of 3,173 units. In summary, the Net Profit for this quarter was Baht 12.9 million compared to a Net Loss of Baht 116.6 million for the second quarter of last year. The favorable difference of Baht 103.7 million can be analyzed as follows: Million Baht i. A decrease of products sale -62 ii. A decrease of interest from Installment -25 iii. An increase of other income 5 iv. A decrease of cost of goods sold 129 v. A decrease of variable expenses 15 vi. A decrease of semi-variable expenses 22 vii. A decrease of loss on products reprocess 26 viii. An increase of period expenses -16 viii. A decrease of interest expense 10 104 Balance Sheet Net installment and other receivables decreased to Baht 1,555 million at end of June 2008 from Baht 1,675 million at the end of December 2007 or a reduction of 7.2%, which was caused by more accounts being closed compared to new sales relating to phase out the motorcycle business. At 30 June 2008 the number of installment receivable accounts was 211,777 compared to 230,957 at the end of December 2007 or a reduction of 19,180 accounts. Net inventories at the end of June 2008 increased to Baht 262 million from Baht 231 million at the end of December 2007. This was mainly due to an increasing purchase stock of new sewing machines, and washing machines to serve sales in July and August 2008. Trade account payable at the end of June 2008 increased to Baht 189 million from Baht 72 million at the end of December 2007, which was caused by increasing inventory orders for increasing sales and the extension of credit term from major Suppliers. Interest bearing debt was decreased by Baht 161 million during the quarter due to continued positive operating cash flows resulting from ongoing collections of receivable accounts. Kindly be informed, Yours truly, Daniel Michel Philiponet Managing Director