Thailand Operating Results for the First Quarter 2007

Date : May 15th, 2007 To :Managing Director The Stock Exchange of Thailand Bangkok Re :Singer Thailand Operating Results for the First Quarter 2007 During the First Quarter of 2007, the major highlights were : - Positive Operating Cash Flow of Baht 365.8 million compared with the same period of last year when Baht 305.5 million were generated - The Company has also sold certain unprofitable shops which have generated cash of Baht 10.5 million - Repayment of loan for an amount of Baht 384 million The Company continued with its programme to reduce the number of used motorcycles in stock and from a peak of almost 37,000 units in August 2006, the stock was brought down to 16,540 units in March 2007. The motorcycle inventory will reduce to normal level during 2007. In order to improve its operating results, the Company has increased its down-payments for both home appliances and motorcycles sold on hire-purchase taking advantage of a favorable competitive environment. In order to improve its operating efficiency, the Company has converted a total of 63 shops from the traditional Singer business model where the sales and the collections were under the same person, into a New Model where the functions of sales and the function of collections are split, the Company expects to achieve higher sales and higher collections. Following the Thai Accounting Standard No. 44 (TAS No.44)"consolidated financial statements and accounting for investments in subsidiaries" be revised on 11th October, 2006, the Company has changed the method of booking consolidated accounts from the equity method to the cost method. This change has no significant impact on the Income Statement due to the very small profits from the Company's subsidiaries. The Company has also strengthened its management team by recruiting Khun Boonyong Tansakul as its Sales and Marketing Director. Khun Boonyong brings to the position years of experience in executive positions.Another key executive recruitment relates to the position of Controller and Finance Director and, to fill the position, the Company asked Khun Sophon Pholvilai, who used to work for the Company for over twenty years in the same position, to re-join. Comments to Key Financial Numbers Income Statement The operating performance for the First Quarter 2007 continued to be impacted by the actions taken to repossess motorcycles from poor hire-purchase loans granted during the years 2004 and 2005 and large write-downs in the value of the used motorcycle inventory. Relating to motorcycles, an inventory provision of Baht 20 million was reserved as well as a provision of Baht 20 million for the retirement fund, also reflecting a more conservative bad debt provision already implemented adequate reserves were provided.Therefore, compared to the First Quarter 2006, a total impact of all these actions accounted for Baht 110 million representing 56% of the net loss of the Company for the First Quarter amounting to Baht 196 million. The revenues decreased from Baht 848 million for the First Quarter 2006 down to Baht 564 million or a decline of 33% mainly due to the lower sales of motorcycles as the Company has been implementing its strategy to re-focus on home appliances. In summary the net loss for the First Quarter 2007 was Baht 196 million compared to a net loss of Baht 162 million for the same period prior year. The difference of Baht 34 million can be analyzed as follows : - Cost of goods sold increased by 0.9% due to higher provision in inventory for new motorcycles but old models amounting to Baht 20 million - Selling and Administrative Expenses increased by Baht 20 million with an additional provision for retirement fund in order to adjust the account according to the Valuations Report issued by Watson Wyatt as of December 2005 - Interest Expenses decreased by about Baht 5 million due to a significant decrease of loan by Baht 384 million during the quarter, somewhat offset by an increase in interest rate Balance Sheet Net installment and other receivables decreased to Baht 2,405 million at the end of March 2007 from Baht 2,770 million at the end of December 2006 due to a large number of motorcycles accounts being repossessed and reverted as well as a significant decrease of new motorcycles accounts by 83% compared with the same period of last year. At the end of March 2007, the number of installment receivable accounts was 278,656 accounts compared to 296,063 accounts at the end of December 2006. Net inventories decreased from Baht 547 million to Baht 425 million due to clearance of used motorcycles by 4,784 units and more reserve of new motorcycles but old model. The land had been appraised value by an independent appraiser. The valuation had been appraised from Baht 91.14 million as at December 31, 2006 to Baht 175.56 million as at March 31, 2007 which recorded as "Surplus on Revaluation Assets" in shareholder's equity. Short-term and long-term loans decreased by Baht 384 million with loan repayment but provision for retirement cost increased by Baht 24 million to be in line with the Valuations Report. Kindly be informed. Yours truly, Daniel Philiponet Managing Director