Listed Companies' Announcement



Singapore, 12 August 2004 – Federal International (2000) Ltd ("Federal" or "the Group"), a value-added distributor and provider of turnkey EPC (engineering, procurement & construction) solutions for the energy & infrastructure industries, announced a 72.7% increase in profit after tax and minority interests for the first half of FY2004 to S$1.9 million, up from S$1.1 million in the same period last year. The rise comes on the back of a 55.8% increase in Group turnover to S$67.6 million from S$43.4 million in the same period last year.

The improvement in Federal's net profit is mainly attributable to the increase in turnover, and a new source of income from charter activities in the current financial period.

In particular, the Group's performance also reflected its efforts at scaling up the value chain and expanding its global presence, coupled with the global economic recovery, sustained oil and gas demand in Asia and higher volume of energy and production activities in the region. The Group's flowline control segment contributed significantly to the increase in revenue.

Group EPS for first half of 2004 was 1.08 cents compared with 0.62 cents per share for the same period last year. Commenting on the results, Executive Chairman and CEO, Mr K. K. Koh said, "We are happy that our efforts in expanding our marketing reach through strategic alliances are bearing fruit. Our strong turnover for the first half of the year is most encouraging for the Group and I believe our flowline control segment will continue to enjoy growth with rising steel prices and increasing oil and gas energy and production activities.

China, which has been on the rapid economic growth track, will continue to drive growth in the region. According to China's Energy Research Institute, China's oil consumption expected to rise 7.7 % in 2004. We believe we are well positioned to benefit from the continued healthy growth in the industry through our network, including our Beijing representative office, Federal International (Shanghai) Co. Ltd., and Tiong Woon China Consortium Pte Ltd.

Indonesia will also continue to be of significant prospects to us. In January this year, the Group entered into a joint venture with PT Jambi Info Trade Centre, which we believe would give us a leading edge in terms of securing potential EPC contracts since Jambi, with it huge unexplored reserves of natural gas and oil, has become a magnet for energy sector players. To further expand our potential customer base in Indonesia, we formed Federal JWR Energy Pte Ltd in partnership with PT Jaya Wijaya Raya in March this year to widen our Group's scope of supply and services to our customers, enabling us to serve as a one stop integrated service provider. We are currently executing our first contract awarded by TAC-Pertamina-PT Semberani Persada Oil (Semco) worth US$21.6 million under this joint venture. Under the contract, we will supply production facilities under rental agreement and provide maintenance services for Semberah Field Development project for a period of 5 years with an option for an extension of further 3 years. We expect more similar projects in the near future.

The Group's subsidiary company, HP&T Products, Inc., in Houston has begun to contribute favourably towards the Group's bottom-line. In addition, the Group's associated company, KVC Co., Ltd, in Japan has received orders worth approximately S$6.0 million in the first half of 2004. The orders from major companies such as JGC, Toyo Engineering Corporation, Hitachi Zosen, Toshiba, Nippon Steel and Kobe Steel in Japan, Daelim Industrial Co. Ltd. in Korea, and the UAE Power Plant will be fulfilled within this current financial year. The Group expects KVC Co., Ltd, to turnaround this year and contribute to the Group's full-year profit.

With increased business activities, the positive outlook of the global economy as well as the oil and gas industry, the Group expects to continue its robust performance in the second half and its full year performance to be positive.

About Federal International (2000) Ltd

Listed on the Mainboard of the Singapore Exchange, Federal International (2000) Ltd ("Federal" or "the Group") is a value-added distributor and provider of turnkey EPC (engineering, procurement & construction) solutions for the energy & infrastructure industries. Currently the group is principally involved in the distribution of flowline control products (e.g. valves, structural steel, steel flanges/connectors and pipe fittings) to the oil and gas, power, chemical and pharmaceutical industries.

Federal is also involved in upstream activities such as research & development and manufacturing of valves and valve-related equipment through its subsidiary – Houston-based HP & T Products, Inc. and KVC Co. Ltd (Japan) and KVC (UK) Ltd, in which it has acquired strategic stakes. By moving upstream into the design and manufacture of specialized values and related products, Federal aims to be an integrated service provider and procurement specialist in the energy and infrastructure industries offering a complete one-stop service.

Issued on behalf of Federal (International) 2000 Ltd

For more information, please contact:

Ms Tham Moon Yee / Ms Geraldine Goh

Stratagem Consultants Pte Ltd

Tel : 65 6227 0502
Fax : 65 6227 5663
Email : /

Submitted by Koh Kian Kiong, Director on 12/08/2004 to the SGX