GP Batteries achieves record turnover

Commenting on GP Batteries’ prospects, Andrew Ng, Chairman and Chief Executive of GP Batteries, said, The general business outlook continues to be steady. There are signs that commodity prices are gradually stabilizing. The threat of substantial raw material price increases, except for cobalt, appears to have passed.

GP Batteries Group intends to aggressively expand its production capacity of rechargeable batteries. We will continue to promote the GP brand aggressively, particularly in Asia and Eastern Europe.” Ng is Vice Chairman of Gold Peak.

Business Review of Singapore-listed GP Batteries Fourth quarter ended March 31, 2004 Sales in Asia, especially Hong Kong and China, increased by about 36% while those for Europe and North and South America increased by about 35% and 22% respectively over the corresponding quarter.

Gross profit margin for the fourth quarter of 29.7% was lower than the corresponding period last year of 32.9% due to the dramatic increase in the price of raw materials for rechargeable batteries especially nickel and cobalt. However, this was cushioned by the increase in sales and a more profitable product mix. Overall, the gross profit increased by 20.2% to S$59.1 million.

The higher administrative expenses included a one-off legal fee incurred by GP Batteries in defending itself against the International Trade Commission action initiated by Energizer Holdings, Inc and Eveready Battery Company, Inc on patent infringement in the US.

Despite the interruption caused by the SARS outbreak, turnover of Lithium -ion batteries grew by over 40% in the past year, reflecting the growing acceptance of GP batteries by the market.

Nickel Metal Hydride rechargeable batteries registered a healthy growth for the year fuelled by strong demand for high-drain portable electronic devices. GP Batteries is now one of the top three Nickel Metal Hydride battery manufacturers in the world.

It is increasing production capacity to meet growing demand. To maintain its leading market position, GP Batteries has successfully developed the 2500mAh AA and 950mAh AAA Nickel Metal Hydride consumer rechargeable batteries, which are of the highest capacity for their sizes in the world.

Distribution expenses incurred for the year were higher as compared to the previous year as GP Batteries invested aggressively in advertising and promotional activities, especially in China, to further strengthen its market position. According to a survey conducted by AC Nielson, GP brand was ranked first in the market share growth of alkaline batteries in Hong Kong for the second consecutive year.

Income tax expense was in line with the increase in profit. The effective tax rate for the year was about 15.8% of the total reported profit. Ref: GPBI2004-P09HK Page 3 of 3 GP Batteries announces 2003/04 final results The increase in minority interest was mainly related to Zhongyin Ningbo Battery Co. Ltd, a 75%-owned subsidiary acquired by GP Batteries in November 2002.

GP Batteries was notified on January 26, 2004 that its application for the extension of International Headquarters Award by the Economic Development Board of Singapore had been approved. The IHQ status shall be for a 5-year period.

On January 30, 2004, GP Batteries’ patent dispute with Energizer was resolved through a cross licensing agreement which allows GP Batteries to operate freely throughout the world. In January 2004, TCL Corporation in which GP Batteries holds 47 million shares as long-term investments obtained listing on the Shenzhen Stock Exchange.

In April 2004, GP Batteries entered into an agreement with Danionics A/S of Denmark to set up a joint venture company for the production of Lithium Polymer batteries in China. Danionics A/S is a public company listed on the stock exchange in Copenhagen, which has been engaged in the commercialization of Lithium Polymer batteries since 1994. Products from this joint venture will complement the range of batteries manufactured by GP Batteries.

In May 2004, GP Batteries acquired a 50% interest in Aim High Limited, a company which has been marketing and distributing primary and rechargeable cylindrical batteries in the consumer market in Eastern Europe, particularly Russia, since 1995. This acquisition consolidates GP Batteries Group’s marketing channels and distribution network in Eastern Europe and Russia. For more information, see discount camcorder batteries.

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