Press Release

Padaeng announces Q2 net profit of 45.94 million Baht

In its second quarter 2004 report to the Stock Exchange of Thailand, Padaeng Industry Public Company Limited announced a consolidated net profit of 45.94 million Baht, or earnings per share of 0.20 Baht, an increase from the same period last year, which registered a net loss of 38.71 million Baht. For the first six months of this year, the company recorded a net profit of 130.34 million Baht, with earnings per share of 0.58 Baht, compared to a loss of 5.95 million Baht during the first half of last year.

Operating performance for Q2 showed income from sales totaling 1,569.63 million Baht, up 38% from the same period last year, owing to increase in sales volume and a rise world zinc price of 17% and 33% year on year respectively. Average world zinc price stood at USD 1,027 per metric ton. Nevertheless, major operating expenses including imported raw material, electricity, fuel and freight costs, continued to rise from the first quarter.

For the first half of 2004 the company earned a net profit of 130.34 million Baht, as sales of zinc metal grew 6.3% over the previous year. Domestic sales increased to 87% of total sales, compared to 80% last year, due to growth in the galvanizing industry, automotive parts industry and overall economic expansion in Thailand. Export sales account for the remaining 13% of sales, with primary destination being ASEAN member countries. In an effort to reduce costs associated with imported raw materials, the company utilized a greater amount of zinc silicate ore processed through flotation plant at Mae Sot mine since the beginning of the year. As a result, the proportion of zinc silicate ore used in the smelting process has increased comparing to the same period last year.

As for the remainder of the year, it is expected that the world zinc price will hold steady at its current average. In addition, the company will continue to increase utilization of domestic raw material.

Established on April 10, 1981, Padaeng Industry Public Company Limited is the sole zinc mining and smelting operator in Southeast Asia, with an annual zinc metal production capacity of 110,000 metric tons.