Press Release

Padaeng reports net profits of 335.30 million Baht for 2001

Padaeng Industry Public Company Limited, in its financial statements submitted to the Stock Exchange of Thailand, announced that its equity method year-end 2001 revenues totaled 5,203.26 million Baht, a slight decline of 3.64 percent from the year 2000. The company’s net profit also saw a sharp decline, down 42.69 percent to 185.50 million Baht from 323.66 million Baht in the previous year. Earnings per share fell to 0.82 Baht compared to the prior year’s 1.95 Baht. The company attributes this drop in profit to the depressed LME zinc price, which fell to a 15-year low average price of $US 886 per metric tons, a decrease of 21 percent or $US 242 per metric tons over the year 2000. In addition, the company has reviewed its fixed assets for eventual impairment, and has decide to write-off for about 100 million Baht of fixed assets, more particularly the machinery of the Cadmium plant as the company does not see the possibility to market the pure cadmium it produces during the next few years.

Figures from the company’s consolidated financial statements, show net profits of 335.30 million Baht, compared to 211 million Baht in 2000, due to a gain of 150 million Baht realized from deconsolidation of a subsidiary company.

During 2001, sales of zinc metal grew by 5 percent to a total of 105,696 metric tons, mainly due to the sale of specialty products as diecast alloys and as the newly produced continuous galvanizing grade alloys (CGG), 30% higher than year 2000. The primary sale was focused on the domestic market that accounted for 75 percent of total sales compared to 72 percent in 2000.

For the year 2002, in view of the uncertain economic conditions, the company will actively continue to develop its markets of specialty products, more particularly in the domestic market, as well as expand its range of those products.

Furthermore, since the company still has a retained loss, pursuant to Section 115 of the Public Limited Company Act of B.E.2535, no dividend payment for 2001 would be considered. Nevertheless, the Board of Directors will propose to the Shareholders Meeting to offset the accumulated retained losses with the legal reserve and the reserve from share premium, reaffirming its confidence in the future of the company, not withstanding an expected difficult 2002 year, with low zinc prices and continuing excess of world production.

Established on April 10, 1981, Padaeng Industry Public Company Limited is Southeast Asia’s sole zinc smelter with an annual production capacity of 100,000 metric tons.