Yantai Raffles Reports 2006 Turnaround in Profitability

Yantai Raffles Shipyard Limited ('YRS' or the 'Group') on Wednesday announced its unaudited results for the Financial Year ended 31 December 2006.

The Group recorded total revenue of S$272 (US$172) million with net profit attributable to equity holders of S$14.87 (US$9.41) million. The Group's earnings per share rose to S$0.07 (compared to a loss $0.52 in 2005) with the gearing ratio improving to 0.3 as at 31 December 2006, markedly lower than its comparative of 1.3 in 2005. The year ended 2006 marks a significant turnaround for the Group as it transforms from a loss to a profit making business.

As planned, the Group has invested capital raised in Oslo in 2006 to further develop and upgrade the yard and its infrastructure, and is seeing its capacity and efficiency improve commensurately. It is important to note that as most of the new projects secured in 2006 are still at their initial design and planning stages, they have yet to contribute significantly to Group revenue. Barring unforeseeable circumstances, most contracts partially completed and recognized on a percentage of completion basis will contribute more meaningfully to the financial year ending 2007 and beyond. With more contracts underway, YRS expects its revenue and profit in 2007 to be substantially higher than recorded in 2006.

Commenting on the results, Mr Brian Chang, Executive Chairman said, "We are pleased to be able to achieve this financial breakthrough. As more new buildings come on-stream and are progressively completed, they will provide the Group with a steady stream of future earnings in the year 2007 and beyond. Even though the oil and gas industry is currently extremely robust, we believe our business is sustainable in the long term. The completion of our 20,000 metric tonnes gantry crane in July 2007 will substantially raise our productivity and production capacity. This will enable YRS to take on even more new orders. As we continue to gain momentum and enhance our capabilities and areas of expertise, we will thus realize our ambition to be the Yard of Choice."

Listed on the Oslo OTC Stock Exchange in Norway with its headquarters in Singapore, Yantai Raffles Shipyard ("YRS") specializes in the construction of various marine and offshore projects that include jack-up drilling rigs, semi-submersible drilling rigs, FPSOs, platform supply vessels, luxury yachts and other units. The 72-hectare shipyard boasts state-of-the-art building facilities, including a large gantry crane with lifting capacity of 20,000 metric tons due for completion in mid-2007, and employs the latest technologies to achieve operational efficiencies and lower costs.