GP Batteries announces its unaudited third quarter results ended 31 December 2006. The revenue was S$201.6 million (approx. US$131.4 million), a decrease of 13.7% over the corresponding period last year. The profit attributable to shareholders was S$3.0 million (aprrox. US$1.95 million), a decrease of 9%. Turnover decreased mainly due to the weak demand for Nickel Metal Hydride and Lithium Ion rechargeable batteries. The strengthening of Singapore dollars against United States dollars also attributed to the decrease in turnover as most of the sales were denominated in US$. Gross profit margin decreased due to the surge in raw material prices especially Nickel, Zinc and the appreciation of Renminbi. Distribution expenses for the three months ended 31 December 2006 increased 12.9% as advertising and promotion activities were stepped up to strengthen the Group’s market position. The Group had entered into commodity swap contracts to hedge against the rocketing raw material prices. Fair value gain of such contracts outstanding as at 31 December 2006 of S$6.5 million had been recognised in the profit and loss account under other operating income.

The sale of Sanyo Energy Tottori’s 35.2% equity interest in NGPSE to the Group under the restructuring agreement had been completed. NGPSE is now a 90% owned subsidiary of the Group. The Group recognised an exceptional loss of S$7.5 million being the share of loss due to the fire incident and exceptional gain of S$6.7 million being negative goodwill arising from the restructuring. NGPSE expects to resume operation at the beginning of fiscal year 2007/08. The Group’s electric vehicle (“EV”) battery plant continues to produce NiMH battery packs for use in Vectrix Corporation’s (Vectrix) electric-powered motorcycles. The production of the EV batteries will shift to the joint venture with Vectrix when it is ready at the beginning of fiscal year.