TeleChoice s 2Q07 PBT improves by 9% over 1Q07

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1 TeleChoice s 2Q07 PBT improves by 9 over 1Q07 - GP margin maintained at 9, on 1H07 revenue of S$202M - Healthy cash position of S$23.2M - Targets to pay dividends of 2.5 cents per share for FY07 - Network Engineering Services revenue increased 55 to S$23.9M in 1H07 SINGAPORE FRIDAY, 3 August 2007 Main board-listed TeleChoice International Limited ( TeleChoice ), a regional provider of telecommunications solutions and services, today announced its financial results for the second quarter ( 2Q07 ) and six months ( 1H07 ) ended 30 June Group Financial Snapshot In S$ M 2Q07 1Q07 +/- 2Q07 2Q06 +/- 1H07 1H06 +/- Revenue Profit before tax ( PBT ) Net profit attributable after MI ( PATMI ) Earnings per share (diluted) based on weighted average number of ordinary shares (in cents) Cash balances As at 30 Jun 07 As at 31 Dec 06 Total equity for the Group Net asset value per share (in cents) Results Analysis The Group s 2Q07 performance improved over 1Q07, with PBT and net profit rising 8.9 and 5.5 to S$4.3M and S$3.2M, compared to S$4.0M and S$3.1M in 1Q07. This was attributable to stronger performance from Network Engineering Services. Group revenue of S$201.9M in 1H07 was a decline of 10.2 over 1H06, translating into Group PBT of S$8.3M in 1H07, a 20 decrease over 1H06. This was due to a drop in regional sales for Distribution Services, coupled with the intense competitive operating environment faced by Telecommunications Services. The Group s gross profit margin, nevertheless, maintained at 9.0 (similar for 1H06), while PBT margin stood at 4.1 for 1H07.

2 Mr Andrew Loh, President of TeleChoice International Limited, said, PBT for our Network Engineering Services strengthened in 2Q07, while PBT for Telecommunication Services was slightly affected by increase in development costs for new services. This resulted in an overall increase in Group PBT to S$4.3M in 2Q07. The Group continues to maintain healthy cash reserves of S$23.2M as at 30 June 2007, after FY06 dividend payout of S$5.6M. Looking at our improved performance over 1Q07, our carefully deliberated strategy of scaling down operations in certain markets and re-focusing efforts on more profitable value-added services is beginning to produce results. Our gross profit margin for 1H07, which remained at a constant 9.0 from 1H06 and registered a increase of 1.2 in 2Q07 against 1Q07, correlates with our focus and alignment of Distribution Services towards higher margin opportunities. Distribution Services operations in Singapore continued to be a key driver for our revenues and profits. Nevertheless, we have taken our first steps towards offering similar value-added services regionally with our joint venture agreement with Fortune Telecom Holdings Limited for the provision of logistics and fulfilment services for Nokia-branded handsets throughout the People s Republic of China ( PRC ). The telecommunications industry continues to challenge us with new technologies and price pressures. Internet protocol-based telephony services offer consumers a wide array of choices at highly competitive rates. Having anticipated such an operating environment, our Telecommunications Services division has sought to leverage on these trends and have been pushing towards the launch of new mobile internet-based services targeted to be launched later this year, to complement our existing suite of SunPage international and mobile call services and internet call services. Network Engineering Services turned in a sterling performance for 2Q07 with a 60 increase in revenue from projects in Singapore and Indonesia compared with the same period last year. Consistent with our overall approach, the strategy for Network Engineering Services is to continually push towards services and markets with higher margin opportunities. Financial Snapshot of Group s Performance by Activities Revenue In S$ M 2Q07 2Q06 +/- 1H07 1H06 +/- Distribution Services Telecommunications Services Network Engineering Services Profit before tax In S$ M 2Q07 2Q06 +/- 1H07 1H06 +/- Distribution Services Telecommunications Services Network Engineering Services Page 2 of 5

3 Distribution Services Distribution Services contributed S$166.2M in revenue and S$5.3M in PBT (accounting for 82 and 64 of total Group revenue and PBT respectively) in 1H07. The increase in Singapore Distribution Services revenue of S$9.6 M or 7 was offset by decrease in overseas operations. This resulted in an overall decrease in Distribution Service revenue by $28.3M or 15. PBT and PBT margins, however, improved to S$5.3M and 3.2 in 1H07 from S$5.2M and 2.7 respectively in 1H06. This is the result of the Group s strategy to scale down operations in certain markets and re-focusing efforts on more profitable value-added services. Telecommunications Services Telecommunications Services contributed S$11.8M in revenue and S$1.9M in PBT (accounting for 6 and 23 of total Group revenue and PBT respectively) in 1H07. Revenue decreased by S$3.2M or 21 on the back of lower IDD and mobile data usage, partially offset by contribution from Malaysia operation. PBT declined S$2.7M correspondingly from the lower revenue, as well as from start-up losses from Malaysian operations and development costs for new services. Network Engineering Services Network Engineering Services contributed S$23.9M in revenue and S$1.1M in PBT (accounting for 12 and 13 of total Group revenue and PBT respectively) in 1H07. Projects in Singapore and Indonesia contributed to an increase in revenue of S$8.5M or 55 from 1H06. There was a corresponding increase in PBT by S$0.5M or 83 driven largely by the projects in Indonesia. Outlook & Target Dividends for FY07 Group PBT in 1H07 declined by 20 over 1H06. The decline is primarily attributable to the intense competitive environment faced by the Group s Telecommunications Services business, which resulted in a decline in IDD revenue. Based on the current outlook and assuming there are no material adverse changes in operating conditions or any unforeseen circumstances:- a. the Group s 2H07 PBT is expected to improve over 1H07 PBT; and b. overall, the Group anticipates FY07 PBT to be lower, as compared to FY06. As announced in 1Q07 its 1Q07 results announcement dated 4 May 2007, the Company targets to pay dividends of 2.5 cents per share for FY07. Page 3 of 5

4 Distribution Services For Distribution Services, the focus remains on higher margin opportunities such as the provision of value-added services including integrated fulfilment and retail management in Singapore and the region. On 5 June 2007, TeleChoice announced the signing of a joint venture agreement with Fortune Telecom Holdings Limited to provide logistics and mobile fulfilment services for Nokiabranded handsets throughout the People s Republic of China. The joint venture with Fortune is consistent with TeleChoice s strategy of finding new markets for value-added, higher margin mobile fulfilment services. The Group sees tremendous potential in the PRC mobile fulfilment market. Based on statistics released by the PRC s Ministry of Information Industry, the country has a mobile phone subscriber penetration rate of 35.3 users per 100 persons and there is room for strong growth, given the low penetration rate, the current favourable economic climate and the recent award of 3G licences. In addition, after its successful tie-ups with StarHub and Nokia in rolling out concept mobile handset retail outlets at IMM and Ang Mo Kio Hub respectively, the Group will be opening more concept mobile handset retail outlets for Nokia, Sony Ericsson, and exploring suitable opportunities with other principals to further augment its retail operations this year. Telecommunications Services With the convergence of Voice and Data services, the Group will continue to offer new services based on Internet Protocol ( IP ) technology to meet consumer demand for such services. Aside from its collaboration earlier this year with Nokia, to make available SunPage Internet Call ( SIC ) service on its new Nseries and Eseries mobile devices, the Group is also poised to launch new products such as mobile pushmail, mobile headline news ( RSS ) and mobile Instant Messaging ( IM ) Services, a suite of mobile application services targeted at both consumers and mobile operators in Singapore and the region, in the coming months. In August 2007, the Group will launch a FastDial feature on its 2-step Budget Mobile Call ( BMC ) services to enhance the customer experience in using the service. Network Engineering Services The prospects for Network Engineering Services remains upbeat and the Group expects to continue to benefit from network upgrades in Singapore and the region as mobile operators enhance their current 2G networks and to roll out 3G/3.5G networks. In Singapore, the Group secured a major portion of a 3.5G rollout engineering services and in Indonesia, the Group won several projects in area of radio network planning, in building coverage and telecommunication infrastructure buildup. The Group has also enlarged its customer base with additional new customers. Going forward, the Group will continue to enhance its product and service offerings to prepare itself in the convergence space, and also seek customer and geographical diversifications to achieve more stable, recurring revenue streams.. Page 4 of 5

5 Mr Loh concluded, The paradigm of operating successfully in the telecommunications industry has shifted. With new technology continuously pushing the operational boundaries, it is vital that TeleChoice continues to remain relevant. We need to be constantly vigilant to new opportunities that present themselves either in the form of innovative services or unexplored markets. > ends This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, and governmental and public policy changes. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events. About TeleChoice International Limited (Regn No R) Incorporated in Singapore on 28 April 1998 and listed on the Main-Board of the Singapore Exchange Securities Trading Limited ( SGX-ST ) on 25 June 2004, TeleChoice International Limited ( TeleChoice") is a regional diversified provider and enabler of innovative communications. TeleChoice is a subsidiary of Singapore Technologies Telemedia Pte Ltd, a leading info-communications company with operations in Asia-Pacific, the Americas and Europe. DBS Bank Ltd was the manager, underwriter and placement agent for TeleChoice's initial public offering on the SGX-ST in June TeleChoice offers a comprehensive suite of services and solutions for the telecommunications industry: Distribution Services: distribution, retail and fulfillment services relating to mobile handsets, accessories and other telecommunications equipment. Telecommunications Services: value-added Voice, Video and Data services, such as SunPage idd, SunPage Budget MobileCall, SunPage Budget Roaming, SunPage Budget CallHome, SunPage Internet Call, PushMail, Location Tracking and Mobile Data Network Services. Network Engineering Services: network planning, project and resource management, network implementation & optimisation, managed outsourcing services. Headquartered in Singapore, TeleChoice has operations around the Asia-Pacific region, including Indonesia, Malaysia and Thailand. In recognition of its achievement for continuous and sustained corporate growth, TeleChoice was ranked amongst the Fastest Growing 50 (2004). The Fastest Growing 50 award is an accolade reserved for Singapore companies with the highest three-year compounded annual growth rates. TeleChoice also achieved the Singapore International 100 Ranking (2005), being one of Singapore's top 100 companies by highest overseas revenue, and was also ranked among the top 30 (revenue) amongst the Singapore 1000 and SME 500 Rankings (2006). The Singapore 1000 ranking recognises Singapore s largest corporations by annual sales/turnover performance and the Singapore SME 500 ranks the most successful small and medium enterprises. TeleChoice s major customers and principals include StarHub Ltd and PT Indosat Tbk; and Motorola, Nokia, Sony Ericsson and HuaWei respectively. For more information, please visit our website at For media/investor enquiries, please contact: Lim Siew Yin, 29 Communications Tel: , Fax : , siewyin@29communications.com.sg Angelina Pereira, 29 Communications Tel: , Fax : , angiep@29communications.com.sg Page 5 of 5