JANUARY / FEBRUARY 2009 • VOL 5 • ISSUE 1 MICA (P ...investors.hyflux.com/misc/newsletter_2009a.pdfHyflux posts record quarterly revenue of S$177.4m in 3Q08 Hyflux reported a

JANUARY / FEBRUARY 2009 • VOL 5 • ISSUE 1 MICA (P) 189/10/2008

Hyflux shares growth story at Venture Kansai 2008Hyflux Group CEO, President and Managing Director Ms Olivia Lum was invited to speak at the Venture Kansai 2008 held in Japan from 5 - 6 November 2008 at the Osaka International Conference Centre.

Venture Kansai is an annual business event co-sponsored by Nikkei, the City of Osaka and the Asian Productivity Organisation (APO), which sees prominent entrepreneurs and academic figures discuss the promotion of venture companies.

Ms Lum was one of the panel members in a symposium on Trends in Asian Businesses, which was attended by APO delegations and CEOs in Osaka. During the session, Ms Lum spoke on the growth of Hyflux and highlighted the founding principles of the company, as well as Hyflux’s focus on water recycling and desalination projects.

The Panel Discussion which followed drew enthusiastic response from the audience, and saw Ms Lum elaborating further on the many facets of growing a venture company - from creating sustainable value, attracting the right people to ensuring corporate social responsibility.

Venture Kansai 2008 was well covered by the local media in Japan, and Hyflux’s presence at the event was also mentioned in Japan’s English publication, The Nikkei Weekly.

Construction of world’s largest RO desalination plantHyflux has begun work on the world’s largest reverse

osmosis (RO) desalination plant in Algeria. The on-site ground breaking ceremony of the plant was

held on 16 December 2008 in Magtaa, Algeria.

Hyflux Group CEO, President and Managing DirectorMs Olivia Lum attended the ceremony, which was presided by His Excellency Abdelaziz Bouteflika, President of Algeria.

“Winning the Project under intense competition in April 2008, shortly after clinching the 200,000 m³/day Tlemcen Project in October 2006, is testament to Hyflux’s expertise and experience in the water treatment industry,” said Ms Lum. “We are particularly honoured by the enormous support given to the Project by the Algerian government,

with the President and his ministerial delegation presiding at the groundbreaking ceremony.”

The 500,000 m³/day plant, located in Magtaa, Oran, Western Algeria, will utilise Hyflux’s award-winning proprietary Kristal™ ultrafiltration membranes. Construction of the

financial close.

In addition, the Project Company, Tahlyat Myah Magtaa SpA, has executed the financing agreement with the Banque Nationale Algeria and is now in the process of satisfying various conditions precedent under the financing agreement. The Project Company expects to achieve financial close by 1Q 2009.

Ms Olivia Lum answering questions during the Panel Discussion.

Colin Chu

plant is expected to be completed in 28 months’ from

Hyflux posts record quarterly revenue of S$177.4m in 3Q08Hyflux reported a record revenue of S$177.4m for our 3Q08 on the back of strong municipal sales in China and Algeria. The Group also reported a net profit after tax of S$18.5m. Both quarterly revenue and profit after tax increased by more than two times from the same quarter a year ago.

Johan Lim

HWT posts revenue of S$13.9mHyflux Water Trust (HWT) achieved a revenue of S$13.9m with a profit after tax of S$3.2m in 3Q08.

Distribution per unit for the nine months ending 30 September 08, after waiver of distributions in respect of Sponsor units, is 3.50 Singapore cents, which is 72% of the full year forecast of 4.88 Singapore cents.

On HWT’s results, CEO of the Trustee-Manager, Mr Saud Siddique said, “We are pleased that HWT has continued to report profit growth under the current difficult market conditions. This underscores the strong fundamentals of our business model and we believe that the outlook in the water industry in the People’s Republic of China remains attractive.”

HWT shareholders pass resolution at EGMHyflux Water Trust (HWT) held an Extraordinary General Meeting (EGM) on 16 December 2008 at the Hyflux Auditorium. Unit-holders of HWT duly passed the ordinary resolution set out in the Notice of EGM dated 29

November 2008, to acquire from Hyflux five water-related infrastructure assets (known as Right Of First Offer And Refusal or ROFOAR Plants).

Municipal sector sales accounted for 87% of the revenue; a six-time growth compared to the previous corresponding quarter (Table 1). Sales in China contributed to two thirds of the revenue pie while MENA accounted for slightly less than a third (Table 2).

“Our portfolio of water infrastructure programmes in China and Algeria provides stability and visibility of earnings for Hyflux in spite of adverse market conditions,” said Ms Olivia Lum, Hyflux Group CEO, President and Managing Director. “With the Group’s two desalination plants in Algeria, Hyflux is the largest single provider of membrane-based desalinated water.”

In China, Hyflux has 44 plants ranging from wastewater treatment, water recycling to seawater desalination, with primary focus in the Jiangsu, Tianjin, Hebei and Shandong provinces. In Algeria, construction at the Tlemcen desalination plant is halfway towards completion and Hyflux has commenced contruction of the Magtaa desalination plant.

On 31 October 2008, Hyflux announced that the Company had entered into four sale and purchase agreements with Hyflux Water Trust Management Pte Ltd (acting as Trustee-Manager of Hyflux Water Trust). The total consideration

for the sale of these assets is S$88m. Hyflux’s subsidiaries will continue to provide operation & maintenance and management services for the plants.

Sector 3Q 2007 3Q 2008

Municipal S$24.6m S$154.3m

Industrial S$39.2m S$ 22.4m

Others S$ 0.3m S$ 0.7m

Total S$64.1m S$177.4m

Table 1: Hyflux Revenue by sector: 3Q07 & 3Q08

Table 2: Hyflux: 3Q08 Revenue by Country

Country Revenue

China S$119.5m

MENA S$ 54.4m

Singapore/Others S$ 3.5m

Total S$177.4m

Moving forward, the industry’s fundamentals remain strong and the desalination market continues to be robust.

Visit by Jiangsu Party Secretary Liang Baohua to Hyflux

(From left) Mdm Zhang Xiaokang; Mr Liang Baohua and Mr Zhang Weiguo visited the Hyflux headquarters.

Jiangsu Party Secretary Mr Liang Baohua was in town to attend the 2nd Jiangsu-Singapore Cooperation Council meeting and took time out of his busy schedule to visit Hyflux.

Together with Jiangsu Vice Governor Mr Zhang Weiguo and People’s Republic of China’s Ambassador to Singapore Mdm Zhang Xiaokang, Secretary Liang met Hyflux Group CEO, President and Managing Director Ms Olivia Lum and Group Deputy CEO and CFO Mr Sam Ong on 29 November 2008 at the Hyflux headquarters.

During the meeting, Secretary Liang highlighted the importance of having affordable and sustainable water supply in the Jiangsu province and how Hyflux, as a water company specialising in membranes, could play an important role in the water industry in Jiangsu. He also invited Hyflux to help improve Jiangsu’s rural water infrastructure.

The delegation also found out more about Hyflux’s China project updates as well as the company’s R&D initiatives and programmes through a presentation during the meeting.

MOU Signing between Linyi Government and HyfluxAt the 13th Singapore-Shandong Business Council (SSBC) meeting held in Singapore on 20 November 2008, Hyflux signed a Memorandum of Understanding (MOU) with China’s Linyi Government to collaborate in municipal water projects.

The MOU was signed between Hyflux MD and Head of China Structured Projects Mr Peter Wu, and Vice Mayor of Linyi Municipal Government Mr Lin Xiangyu. The Hyflux-Linyi MOU was one of the three MOUs and agreements signed at the Council meeting. The ceremony was witnessed by Vice Governor of Shandong Province Mr Cai Li Min and Minister of State for Trade and Industry Mr Lee Yi Shyan.

On the same day, Vice Mayor Lin and his delegates also visited the SingSpring Desalination Plant to learn more about the plant’s operations.

Felicia Yoo

Felicia Yoo

(From left) Mr Sam Ong and Ms Olivia Lum sharing with the delegates how Hyflux membrane technologies can provide water solutions to places like Jiangsu.

(Front row, from right) A firm handshake between Mr Peter Wu, and Mr Lin Xiangyu to seal the MOU agreement. The ceremony was witnessed by (back row, second and third from left ) Mr Cai Li Min and Mr Lee Yi Shyan.

Honourable John Pandazopoulos, Chair of Australia’s Environment and Natural Resources Committee, and two committee members were hosted by SVP of Group Communications & Relations Mr Freddy Soon at the SingSpring Desalination Plant on 28 November 2008.

The delegates were interested to learn more about Singapore’s water management as well as Hyflux’s capabilities in desalination. Mr Soon shared with the delegates the benefits of using a two-pass reverse osmosis process and how geographical differences can influence the construction of desalination plants.

Visit by Australia’s Environment and Natural Resources CommitteeFelicia Yoo

Hyflux Water Trust (HWT) CEO, Mr Saud Siddique, was invited to give a presentation on HWT at the Macquarie Asia Infrastructure Conference held in Macau, from 8 – 9 December 2008. The event covered topics on infrastructure sectors such as power, utilities and transport, and attracted regional and international industry players.

Mr Siddique spoke on the opportunities in Asia’s water industry and introduced delegates to HWT – the first pure play global water business trust to be listed in Asia. Other presenters at the Conference included Korea’s former Deputy Prime Minister and Minister for Finance and the Economy, Dr Okyu Kwon, and Japan’s former Minister of State for Economic and Fiscal Policy, Prof Heizo Takenaka.

HWT CEO speaks at regional conference in MacauLee Shou Yin

Hyflux Malaysia Sdn Bhd participated in the National Seminar on Palm Oil Milling, Refining Technology, Quality and Environment 2008, held at Kota Kinabalu, Sabah, Malaysia from 15 - 16 December 2008.

During the two-day seminar and exhibition, Hyflux showcased its innovative membrane technology in crude palm oil clarification to delegates from the regional palm oil industry. VP of Process Technology Dr Li Dong Fei also gave a presentation on Hyflux’s membrane capabilities.

“The biggest challenges facing palm oil mills today are the efficiency of the oil extraction rate (OER), product quality and environmental issues,” said Malaysia’s Minister of Plantation Industries and Commodities, Datuk Peter Chin Fah Kui.

His sentiments were echoed by visitors at the Hyflux booth, who were keen to find out more about the economic and environmental benefits of Hyflux’s proprietary technology.

To address the challenges facing the palm oil industry, Hyflux is developing solutions to potentially improve the crude palm oil quality, provide higher OER and shorten the processing time. The system needs to minimise the effluent (wastewater) discharge and reduce operating and maintenance costs.

Hyflux participates in regional palm oil seminarPeng Yi Jin

(First from right) Mr Freddy Soon with the visitors

Mr Saud Siddique at the Macquarie Asia Infrastructure Conference held in Macau.

(Second from left) GM and Head of Specialised Industrial Products Mr Yeow Kok Kon introducing the Hyflux membrane technology to visitors at the Hyflux booth.

Visitors at the Hyflux booth.

Bring Your Child To Work Forty-eight children attended Hyflux’s inaugural “Bring Your Child to Work” Day held on 28 November 2008. The special event was held to promote family life and to show appreciation to staff for their hard work and dedication.

The morning began with a surprise for the little ones – colourful goodie bags filled with

Diane Loh

Glimmer, Glitter and Glamour at Hyflux Christmas CelebrationsMore than 200 Hyflux staff attended the Hyflux Christmas Celebrations held at the executive canteen on 19 December 2008. The canteen was transformed into a sparkling Christmas wonderland – to coincide with the theme “Glimmer… Glitter… Glamour”.

Hyflux Group CEO, President and Managing Director Ms Olivia Lum opened the party with a short address. This was followed by a group carolling session, which saw Hyflux staff singing to familiar festive tunes such as “Jingle Bells”, “Deck the Halls” and “Joy to the World”.

No party would be complete without games, and the Hyflux Christmas Celebrations was no exception. As participants took turns to portray Christmas items, such as “reindeer”, “log cake” and “turkey” in a game of charades - to hilarious effects - the audience laughed and applauded merrily.

After dinner, everyone sat down for the highlight of the evening - the announcement of the results of the “Deck the Office” Christmas decoration competition. Judges included Senior Advisor Mr Foo Hee Kiang, Director of Accounting Ms Joyce Ong, and VP of Technology Development Dr Tan Yi.

The Purchasing & Logistics departments clinched the First Prize, while the Commercial & Contract department took home the Second Prize. This year, due to the very keen competition, two Third Prizes were given out – one to the IT department, and another to the Finance department.

Lee Shou Yin

Bravo! We love the magic show! Magician Patrick Wan in action.

(Front row from left) Ms Olivia Lum, Group Executive VP Mr Fong Chun Hoe, and Mr Foo Hee Kiang.

The fun-filled game of charades brought much fun and laughter.

Santa Claus and Santa Rina dropped by.

gifts. Parents and children then gathered at the auditorium to enjoy a movie screening of the animation film Wall-E and an entertaining magic show, before adjourning to the executive canteen to enjoy lunch at Peppermint Café and an educational Speech & Drama demonstration.

The children also had an opportunity to see their parents at work, as mummies and daddies brought them around the workplace to introduce the little ones to fellow colleagues. One thing was for sure, not only did the children enjoy themselves, they have also brought much joy and laughter to the Hyflux office.

Hyflux participated in the 4th Algeria Energy Week held from 15 - 19 November 2008 in Algiers, Algeria. The event brought together the country’s industry leaders and their international partners at a time when the energy and mining sectors are striving to achieve reliable governance and undergoing several reforms.

The event also provided an ideal platform to showcase Hyflux’s water and energy technologies, and reinforced our commitment in the MENA region.

The Hyflux team comprised of AVP of CEO Office Mr Willy Yeo and Eflux Senior Manager Mr Tan Chung Kim. Mr Willy Yeo was also one of the conference panelists, who shared Hyflux’s projects and strategies with the audience and highlighted the company’s strong expertise in membrane technologies. Other panelists included senior representatives from our partners Sonatrach and the Algerian Energy Company.

Hyflux participates in Algeria’s leading conference and exhibitionClaire Ng

(Left) Mr Tan Chung Kim with a delegate at Hyflux’s booth.

(Centre) Mr Willy Yeo surrounded by visitors.

Project Updates

November 2008

China - Tianjin Dagang Desalination Plant Algeria - Tlemcen Desalination Plant

November 2008

December 2008 December 2008

2008 11 29

( ) ( ) ( )

2008 11 2013

( )

2008 12 16 (Algeria)

(Oran) (Magtaa)

: 2006 10(Tlemcen) 202008 4

50Kristal™

(ultrafiltration membranes)

Tahlyat Myah Magtaa SpA

2009

EDITORIAL TEAMEditor-In-Chief Freddy Soon

EditorsCatherine Hu Lee Shou Yin

WritersClaire NgFelicia YooJohan Lim

Publication by Hyflux Ltd

Hyflux Building202 Kallang BahruSingapore 339339

Tel: (65) 6214 0777Fax: (65) 6214 1211

[email protected]

Websitewww.hyflux.com

Registration No.200002722Z

ContributorsColin ChuDiane LohJenson GohPeng Yi Jin

Venture Kansai

Venture Kansai 200811 5–6

Venture Kansai 2008 (Asian

Productivity Organisation)

Venture Kansai 2008

1.7

1 800

87 (Tlemcen)(Magtaa)

LayoutCP&GD Design

2008

1 1 950

5 440

350

1 7 740

2008

2007 2008

2 460 1 5 430

3 920 2 240

30 70

6 410 1 7 740

2007 2008

(HWT) 1 390 320

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