Singapore - 26 August 2004 - Radiance Electronics Limited, a China-based Electronics Manufacturing Services ("EMS") provider to the satellite communications industry has today announced its results for the financial year ended 30 June 2004.

Financial Highlights

FY2004 in Review

Revenue rose by 136% to S$63.7 million in the second half of FY2004 compared to S$27.0 million in the first half of FY2004. This was largely due to a significant increase in revenue from the satellite communications segment in Radiance Shanghai as well as an increase in revenue in the non-satellite segment in both Radiance Shanghai and Radiance Shenzhen. As a result, the Group's full year's revenue increased by 5.8% to S$90.7 million.

Gross Profit for the second half of FY2004 jumped 261% to S$12.0 million compared to S$3.3 million in the first half. Gross margin improved from 12.3% to 18.8% in the second half as the Group shipped more higher value added products. Hence, FY2004 gross profit increased to S$15.3 million with gross margin of 16.8% in FY2004 against 15.6% in FY2003.

As announced in October 2003, one of Radiance's key customer then, Channel Master ("CM") filed for a bankruptcy petition under Chapter 11 in the United States Bankruptcy Court. The Group had no more dealing with CM as at 30 June 2004 but as a prudent step, the management decided to make a full provision of S$4.3 million against the remaining trade receivables due from Channel Master . Consequently, operating profit fell to S$5.6 million in FY2004 from S$6.9 million in FY2003. Net Profit for FY2004 stands at S$4.5 million, with strong operating cash flows at S$8.6 million. The Group has low gearing with cash and cash equivalents of S$18.7 million as at 30 June 2004.

Mr Henry Goh Boon Leng Radiance Electronics Limited's Chief Executive Officer said, " We are pleased to deliver a set of good results for our shareholders. The second half of FY2004 has been good for us as we recovered from our weak sales in first half of FY2004. With the Radiance Shenzhen operations smoothening up, we have added new customers in the non-satellite segment and will continue our effort on growing the Shenzhen plant. Due to the increased level of business activities and complexity of products manufactured in 2H FY2004 as well as anticipated future demands, the Group has invested substantially in additional SMT and test equipment. We believe this enhanced capacity will enable us to undertake the anticipated increased business activities and service our customers better in the immediate future. Going forward, we will continue to look for new business and investment opportunities. "

Segmental Breakdown

The Group's diversification strategy paid off in FY2004 with the revenue contribution from the CP and OP segments increasing from 12% in FY2003 to 27% in FY2004. The CP division contribution to revenue jumped 84% to $17.5 million as Radiance Shanghai acquired a new customer in the CP sector. The operation of our new subsidiary in Shenzhen also contributed to the diversification effort.

The Group is doing well in its niche satellite segment as evidenced from the revenue growth and margins of its SC division. It will continue to explore opportunities in the SC segment with new customers and strengthen its relationship with existing customers.

Outlook for FY2005

Mr Goh remarked, "Prospects for 2005 remain strong as we have experienced strong orders from our customers in 2H FY2004 and these orders have spilled over into 1H FY2005. We are expecting FY05 to be another profitable year. We are happy to put the Channel Master issue behind us and we certainly look forward to improved business prospects through expansion and diversification of our customer base."

Rewarding Shareholders

In conjunction with its good performance, Radiance is proposing a final dividend of 0.2 cent per share. The dividend is tax-exempted. This is in addition to the interim dividend of 1.3 cents declared on 14 May 2004.

Mr Goh concluded, " The directors and management of Radiance would like to take this opportunity to thank all our shareholders, customers and business associates for your support and we look forward to enhancing the value of your investment and trust in Radiance. "


About Radiance Electronics Limited

Radiance is a specialist providing electronics manufacturing services (" EMS") to customers who are OEMs or ODMs of products in the satellite communications and computer peripheral industries. Radiance provides Box Build and PCBA for Satellite Communications products such as Low Noise Block Converters (LNB) and Satellite Signal Distribution Equipment and accessories; and computer peripherals.

Radiance manufacturing facilities are based in low cost PRC, which improve their competitive pricing. To tap on the lower costs of land and labour and to broaden its customer base, Radiance has set up a new manufacturing plant in Shenzhen, PRC.

As a quality testament, Radiance's plant in Shanghai, PRC has been awarded ISO 9001 and QS 9000 certification and enjoys good rapport with the local authority. They have also been awarded a Class A rating under the Customs Management Program by the Shanghai Customs Authority for their excellence in the customs compliance efforts. Radiance Shanghai was also awarded the High Technology Enterprise Award in 2001. As for the plant in Shenzhen, it was awarded the ISO 9001 in March 2004.