54% growth in revenue to US$480m for FY08

•

is expected to continue into current yearStrong growth in demand for finished steel products and value-added steel products which

• Group will use placement proceeds of S$28.4m for working capital and new investments

Year ended 30 April (in US$’m) FY2008 FY2007 % Chg

Sales 480.0 310.9 +54.4

Gross profit 64.9 34.6 +87.5

Net profit 11.6 7.3 +59.5

Earnings per Share (US cents) 2.49 1.58 +57.6

SINGAPORE - 23 June 2008

steel supply-chain management company with integrated value-added services, is riding high on the strong

demand for steel products globally.- Mainboard listed Novo Group Ltd. (“Novo” or the “Group”), a global

Novo reports strong FY2008 results

Page 2 of 3

For the 12 months ended 30 April 2008 (“FY2008”), the Group achieved a 59.5% increase in net profit to

US$11.6 million on a 54.4% surge in sales to US$480 million. In particular, the sales for the finished

products during the year under review has grown by 66.3% to US$332 million due to the shift of business

focus to finished and value-added products.

Commenting on the latest results, Mr Dicky Yu, Novo’s Executive Chairman, says, “After crude oil, steel is

the world’s second largest traded commodity and Novo is at the heart of the steel business, making us wellplaced

to capitalise on the boom trend now. We have been going through very fast growth in the past three

years and indications are, we will continue to ride on the momentum of demand for steel products.”

In line with its topline growth, Novo’s cost of sales in FY2008 spiked 50.2% to US$415.1 million, while

selling and distribution expenses rose 84.0% to US$45.9 million. The latter was mainly from increases in

freight charges and distribution agency fee from the greater volume of tonnage handled during the year.

Said Mr Yu, “Novo handled 1.07 MT of steel products in FY2008, almost double the sales volume as

compared to the 0.66 MT handled in FY2007. Despite increases in our overall expenses, profitability levels

of Novo in FY2008 remained very robust with our gross profit margins improving to 13.5% from 11.1%

previously.”

As part of its ongoing efforts, Mr Yu says the Group will continue to strengthen its co-operation with iron

ore mines, steel mills, dealers and end-users, by providing more value-add services to these long term

partners in the steel industry.

The Group, he notes, is operating in markets with stable economic growth and strong demand in steel

products especially those from emerging markets in South America, India, the Middle East and Southeast

Asia.

“These markets provide excellent opportunities for the Group to expand its market share and realize its

profit potential. We will continue to set up new offices and representatives in these markets, as well as

employ experienced professionals, to explore these opportunities in the coming year,” says Mr Yu.

Novo reports strong FY2008 results

Page 3 of 3

For the current year, Novo will continue to expand its business focus on value-added steel products, such as

coated steel and special steel which are items in highly demanded by end-users mainly in the shipbuilding,

construction and petrochemical industries.

To tap these opportunities, Mr Yu says the Group will continue to exercise prudent financial management.

It will at the same time look for investment opportunities to try to increase its overall margins as well as to

complement the growth momentum of the value chain activities.

Novo is financially strong. In April this year, it successfully completed a compliance placement in

connection with the RTO which raised net proceeds of S$28.4 million. Of these, about 74% will be used for

working capital and 26% for new investments.

Concluded Mr Yu, “The management is confident in facing new challenges in the coming year. As at the

end of FY2008, we are sitting on cash and equivalents amounting to US$30.2 million, which gives us the

financial might to scale up our growth and potentially deliver an enhanced return on investment to our

stakeholders.”