FY2006 Results Review28th February 2007

2

AgendaAgenda

1 Financial Review

2 Outlook

Financial ReviewFinancial Review

Presented by Grace GohGroup CFO

4

Financial HighlightsFinancial Highlights

(57%)S$50.4mS$21.7mPBT

(63%)S$49.4mS$17.0mPATMI

0.050.43Net Debt-to-Equity Ratio

(including PF loan)

(65%)9.24cents3.28centsEPS

(77%)S$24.9mS$5.7mOne time and fair value gains

(19%)S$25.4mS$20.5mOperating profit *

(1%)S$131.5mS$129.8mSales

+ / (-) %FY 2005FY 2006

* Excludes one time and fair value gains

5

74.1

32.732.732.732.7

90.190.190.190.1

7.07.07.07.00.8

56.6

0000

10101010

20202020

30303030

40404040

50505050

60606060

70707070

80808080

90909090

100100100100

Revenue by SectorRevenue by SectorS$’m

Municipal Sales 56% yoy

− Lower revenue from Middle East and Singapore

− SinoSpring - EPC revenue are fully eliminated upon consolidation

− 25% of 2006 Group revenue

FY 2005 FY 2006 FY 2005 FY 2006 FY 2005 FY 2006

MunicipalMunicipal IndustrialIndustrial OthersOthers

Consumer Sales 783% yoy

─Turnaround for FY06

─Sales expected to improve

─5% of 2006 Group’s revenue

Industrial Sales 59% yoy

─Strong order book and demand in the pharmaceutical and bio-technology sectors

─70% of 2006 Group revenue

6

20.8 21.5 23.534.5

52.3 56.6

90.1

2000 2001 2002 2003 2004 2005 2006

Strong Industrial GrowthStrong Industrial GrowthRevenue in S$’m

Growth backed by :

� New membranes application

� Robust demand from pharmaceutical, biotechnological & petrochemical sectors

7

Revenue by SectorRevenue by Sector

FY 2006FY 2006FY 2006FY 2006

Municipal

25%

Industrial

70%

Others

5%

FY 2005FY 2005FY 2005FY 2005

Industrial

43%

Others

1%

Municipal

56%

8

China China –– Key Revenue DriverKey Revenue Driver

FY 2006FY 2006FY 2006FY 2006

China

71%

SG

21%

OTH

8%

FY 2005FY 2005FY 2005FY 2005

SG

26%

OTH

18%

China

56%

9

Building up Recurring Income StreamBuilding up Recurring Income Stream

0%0%0%0%

10%10%10%10%

20%20%20%20%

30%30%30%30%

40%40%40%40%

50%50%50%50%

2005200520052005 2006200620062006 MediumMediumMediumMediumTermTermTermTerm

Long TermLong TermLong TermLong Term

% of Recurring Income to Total % of Recurring Income to Total % of Recurring Income to Total % of Recurring Income to Total RevenueRevenueRevenueRevenue

17%17%17%17%

> 30%> 30%> 30%> 30%

2%2%2%2%

3333---- 5 yrs5 yrs5 yrs5 yrs > 5 yrs> 5 yrs> 5 yrs> 5 yrs

20% 20% 20% 20% ---- 30%30%30%30%

10

Higher Personnel & Development CostsHigher Personnel & Development Costs

� To develop and expand into new markets and used oil recovery business

19.022.822.822.822.8

12.412.412.412.4

3.53.53.53.5

(0.2)

14.5

-5-5-5-50000555510101010

151515152020202025252525

FY 2005 FY 2006 FY 2005 FY 2006

Personnel Expense + Cost of Share based

Personnel Expense + Cost of Share based

Other Operating Expense

Other Operating Expense

Net Financial (Income)/Expense

Net Financial (Income)/Expense

FY 2005 FY 2006

► Necessary to generate new revenue streams

11

Cash Flow AnalysisCash Flow Analysis

(42%)64.637.2Net cash (used in) / generated

from financing activities

(6%)(55.8)(59.3)Net cash used in investing

activities

NM26.1(14.0)Net cash (used in) / generated

from operations

NM0.1(1.2)Payment of tax

NM26.0(12.8)Cash (used in) / generated from

operations

(3%)31.830.9

Profit before working capital changes adjusted for non cash item

ChangeFY 2005FY 2006In S$’m

12

Healthy Cash FlowHealthy Cash Flow

� Net cash used in operations of S$14.0m– Higher working capital requirements

– Higher tax payments of S$1.2m

– Higher trade creditors of S$25.4m

– Offset by related parties payments of S$11.8m

Net cash used in operations

Net cash used in investing activities

Net cash generated from financing activities

� Net cash used in investing activities of S$59.3m– Acquisitions of subsidiaries of S$10.9m– Property, plant and equipment of S$32.2m – Technologies, patents, license of S$11.7m

� Net cash generated from financing activities of S$37.2m– Interest payments of S$9.1m– Dividends distribution to shareholders of S$7.0m– Offset by drawdown of term loans of S$38.7m

13

0.43 0.05Net debt to equity ratio (including PF* Loan)

Healthy Debt to Equity RatioHealthy Debt to Equity RatioDec 06Dec 06 Dec 05Dec 05

78.1

ChangeChange

PF Loan

Long Term

Short Term

Total Borrowings

75.8 +2.3

Net Borrowings 93.4 10.7 +82.7

38.9 30.9 +8.0

32.2 0.4 +31.8

149.2 107.1 +42.1

Less : Cash & cash equivalents

(55.8) (96.4) -40.6

Net Debt Net CashNet debt to equity ratio (excluding PF* Loan)

Amts in S$’million

* PF – Non-recourse project financing

14

Low Debt Equity

Ratio of 0.43

Raise Equity (when

needed) to Increase

Capacity to Fund Large

Projects

Business trust or

infrastructure fund

Optimize Capital

Structure

�US$138m syndicated loan

� IFC – Tianjin US$25m

�Project financing

� Achieved asset light strategy

� Partial divestment of SingSpring Asset into Trust . Cash – $20.4m capital gain –S$8m

Funding GrowthFunding Growth

15

Order BookOrder Book

318318318318435435435435

2005200520052005 2006200620062006

� Order Book - S$435m

• Industrial / Consumer projects – S$110m

• Municipal projects - $325m

� Recurring income – S$4-6m

� Potential from SinoSpring group : S$160m to S$170m

Growth in order book mainly contributed by :

� Our pioneer projects in Algeria

� Industrial sector in China with strong demand in the pharmaceutical and bio-technology sectors

S$S$S$S$’’’’mmmmSin

oSprin

g SinoSpr

ing

37%

Presented by Sam OngGroup EVP & Chief Investment Officer

Executing & Restructuring Projects for GrowthExecuting & Restructuring Projects for Growth

17

2006 Summary

� Municipal Performance : Short Term Impact

� Very Strong Industrial Sales

� Very Strong Order Book

� Algeria : The Largest Project

� Investing For Future : People & Geo

� New pillar of Growth : Used Oil Recycling

� New JVs : Marmon / Hyflux Consumers

� Emphasis on O&M recurring revenues

� New Funding Platform : Biz Trust

30% CAGR (2003-2008)

Wat

er U

tiliti

es

Indu

stria

l

Oil

/ Rec

yclin

g

Financial CapabilityOperational Capability

TechnologyHum

an

Cap

ital

Singapore / SE AsiaChina

India, MENA

Con

sum

er

It’s So Clear

China

19

China Utilities (Sinospring)

450,000~400Total

50,000902008Huludao Desalination

100,0001542009Tianjin Desal

20,000112008Jiangsu, Dafeng South WTP

20,000122007Jinagsu, Yangkou WTP

40,000142008Jiangsu, Wujin WWTP

80,000292007Hebei, LangfangWWTP/WRP

20,000132007Jiangsu, Yangzhou WWTP

30,000102007Liaoning, Liaoyang WWTP/WRP

20,00092006Zhejiang, TiantaiWWTP

20,000102006Jiangsu, TaizhouWWTP

30,000172006Jiangsu, ChangshuWWTP

20,000112006Jiangsu, Wuxi WWTP

Capacity (m3/day)

Cost of Project (S$m)

Year of Completion

Project

20

Huludao Llatic Acid(substantiallycompleted)

Ningxia Llactic Acid

Used Oil

China Industrial & Non Water Projects

It’s So Clear

IndiaIndiaIndiaIndia

22

India : Karnataka, W.Bengal & Gujarat

Bangalore Office

Chennai Office

Desalination

Waste Water

NeWater

Used Oil

Industrial Sales

It’s So Clear

MENA

24

Algeria – Tlemcen @ Souk Tlata

25

Algeria

� The largest project for Hyflux

� Consortium: Hyflux 20% & Malakoff 80%

� Project : AEC 49% Consortium (51%)� Hyflux’s Effective Shareholding 10.2%

� WPA 25 years concession� Capacity: 200,000 m3 / year� Financing by Algerian banks� Off-taker: L’Algerienne Des Eaux

(ADE)� Project:10 year Pioneer Tax Status� Corporate & VA Taxes waived� Custom Duties at Preferential Rate

� EPC: Exclusive to Hyflux @ US$205m

� Completion: 24 mths from financial close

Project Co.

20%80%

Malakoff MenaSpring

Consortium AEC

49%51%

Hyflux Ltd

100%

ADESonatrach Guarantee

WPAHyflux Algeria

EPC

Hyflux Ltd

100%

The Project

It’s So Clear

Consumer

27

New Biz Model / Products / Partners

� A Great Turnaround Story

� Extended Product Breadth To Cater To Various Market Segments

� New Commercial, Distribution and R&D Partnerships

� To be continued …

28

A Singapore R&D JV

R&D JVSingapore

Manufacturing JVChina

license

Hyflux Marmon

Hyflux Marmon Water

50% 50%

HyfluxMarmon

WaterExisting products

Existing products

South East Asia / India North America / Europe

license

Greater China

29

A China Manufacturing JV

Manufacturing JVChina

Hyflux Consumer Products Marmon Water

49% 51%

South East Asia / India North America / Europe

Hyflux MarmonDirect Sales & Marketing

To Greater China

Sales Channels Sales Channels

� Global Distribution Channel for Joint Technologies

� Complimentary Products & Market Segments

� Breakthrough & New Applications

� Global HQ Singapore USA

� Territory Asia Pacific North America & Europe

� Residential Point of Use Point of Entry

� Products Gurgle / Pitcher Softener

� Industrial Hollow Fibers Stainless Steel

It’s So Clear

Used Oil Recycling

32

Current Used Oil Projects

Completed – ESK Singapore

In Progress

In Prelim Discussion

It’s So Clear

Industrial Sales

34

Industrial Sales & Process Application

35

Funding Growth : Business Trust

� 1st Milestone

– Structured financing

– SingSpring � CitySpring Trust

– S$8 million capital gain from 20% divestment

– 1st right of refusal projects in China from Hyflux

– IPO at current yield of 6.75% now trading at 4%

– Holding 30% of SingSpring trust units

� A Platform to fund Pipeline growth

– China

– India and Southeast Asia

36

2006 Summary

� Municipal Performance : Short Term Impact

� Very Strong Industrial Sales

� Very Strong Order Book

� Algeria : The Largest Project

� Investing For Future : People & Geo

� New pillar of Growth : Used Oil Recycling

� New JVs : Marmon / Hyflux Consumers

� Emphasis on O&M recurring revenues

� New Funding Platform : Biz Trust

30% CAGR (2003-2008)

Wat

er U

tiliti

es

Indu

stria

l

Oil

/ Rec

yclin

g

Financial CapabilityOperational Capability

TechnologyHum

an

Cap

ital

Singapore / SE AsiaChina

India, MENA

Con

sum

er

Presented by Sam OngGroup EVP & Chief Investment Officer

OutlookOutlook

38

Outlook : Outlook : 5-Yr CAGR On Track

0000

10101010

20202020

30303030

40404040

50505050

60606060

70707070

80808080

2003200320032003 2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008

PATPATPATPAT

30% CAGR30% CAGR30% CAGR30% CAGR

Strong Pipeline to deliver CAGR growth of

30% over 5 year period from

2003 - 2008

Presented by Sam OngGroup EVP & Chief Investment Officer

Executing & Restructuring Projects for GrowthExecuting & Restructuring Projects for Growth

40

2007 Focus2007 Focus

(1) Executing Projects

(2) Restructuring Projects into Trust

(3) Capitalizing Technology

41

OutlookOutlook

On track to deliver CAGR growth of 30% over 5 year period from

2003 - 2008

Q&A SessionQ&A Session