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HIGHLIGHTS:

• Revenue increase of 307% to US$267.5 million primarily due to additional revenue from recent acquisitions while direct service fees incurred and cost of goods sold rose to US$236.9 million;
• Mobility segment comprised more than 90% of Group revenue;
• However, loss after tax amount to US$18.0 million mainly due to increased costs related to consolidation and integration of new subsidiaries such as personnel and marketing cost, foreign exchange loss (including unrealised) and amortisation of intangible assets;
• Net current assets stood at US$128.5 million as at 30 September 2011 with cash and cash equivalents of US$84.9 million.

Singapore, November 14, 2011 - S i2i Limited (“S i2i”, and together with its subsidiaries, collectively, the “Group”), a leader in the “Switch Up” to Mobile Internet industry, today announced revenue of US$267.5 million for the three months ended September 30, 2011 (“Q2 FY2012”) which represented a four-fold increase from US$65.7 million for the corresponding three months the previous year (“Q2 FY2011”). The significant increase in revenue was attributed to the acquisitions of the Newtel Group in December 2010, the CSL entities in April 2011, and the Affinity Group in May 2011 (the “Acquisitions”).

For Q2 FY2012, the Group’s sales of handsets and related products crossed two million handsets. Revenue contribution from the Group’s Mobility segment was 91.3% in Q2 FY2012, compared to 86.5% in Q1 FY2012, with Technology segment contributing the rest of the revenue.

However, loss after tax attributable to shareholders stood at US$18.0 million in Q2 FY2012. Consequent to the Acquisitions, almost all cost components had gone up, mainly direct services fees and cost of goods which sold at US$236.9 million in Q2 FY2012 compared to US$51.9 million in Q2 FY2011. Marketing expenses also increased from US$0.3 million in Q2 FY2011 to US$10.0 million in Q2 FY2012 as the Group incurred further costs related to marketing and channel marketing to enhance branding while personnel costs also increased from US$6.2 million in Q2 FY2011 to US$12.5 million in Q2 FY2012.

The Group also recorded a foreign exchange loss of US$6.8 million in Q2 FY2012 compared to a gain of US$4.0 million in Q2 FY2011. More than 75% of the foreign exchange loss in Q2 FY2012 was unrealised currency loss due to the appreciation of the US Dollar, primarily against the Singapore Dollar, Malaysia Ringgit and Indonesia Rupiah.

However, the Group’s financial and liquidity conditions remain robust. As at September 30, 2011, the Group’s net current assets stood at US$128.5 million, with cash and cash equivalents of US$84.9 million and total debt of US$64.4 million.

Dr B K Modi, Chairman of S i2i commented, “With the completion of the Acquisitions, our company is in a consolidation phase. We are focused on the execution of our ‘Switch Up’ strategy and this transition of sales to higher value smart-phones had led to initial negative impact on our performance due to increased costs and overheads.

“However, S i2i now possesses the necessary scale, distribution network and localised knowledge which are crucial factors in our ‘Switch Up’ to Mobile Internet. With centralisation of Singapore as a hub for product innovation and design, we are confident of enhancing our product desirability and achieving synergies from the aggregation of our supply chain to reap economies of scale. As evident by our marketing expenses, we will also be investing in brand building through a unified “S” brand so as to further leverage on our extensive distribution reach to drive sales and more importantly margins in due course.”

Growth Strategies

To anchor the Group’s business transformation from mobile to mobile internet, S i2i has established its global headquarters in Singapore. The imminently operational Global Innovation Centre will serve as a hub for supply chain management, branding, product innovation and design, providing the Group with a competitive edge in introducing Mobile Internet products in the region.

Going forward, the Group intends to leverage on its strengths to drive sales from its acquisitions and aspires to be the top local brand in each S i2i market by 2015. The Group’s four-pronged growth strategies comprise of (i) leveraging on its scale and distribution network, (ii) establishing a unified ‘S’ brand, (iii) forming and cultivating partnerships with leading companies in the value chain, and (iv) harnessing operational efficiencies to reap economies of scale.

About S i2i Limited (“S i2i”) (www.spicei2i.com)

Listed on the Main Board of SGX-ST, S i2i Limited is a leader in the “Switch Up” to Mobile Internet industry through the supply and sale of its innovative brand of smartphones and other mobile related products. Following the recent acquisitions of Malaysia’s “CSL” brand, Thailand’s “Wellcom” brand and Indonesian’s “Nexian” brand, S i2i is one of the largest Mobile Internet companies in the ASEAN region.