The performance by the Group for Q1 2003 showed an increase in revenue and profit before tax over both Q4 2002 and Q1 2002 despite the war in Iraq and the SARS outbreak in various parts of the world. Business in the US, UK and South East Asia had remained stable. The Group continued to make headway into the Middle East with the addition of two new customers in the current quarter. The war in Iraq has diluted its sales efforts in the Middle East and further progress would depend on developments in the region. The SARS outbreak has not materially impacted the Group's performance in Q1 2003. The investment by its sales teams in China and Hongkong over the last 12 months will now take longer than expected to bear fruit. The Group has received its first order from Mexico in April 2003.

The Group's two divisions, Industrial business unit and IT Consulting business unit, contributed $34.6 million (89.8%) and $4.0 million (10.2%) to the revenue and $4.3 million (92.0%) and $0.4 million (8.0%) to the profit before tax, goodwill amortization and minority interest respectively.

The Group continued to benefit substantially from its overseas operations, 84.8% for its revenues and 92.7% for its profit before tax, goodwill amortization and minority interest. The contributions by the geographical regions of Singapore, Asia, Europe/Middle East and The Americas are 15.2%, 3.8%, 16.3% and 64.7% for revenue and 7.3%, 13.7%, 16.2% and 62.8% for profit before tax, goodwill amortization and minority interest respectively.

For Q1 2003, the Group generated a cash inflow from operations of $2.3 million. The Group had used the $2.3 million of cash inflow and $0.2m from its cash in bank to repay $2.5 million of its bank borrowings. The Group had a cash and bank balance of $9.2 million and a bank borrowing of $36.0 million at the end of Q1 2003. The Group ended the quarter with a shareholders' fund before minority interest of $41.7 million and a net bank borrowing of $26.7 million giving it a net gearing of 0.64 times.

The Group received new orders totaling $38.0 million for Q1 2003, an increase of 3.8% and 25.4% over $36.6 million recorded in Q1 2002 and $30.3 million recorded in Q4 2002. The outstanding order as at end of Q1 2003 is $73.0 million.

Amidst the uncertainties in its market, the outlook continues to be positive as prospects for new contracts remain at healthy levels. The SARS outbreak in several regions has affected our cross-borders sales process and project execution. Among the Group's operations, the Asia business is most affected as it has targeted the China and Hongkong as its new markets for its organic growth. The Group has implemented several measures to address the SARS outbreak. They included travel restriction to SARS affected areas in accordance to WHO recommendations, segregation of execution teams and increased reliance on in-country resources. With a network of 15 offices in 9 countries, the Group is well positioned to support its existing and new projects.

Based on the current outlook and existing outstanding orders, the Group remains optimistic that its performance will be better for Q2 2003 compared to Q1 2003. For the next 12 months, the performance for USA and UK is expected to remain positive. However, the Group's performance in Asia for the same period will depend on the region's ability to deal with the SARS outbreak.

CSE Systems & Engineering Limited is a global system integrator listed on the main board of the Singapore Exchange (SGX: CSE Sys), operating in the Americas, Europe, the Middle East and Asia. With over 700 employees worldwide, the Group provides state-of-the art, cost-effective total integrated industrial automation and information technology solutions to clients globally in the energy (Oil & Gas/Power), chemical/petrochemical, water and telemetry, healthcare, banking and finance and public sectors. Visit www.cse.com.sg for more information.

Contact information
CSE Systems & Engineering Ltd
Lim Boon Kheng @ boonkheng@cse.com.sg
Tel : 9735-2618

Submitted by Tan San-Ju, Company Secetary on 05/05/2003 to the SGX