Dmx Technologies Group Limited Fy2008 Press Release

DMX TECHNOLOGIES GROUP

Media Release

DMX Posts Record-high Revenue of US$172.7 Million for FY08 driven by its Digital Media Business contributing US$53.1 Million - a 48.7% y-o-y Revenue Growth •

Highest-ever quarterly revenue of US$49.3 million in 4Q08 as Digital Media’s contracts from several large provincial and city cable TV operators in the PRC materialise

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Managed Services segment underscores market potential with 91.8% revenue growth in FY08 to US$10.0 million or 5.8% of Group revenue

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Gross margin improves five percentage points from 4Q07’s 22.62% to 4Q08’s 27.76% – the best over 11 consecutive quarters since 2Q06

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Group remains in a net cash position; expects to remain profitable in FY09

Singapore, 27 February 2009 – DMX Technologies Group Limited (“DMX” or the “Group”), today announced Group results that reflected 2008 as a pivotal year of market breakthroughs for DMX as initiatives to drive market share expansion for both Digital Media, the Group’s primary growth engine, as well as emerging new business segment, Managed Services yielded strong results in FY08. The Singapore Exchange Mainboard-listed leading information technology enabler and digital media solutions and services provider posted its highest-ever quarterly revenue of US$49.3 million for the fourth quarter ended 31 December 2008 (“4Q08”) or 17.2% year-on-year (“yoy”) growth over 4Q07 on strong growth by Digital Media and Managed Services. The strong 4Q08 revenue led to the Group achieving record-high total revenue of US$172.7 million for FY08, up 6.9% yoy from US$161.6 million for FY07. This was achieved despite difficult conditions in more mature market as the Group continued to remain margin-selective on new projects taken on by its traditional Infrastructure Solution segment. The main engine of growth in FY08 was the 48.7% yoy revenue growth delivered by the Digital Media group business, especially from new contracts secured from several large provincial cable TV (“CATV”) operators in China’s Shaanxi, Hubei and Jiangsu provinces as well as other city operators. Of the $53.1 million total revenue recorded by the Digital Media business for FY08, its Digital Media Solution segment accounted for US$39.5 million representing 39.6% yoy growth; while revenue contribution by its Multi-media Software segment, which provides backbone software 1

DMX TECHNOLOGIES GROUP

and module-based applications to CATV and internet protocol TV (“IPTV”) operators, surged 83.2% to US$13.6 million. Additionally, the fast-emerging Managed Services segment underscored its market potential with revenue almost doubling to US$10.0 million in FY08 from US$5.2 million, as the Group tapped its traditional infrastructure customer base to generate a new source of recurring revenue, e.g., by offering outsourced Managed Security Services. Consequently, the Group’s overall sales mix continued to change in FY08, with Digital Media’s share increasing to 30.8% in FY08 from 22.1% in FY07. Gross margin improved more than five percentage points to 27.76% in 4Q08 – the best over 11 sequential quarters since 2Q06 – compared to 22.62% in 4Q07. For FY08, gross margin improved to 26.45% from 24.42% a year ago. Operating profit increased 32.3% to US$20.9 million in FY08 as growth initiatives increased revenue and gross margins, while maintaining a tight control on operating expenses. Net profit attributable to equity holders for FY08 was lower at US$6.4 million compared to US$9.3 million for FY07. The decrease was mainly due to the US$4.7 million increase in amortisation expenses, i.e., new product and software development activities upon increasing commercial deployment, as well as foreign exchange loss arising from the depreciation of Korean Won and Indonesian Rupiah; more prudent general increases in allowances for trade and other receivables, and an investment impairment loss. Earnings per share on fully diluted basis for FY08 were lower at 1.29 US cents as compared to 1.98 US cents in FY07. Commenting on the results, Ms Jismyl Teo, DMX’s CEO, said, “We are pleased that our FY08 results are proving that continued investments to strengthen our Digital Media’s proprietary software and new products are starting to pay off at the top-line and in lifting gross margins. As for our traditional Infrastructure Enabling business, we are still getting decent gross margins as we remain selective on new projects and see continual support from our long-standing telecom customers especially in the Indonesian market. What’s particularly motivating is our early success in extending our scope into Managed Services which is generating new recurrent income streams to complement our historic project-centric business.” On outlook, Ms Teo said, ”Having secured contracts from several large provincial and city CATV operators, we have achieved significant breakthroughs in the PRC’s lucrative digital media market and built a solid foothold. This industry is still in the early stages and will not be grossly affected by the prevailing global financial crisis. More importantly, the strong reference cases we are establishing will equip us with a major competitive edge as we pursue further expansion into new provinces and large cities. Barring unforeseen circumstances, we expect to remain profitable in FY09.”

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DMX TECHNOLOGIES GROUP

The Group’s forward prospects in Digital Media continue to be underpinned by the mandate issued by the PRC’s State Administration of Radio, Film and Television that the digitization of all broadcast signal transmissions be implemented by 2015. According to Media Partners Asia’s research report “Asia Pacific Pay-TV & Broadband Markets 2008” published in April 2008, the total number of CATV subscribers in the PRC crossed 160 million as at the end of 2008, of which only 25% or about 40 million were receiving digital signals. “Collectively, our current customer cable operators have over 30 million subscribers for which digitisation will be progressively carried out in phases. In short, besides providing the digital TVenabling solution and software, we can look forward to building strategic long-term business relationships with existing customer operators,” explained Ms Teo. “We are well positioned to continually extend the scope of our services beyond the initial digitization conversion phases, for instance, enabling these operators to offer value-added services such as video-on-demand and personal video recording, as well as content consumption. There will thus be opportunities down the road for DMX to develop recurrent revenue streams and evolve into an end-to-end media solution and application services provider,” concluded Ms Teo. The Group’s balance sheet remained strong through FY08. As at 31 December 2008, net asset value per ordinary share was 35.27 US cents versus 37.51 US cents year-ago. Trade receivables rose by US$33.5 million to US$121.7 million. These receivables are irrevocable, of which 84.4% or US$102.7 million are not past due date and 77.3% are due from telecom and cable operators. Collections during FY08 were affected by the delays to project installations and acceptances in the PRC, mainly brought about by the May 2008 Sichuan earthquake, Beijing Olympics and the restructuring of its telecom industry. Accordingly, Day Sales Outstanding lengthened to 240 days, which led to net cash used in operations of US$8.5 million for FY08. On the other hand, total borrowings amounted to US$11.5 million, while pledged bank deposits and cash and cash equivalents stood at US$8.6 million and US$15.1 million, respectively. The Group thus remains in a net cash position going into FY09. DMX kicked off FY09 on a high note with two new strategic partnerships to fast-track the expansion of its Managed Security Services. The first collaboration was signed with Anhui Telecom, a subsidiary of China Telecom, to penetrate Anhui Province while the second deal was forged with Inner Mongolia’s Zhenglian Information Technology Co Ltd. ## End ## This press release is to be read in conjunction with the Company’s accompanying exchange filing pertaining to detailed results announcement for 4Q08 and FY08, which can be downloaded from www.sgx.com via drop-down menu for listed company announcements.

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DMX TECHNOLOGIES GROUP

Media & Investor Relations Contact Info: WeR1 Consultants Pte Ltd 29 Scotts Road Singapore 228224 Tel: (65) 6737 4844 Fax: (65) 6737 4944 Mona Leong, [email protected] Reshma Jain, [email protected] Gary Goh, [email protected]

DMX Technologies Group 10 Hoe Chiang Road #16-03 Keppel Towers Singapore 089315 Tel: (65) 6536 9923 ext 899 Fax: (65) 658 7566 John Leung, [email protected]

About DMX Technologies Group Limited DMX Technologies is a leading information technology enabler and provider of a wide range of digital media software and solutions. The Group specialises in providing integrated IT solutions to enable telecom operators, CATV operators, mobile operators, media corporations and enterprises to deliver enhanced services to their end-users. Its solutions range from providing service operators and enterprises with network security, network management and optimisation, to providing systems that enable digital media services. The Group owns a suite of proprietary multimedia software, which provides a platform for the delivery of enhanced TV and interactive value-added services over broadband, cable, mobile or other network media. Established in 1999 and listed on the Singapore Stock Exchange, DMX has built an extensive regional network of offices in Asia, including Greater China, Indonesia, Korea, Malaysia and Singapore. More information can be found at www.dmxtechnologies.com.

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