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  Unaudited Interim Reports 2001     E-mail

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COMMENTS ON RESULTS

Trading | Finance | Tax Queries | Dividends | Mobile | Auditors | STRATE


Holders of securities in Trencor and Mobile are reminded that the current financial period is for the eighteen months ending 31 December 2001. These interim reports cover the twelve months to 30 June 2001.

TRENCOR

Income before tax and non-trade items for the twelve months ended 30 June 2001 was R399 million (2000: loss R118 million) and undiluted headline earnings per share were 183,0 cents (2000: 165,0 cents). The further decline in the value of the rand against the US dollar resulted in a foreign exchange revaluation gain of R573 million, but also necessitated a currency translation adjustment to the existing dollar-based provision against the net value of the long-term receivables, increasing the net provision by R161 million. Management considered it prudent to increase the amount of this dollar-based provision by a further R37 million in view of current trading conditions in the global container leasing business; the aggregate increase in the net adjustment to the long-term receivables thus amounted to R198 million.

Textainer contributed R114 million to headline earnings (2000: R92 million).

The financial results are based on an exchange rate of US$1 = R8,07 at
30 June 2001 (2000: US$1 = R6,78).

TRADING

The decline in Textainer's fleet utilisation, which commenced in November 2000, continued through until June 2001. Since then the utilisation level stabilised but has not shown signs of improving. From the high-point of 85% in September 2000, utilisation has declined to just over 73%, but management believes that the company is well positioned to take full advantage when the container leasing market starts to improve. It is anticipated that the size of the container fleet under Textainer's management will reach the one million TEU (twenty foot equivalent units) level before the end of the current year.

The stainless steel tank container factory at Parow has continued to produce an outstanding product but due to current weak demand, volumes remain low. The future of this facility remains under constant review.

All of our other operations continued to experience difficult trading conditions during the period. There are no significant seasonal trading patterns in our businesses.

During June 2001, the company concluded a contract in terms of which its 40% shareholding in Centricity Inc was exchanged for 546 757 shares in Descartes Systems Group Inc (a Canadian corporation listed on NASDAQ and the Toronto Stock Exchanges) valued at US$19,70 per share, the weighted average listed price over 20 days prior to the conclusion of the contract. This transaction yielded a net gain of R76 million which has been included in non-trade items. Descartes shares are currently trading at about US$7 per share, but the directors do not consider the diminution in value to be permanent.

In August 2001, the group concluded an agreement with MicroStar Logistics Inc to establish TrenStar Inc, which will be owned 66% by Trencor Solutions and the balance of 34% by MicroStar's shareholders. Based in Denver, Colorado, TrenStar will develop internationally the current activities of Trencor Solutions, which comprise the owning, management and leasing out of returnable packaging equipment and the provision of technology and software solutions in transportation logistics.

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FINANCE

Textainer's 49,99% interest in Textainer Marine Containers Limited ("TMCL"), a joint venture financing entity with an overseas financial institution, formed for the purpose of purchasing containers that will be managed by Textainer, has been accounted for by Trencor on the proportionate consolidation method on a line-by-line basis. It is likely that from October 2001, Textainer's shareholding in TMCL will exceed 50%. In that event, Trencor will fully consolidate the results of TMCL. This will have an impact on the consolidated group gearing ratios as indicated below.

Virtually all of the capital expenditure of the group for the period under review was incurred in TMCL by Textainer in replenishing and expanding its container fleet; most of these additions were placed into long-term leases by Textainer.

The ratio of Trencor's consolidated interest-bearing debt to permanent capital, being the sum of total shareholders' funds and the convertible debentures, decreased to 133% (had TMCL been fully consolidated at 30 June 2001, this ratio would have been 144%) from 165% a year ago. With Textainer notionally equity accounted (its debt is without recourse to Trencor), this ratio was 37% compared to 62% at 30 June 2000.

TAX QUERIES

The enquiry by the South African Revenue Service ("SARS") into the tax treatment of the group's export partners' participation in the export of cargo containers (in respect of transactions entered into in prior years) continues. It is not possible to anticipate when it will be concluded. We remain confident that the supportive legal advice we have received will prevail should SARS seek to challenge the tax treatment.

As previously reported, a successful challenge by SARS, which we believe is unlikely, may result in the acceleration of the payment of a portion of the amounts attributable to third parties (i.e. our export partners) which are carried at their net present values, and which would otherwise be paid over periods of up to fourteen years.

DIVIDENDS

As previously reported, Trencor will not declare dividends until the advances under its South African banking facilities have been repaid.

MOBILE

Mobile Acceptances traded satisfactorily during the twelve months to 30 June 2001. As Mobile Industries derives most of its income from dividends it receives from Trencor, Mobile will not declare dividends unless and until Trencor does.

AUDITORS

KPMG Inc has been appointed as auditors to all South African group entities in the place of Arthur Andersen & Co, effective 29 June 2001. KPMG are auditors to Textainer and most of our major overseas subsidiaries and associates, whilst Arthur Andersen has been providing audit services to the Trencor and Mobile groups locally. It became necessary to appoint a single firm as auditors to the groups and, after due consideration of all relevant factors, the appointment was awarded to KPMG.

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STRATE

Holders of securities in Trencor and Mobile are advised that the companies are scheduled to transfer to the STRATE (Share Transactions Totally Electronic) system of electronic settlement on the JSE Securities Exchange South Africa with effect from Monday 12 November 2001. Trading for electronic settlement commences on Monday 3 December 2001 with electronic settlement from Monday 10 December 2001. Consequently, paper certificates will no longer be good for delivery from 3 December 2001. Further information will be included with the interim reports being posted to holders of securities.

ON BEHALF OF THE BOARDS

NI JOWELL CHAIRMAN TRENCOR LIMITED
C JOWELL  CHAIRMAN MOBILE INDUSTRIES LIMITED

28 AUGUST 2001

REGISTERED OFFICE:
1313 MAIN TOWER
STANDARD BANK CENTRE
HEERENGRACHT
CAPE TOWN 8001

TRANSFER SECRETARIES:
COMPUTERSHARE SERVICES LIMITED
1ST FLOOR EDURA, 41 FOX STREET
JOHANNESBURG 2001
(PO BOX 61051 MARSHALLTOWN 2107)

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