EPY E-Pay Asia

RNS Number:0176A
e-pay Asia Limited
11 July 2007


ASX / AIM: EPY

                               e-pay Asia Limited
                  ("e-pay Asia," the "Company" or the "Group")

                                 Trading Update

The Board of e-pay Asia has conducted a detailed review of its business and,
although trading in its core reload business in Malaysia continues to grow, the
Company has experienced a series of challenges with regard to its Indonesian
business and its proposed expansion into China. In view of these developments,
the Board expects that the results for both the six months ended 30 June 2007
and for the full year ending 31 December 2007 will be significantly below
expectations.

The Indonesian business faced challenging trading conditions during the first
half of the financial year. While it was anticipated that this business would
recover to make a positive contribution to the Group in the second half of the
financial year, unfortunately this is not now anticipated to be the case. As a
result, the Indonesian business will therefore operate at a loss for the year as
a whole. This development, in addition to higher than expected financing costs,
will have a significant impact on the Group's results for 2007.

In addition, after a review of the Chinese market opportunity and the subsequent
balancing of short term growth prospects against potential risks, the Company
has decided to enter this market via a joint venture with a licensed operator
and move away from the existing practice of selling licences on an individual
basis. Although this strategy will secure better long term returns for the
business, in the short term the Group will sacrifice its direct software
licensing sales, which generated A$3.6m of net profit in 2006.

Although this has been an exceptionally difficult decision to make, it has been
taken to ensure future long term success in China.

Overall, e-pay Asia has the necessary finances in place to underpin its core
business in Malaysia and immediate action has been taken in Indonesia to reduce
costs. In addition, a further cost reduction programme is underway across the
Group, which is expected to generate substantial savings.

e-pay Asia's core business in Malaysia continues to perform well and good
progress is being made towards entering new markets in China and India, which
will provide the Company with significant opportunities. The Board remains
confident of future prospects with further announcements regarding new markets
expected in the second half of 2007.



For more information:

Australia
Jack Tan                 e-pay Asia Limited      +614 1828 6266 / +612 9283 8835
Company Secretary                                jtan@epay-asia.com                           
                 
Asia / Americas
Tan Yap Seng             e-pay Asia Limited      +6017 229 1616 / +603 5632 2488
Corporate Affairs                                investor@epay-asia.com                            
                  
UK / Europe
David Newton             Seymour Pierce          +44 20 7107 8336
NOMAD                                            davidnewton@seymourpierce.com

Shane Dolan              Biddicks                +44 20 7448 1000
                                                 shane.dolan@biddicks.co.uk




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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