13 February 1996
Metro Pacific Corporation
(MPC) announced today that unaudited consolidated net profit
after tax and minority interests rose 64 per cent to Pesos 843.9
million in the year ended 31st December from Pesos
513.0 million in 1995, fueled by maiden contributions from the
Fort Bonifacio development, as well as strong contributions from
other affiliated companies.
MPC, the Philippine flagship of Hong Kong-listed
First Pacific Company Limited, registered basic earnings per share
of 25.49 centavos, up 35 per cent from the previous year's 18.89
centavos. Per share earnings on a fully diluted basis increased
by 24 per cent to 22.80 centavos from 18.41 centavos.
Mr Napoleon L. Nazareno, President of MPC,
said: "We are delighted with these results which confirm
the soundness of our diversification strategy. Our focus has
changed over recent years as significant investments have been
made in property development, telecommunications and in banking
to provide a balance to our established consumer products and
packaging subsidiaries. The diversity of these interests has enabled
MPC to produce strong profit growth and provides a foundation
for further substantial earnings growth in the future."
MPC's profit before other income grew 21 per
cent to Pesos 523.1 million from Pesos 431.4 million in 1995,
bolstered by contributions from affiliated companies. Contributions
in earnings from affiliates more than tripled to Pesos 485.5 million
from Pesos 157.9 million, reflecting maiden profits from Bonifacio
Land Corporation, as well as further improvements at Landco, Inc.,
a real-estate developer; Smart Communications, Inc., a diversified
telecommunications company; and PDCP Development Bank, Inc.
Operating profit declined to Pesos 263.8 million,
however, reflecting lower contributions from the Group's packaging
businesses. Other income dipped to Pesos 262.2 million from Pesos
285.5 million. Income in this category principally related to
the divestment of MPC's holding of convertible bonds in Smart,
and a gain on dilution in the Group's interest in AR Packaging
Corporation (ARPC) arising from the entry of Germany's VAW Europack
GmbH as a 40 per cent shareholder. Non-recurring charges were
recorded in connection with restructuring and other costs primarily
associated with the Group's packaging division.
Total indebtedness to equity stood at 0.81:1
at year-end, compared with 0.71:1 a year earlier, mainly due to
increases in long-term debt offset by a 27 per cent rise in stockholders'
equity to Pesos 10.9 billion at year-end. The increase resulted
primarily from the issue of a seven-year US$135 million convertible
bond in April, US$57 million of which has subsequently been converted
to equity; and retained earnings for the year.
Elaborating on the results, Mr Nazareno said:
MPC's presence in the real estate business is represented primarily
through BLC, Landco and Pacific Plaza Towers, Inc. Their respective
projects continue to demonstrate significant short and long term
potential. BLC has an interest of 55 per cent in Fort Bonifacio
Development Corp. (FBDC) which is to develop a 214-hectare site,
as part of the master plan for the 440-hectare former military
base in the heart of Metro Manila, into an integrated commercial
and residential centre. Bases Conversion Development Authority
has turned over 45 hectares of vacant land to FBDC, and FBDC received
its License to Sell from the Housing and Land Use Regulatory Board
(HLURB) in October. This enabled FBDC to enter into firm Contracts
to Sell with third parties and certain BLC shareholders for 16
hectares of land with a total sales value of approximately Pesos
28 billion. Payments will be received over the next 10 years.
FBDC recorded net income of over Pesos 1 billion for 1996, and
the signed Contracts will provide a strong base of future recurrent
earnings.
"Landco, which reported a sharp rise in
net income to Pesos 250.0 million from Pesos 70.7 million, concentrates
on property development outside Metro Manila and thus provides
a balance to the Group's other real estate investments in the
Greater Manila area. Through its landbank and strategic joint
ventures in key cities of the country, Landco has created a national
platform for stronger growth in 1997 and beyond," he said.
In telecommunications, Smart aggressively expanded
its cellular and national backbone infrastructure and had 308,000
cellular subscribers, net of disconnections at year's end. Smart's
International Gateway Facility (IGF), which provides long distance
calling services, and paging network continue to be actively promoted
to the market and to Smart's cellular subscriber base. Work is
also progressing on the initial phase of the build out of the
Local Exchange Carrier (LEC) project which provides local calling
services. Smart has consistently adopted a prudent approach in
the management of its financial affairs by screening new accounts
and strictly enforcing credit and collection policies. In addition,
by using software which is built into the network and the use
of sophisticated controls, fraud has been substantially avoided.
This approach has enabled Smart to maintain tight control over
its accounts receivable. Smart, with the continued development
of its cellular, IGF, LEC and paging services, and its strong
management, is anticipated to remain an industry leader.
Mr Nazareno further noted that the Group's
interests in consumer products have continued to perform well
with increased sales and profit at most companies in the division.
Metrolab Industries, Inc. remains the market leader in facial
astringents with its Eskinol brand and, by the end of 1996, Metro
Bottled Water Corporation's distilled water, Wilkins, became industry
in all water-product categories. Together with Holland Pacific
Paper, Inc., the manufacturing facilities of these three companies
were successfully relocated to Cavite during 1996 to provide expanded
and more technically advanced facilities. Holland also achieved
significant growth in the sales of its own brands, Softee and
Gem, and is well positioned to advance its market share in 1997
for packaged paper products.
In banking, MPC's PDCP Bank affiliate had a
successful year with the acquisition of the branch network and
certain assets of First Bank, and reported substantially increased
net income. In late 1996, MPC, as the major shareholder in PDCP
Bank, and the major shareholders of AsianBank Corporation agreed
in principle to pursue the merger of both banking institutions.
The merger, which is anticipated to be completed within the first
semester of 1997, subject to appropriate approvals, will combine
PDCP Bank's extensive retail network with AsianBank Corporation's
universal banking operations. This will enable PDCP Bank to compete
effectively with the large universal banks.
MPC's Packaging Group, now consolidated under
Steniel Manufacturing Corporation, experienced severe difficulties
during the year as a result of an over capacity in the market
and the fall in world paper prices. The reorganisation announced
last year, involving the consolidation of the corrugated carton
operations in Metro Manila within Steniel's facility in Cavite,
is progressing well and will be completed within the first semester.
The Cavite facility is designed to meet customer demands in terms
of price and just-in-time delivery and will provide improved production
efficiency through a reduced cost base. The reorganisation is
anticipated to return the corrugated operations of Steniel to
profitability while maintaining its leadership position in the
industry.
ARPC, the Group's flexible packaging manufacturer,
was consolidated under Steniel during the year to create a more
integrated packaging group. In March 1996, it entered into a
strategic partnership with VAW through the issue of new shares
for Pesos 550 million, enabling it to reduce debts substantially.
ARPC has benefited significantly from the advanced technical
support derived from this alliance, including the secondment of
personnel to ARPC to assist in the operations.
For further information, please contact :
| Seumas Gallacher Executive Director Special Assistant to the President Metro Pacific Corporation | Tel: (632) 811 0053 |
| Chris Young Finance Director Metro Pacific Corporation | Tel: (632) 811 0029 |
| Robert Sherbin Group Vice President Corporate Communications First Pacific Company Limited | Tel: (852) 2842 4380 |
| Paul Wallace Group Financial Controller First Pacific Company Limited | Tel: (852) 2842 4225 |
Company information can also be accessed on:
Internet: irasia.com/listco/hk/firstpac
E-mail: info@firstpac.com.hk
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