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First Pacific Cptl (78JZ)

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Thursday 29 November, 2001

First Pacific Cptl

Fthr MetroPac 3rd Qtr Results

First Pacific Capital (1997) Ld
29 November 2001

                        FIRST PACIFIC COMPANY LIMITED

               (Incorporated in Bermuda with limited liability)

           2001 THIRD QUARTER RESULTS OF METRO PACIFIC CORPORATION

           CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

                                 (Unaudited)

For the period ended 30          Nine Months               Three Months
September
(In thousands Pesos)             2001          2000          2001          2000

Revenues                    5,487,297     6,968,207     1,080,961     1,142,563
Cost of sales             (4,324,217)   (4,868,616)   (1,059,641)   (1,054,367)
Operating expenses          (869,105)     (801,768)     (300,757)     (289,711)

Operating profit/(loss)       293,975     1,297,823     (279,437)     (201,515)
Equity in net losses of     (266,406)     (163,491)      (49,805)      (38,837)
affiliated companies
Financing charges, net    (1,613,004)     (895,385)     (646,594)     (331,617)

(Loss)/profit before      (1,585,435)       238,947     (975,836)     (571,969)
other expense
Other expense, net          (787,175)   (2,142,447)     (461,500)   (2,003,888)

Loss before taxation      (2,372,610)   (1,903,500)   (1,437,336)   (2,575,857)
Taxation                     (40,730)     (266,361)        82,514       151,959

Loss from continuing      (2,413,340)   (2,169,861)   (1,354,822)   (2,423,898)
operations
(Loss)/gain from              (2,180)     5,355,076         (430)     5,654,977
discontinued operations

Net (loss)/income before  (2,415,520)     3,185,215   (1,355,252)     3,231,079
outside interests
Outside interests             207,931     (476,608)       235,329        80,888

Net (loss)/income for the (2,207,589)     2,708,607   (1,119,923)     3,311,967
period

Retained earnings
Beginning of period         6,941,959     4,781,231     5,818,293     4,144,854
Dividends accrued on         (54,000)      (55,017)      (18,000)      (22,000)
preferred shares

End of period               4,680,370     7,434,821     4,680,370     7,434,821

(Loss)/earnings per share
(in centavos)
Basic                         (12.16)         14.27        (6.12)         17.69

Weighted average number
of shares in issue
Basic                      18,603,473    18,598,898    18,603,473    18,598,898



                         CONSOLIDATED BALANCE SHEETS

                                 (Unaudited)

As at                                            30            31            30
                                          September      December     September
(In thousands Pesos)                           2001          2000          2000

ASSETS

Current assets
Cash and cash equivalents                   898,440     1,560,407     1,779,637
Receivables                               5,256,461     6,786,668     6,742,478
Due from affiliated companies             1,265,707     2,262,678     4,443,578
Inventories                                 155,777       202,899       609,206
Development properties held for sale      9,418,752     6,614,775     2,501,532
Prepayments and other current assets      5,821,706     4,379,639     4,526,055
Deferred income tax asset -net               71,706       115,729       547,399

Total current assets                     22,888,549    21,922,795    21,149,885

Long-term receivables                     1,113,225     1,692,054     1,616,423
Investments in affiliated companies       2,826,894     2,884,751     3,485,299
Development properties                   51,836,464    57,465,132    57,439,915
Property, plant and equipment             6,561,417     5,887,615     6,336,174
Goodwill                                     12,301        19,997       120,068
Other assets                              4,450,126     4,574,589     4,651,622

Total assets                             89,688,976    94,446,933    94,799,386

LIABILITIES AND EQUITY

Current liabilities
Loans and notes payable                   9,295,126     4,533,891     7,274,769
Current portion of long-term debts          633,533     7,576,253     2,643,506
Current portion of long-term                658,762     1,884,604     1,393,456
liabilities and provisions
Accounts payable and accrued expenses     5,694,526     4,946,088     4,236,099
Income tax payable                           20,230         4,603        10,383
Total current liabilities                16,302,177    18,945,439    15,558,213

Long-term debts                           8,394,013     4,327,272     8,115,209

Long-term liabilities and provisions      1,105,153     2,912,311     2,059,250

Equity
Stockholders' equity
Capital stock                            18,606,695    18,602,120    18,602,120
Additional paid-in capital               10,411,914    10,407,065    10,407,124
Treasury stock                          (1,033,000)   (1,033,000)   (1,033,000)
Retained earnings                         4,680,371     6,941,959     7,434,821
Outside interests                        31,221,653    33,343,767    33,655,649

Total equity                             63,887,633    68,261,911    69,066,714

Total liabilities and equity             89,688,976    94,446,933    94,799,386




                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (Unaudited)

For the period ended 30 September
(In thousands Pesos)                                         2001          2000

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss)/income for the period                      (2,207,589)     2,708,607
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization                             648,340       730,689
Provision for deferred tax                                 22,942       214,072
Reversal of gain on change on equity                      202,003             -
Provision for decline in value of investment                    -       933,989
Reversal of provision for possible lot returns          (233,980)             -
Unrealized foreign exchange loss - net                    123,847       330,971
Loss on disposal of fixed assets                           15,000         1,038
Loss/(gain) on sale of investment in affiliated             1,750   (5,728,489)
companies
Equity in net loss of affiliated companies                378,689       533,458
Equity of outside interests                             (207,921)       476,608
Change in working capital, net                          1,162,943     (489,640)

Net cash used in operating activities                    (93,976)     (288,697)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment             (1,088,006)     (285,336)
Proceeds from sale of investment in affiliated          1,483,329     8,361,050
companies
Proceeds from disposal of property, plant and              64,946        21,924
equipment
Investments in and advances to affiliated companies     (425,744)     (423,358)
(Increase)/decrease in long-term receivables            (694,521)       231,563
Increase in development properties                      (878,074)   (1,835,193)
Net cash from disposed subsidiaries                             -         (870)
Decrease in other and intangible assets                    27,017       357,393

Net cash (used in)/provided by investing activities   (1,511,053)     6,427,173

CASH FLOWS FROM FINANCING ACTIVITIES:
Expenses relating to issue of shares                            -         (224)
Payment of preferred cash dividends                      (72,000)      (73,017)
Issue of shares to outside interests by a subsidiary       12,475        19,342
Increase/(decrease) in loans and notes payable          4,262,010   (1,102,493)
Decrease in long-term debts                           (2,165,469)   (4,090,174)
Decrease in long-term liabilities and provisions      (1,093,954)   (1,935,773)

Net cash provided by /(used in)financing activities       943,062   (7,182,339)

NET DECREASE IN CASH
AND CASH EQUIVALENTS                                    (661,967)   (1,043,863)
CASH AND CASH EQUIVALENTS

Beginning of year                                       1,560,407     2,823,500

End of period                                             898,440     1,779,637

METRO PACIFIC CORPORATION (MPC) today reported an unaudited consolidated net
loss of Pesos 2.21 billion for the nine-month period ended September 30, 2001.
This compares with net income of Pesos 2.71 billion for the comparable period
last year. Recorded in 2000 was a one-time gain of Pesos 5.67 billion on the
disposal of MPC's interest in Philippine Long Distance Telephone Company
(PLDT) to First Pacific Company Limited.


Commenting on the nine-month results, MPC's Chairman, Manuel V. Pangilinan,
said: 'The one-time gain on the sale of MPC's interest in PLDT last year,
coupled with the cessation of revenue recognition in relation to Fort
Bonifacio's 1996 land sales, have contributed to MPC's year-on-year decline.
Metro Pacific has had a challenging year against a backdrop of a difficult
industry and economic environment. Nevertheless, we believe in the underlying
value of our assets and business. Our objective is to strengthen MPC's balance
sheet through focused and intense debt reduction efforts. To this end, we have
successfully refinanced BLC's debt, succeeded in securing land sales - most
notably the sale of the FBDC Compound - and continue to execute revenue
generating projects within our means. It is fully our intention to position
MPC to achieve this goal.'


For the 2001 period, increased revenues from Pacific Plaza Towers (PPT) were
offset by reduced contributions from Bonifacio Land Corporation (BLC) and,
accordingly, continuing operations recorded a loss of Pesos 2.41 billion
(2000: Pesos 2.17 billion).


Accounting for approximately 39% of MPC's total revenues, PPT's revenues grew
in the 2001 period by Pesos 255 million, to Pesos 2.13 billion (2000: Pesos
1.87 billion), as MPC's wholly-owned premier residential development continued
to achieve sales.


Consolidated revenues from 69.6%-owned subsidiary BLC declined to Pesos 1.25
billion (2000: Pesos 3.09 billion), following the completion of the horizontal
development of Big Delta in April 2000. Revenues representing Pesos 28.44
billion of land sales made in 1996 were recognized over the period of Big
Delta's development. By April 2000, when the project was completed on
schedule, all revenues and profits relating to these 1996 land sales had been
fully recognized. Accordingly, there were no 1996 land sale revenues
recognized in 2001.


Financing charges increased in the 2001 period to Pesos 1.61 billion (2000:
Pesos 895 million) as MPC's cost of borrowing increased with the refinancing
of its convertible bonds in April 2001.


MPC recorded lower provisioning in 2001, as the 2000 period included a
sizeable provision on investments in Negros Navigation Company, Inc. (Nenaco)
and affiliated companies. Foreign exchange losses declined in 2001 as a result
of the relatively slower depreciation of the peso over this period.


In September 2001, MPC rejected a proposal to acquire BLC's development rights
over an area of land known as the Northern Central Business District. Shortly
thereafter, in October 2001, MPC announced that, in line with its commitment
to reduce overall levels of debt, it was undertaking a comprehensive review of
all possible strategic options regarding its controlling interest in BLC. This
process is ongoing and is the latest in a number of MPC Group initiatives to
strengthen its balance sheet.


To date, these have included the successful restructuring of BLC's five-year
Convertible Long-Term Commercial Paper into a new Pesos 2.12 billion
fully-secured seven-year facility; FBDC's sale of a 2,173-square-meter lot for
Pesos 260 million and the signing of a memorandum of understanding for the
sale of an area known as the FBDC Compound for Pesos 2.5 billion. With a net
saleable area of 2.7 hectares, the sale of the FBDC Compound is expected to
close before the end of the year.


At today's meeting, the MPC board decided to withdraw its previous proposal of
30 June 2001 to dividend, to MPC shareholders, its interest in Nenaco. As
previously announced, the proposed dividend distribution of Nenaco was
conditional on MPC and Nenaco obtaining requisite approvals from creditors and
regulatory agencies. These approvals have not been obtained, hence the MPC
Board's decision.


The MPC Board also announced that it has accepted the request of its
President, Mr. Ricardo S. Pascua, to go on indefinite leave, and that MPC
Chairman, Mr. Manuel V. Pangilinan, would be assuming the responsibilities of
acting CEO. In addition, Mr. Edward A. Tortorici, Executive Director of First
Pacific, was appointed to the Metro Pacific Board. Mr. Tortorici will be
assisting Mr. Pangilinan with regard to on-going initiatives at Metro Pacific.
To further complement Metro Pacific's executive resources, two First Pacific
Group executives have been assigned to assist on Metro Pacific-related
matters.


REVIEW OF OPERATIONS


BONIFACIO LAND CORPORATION, in which MPC has a 69.6% interest, holds a 55%
interest in Fort Bonifacio Development Corporation (FBDC). For the nine-month
period ended September 30, 2001, FBDC achieved consolidated net earnings of
Pesos 140 million (2000: Pesos 1.04 billion), while consolidated revenues
totaled Pesos 1.25 billion (2000: Pesos 3.12 billion). These results primarily
are due to the completion of the horizontal development of Big Delta in April
2000 and resultant final recognition of all revenues and profits relating to
land sales made in 1996. Despite a sluggish real estate market, the sale of a
2,173-square-meter lot in the 25-hectare e-Square IT Park was concluded in
June and, more recently, the sale of the 2.7-hectare FBDC Compound which is
expected to close before year end. During the period, FBDC continued to pursue
other revenue-generating projects as evidenced by the following developments:


  * By the end of September 2001, 168 of Bonifacio Ridge's 288 units had
    been sold. The structure was topped off in July and the construction
    continues with the project now 36% complete.




  * Bonifacio StopOver, a gas plaza with fast foods and convenience outlets,
    was completed and commenced operations in October 2001. Given the
    tremendous success of Bonifacio StopOver, the respective Boards of BLC and
    FBDC have approved the expansion of this development to Bonifacio StopOver
    II.




  * Pier One, a fast-rising dining and entertainment establishment in Metro
    Manila, opened for business in September 2001 at Fort Square, the expanded
    retail and entertainment district of the Global City.




  * Hatchasia GlobalCity Center at e-Square IT Park was completed in
    September 2001 and is now 80% leased out. Fitting-out by tenants is now in
    progress.




  * The British School of Manila, in the City's University Park, opened in
    September 2001 for the school year 2001-02.




  * St Luke's Medical Center signed a 50-year lease agreement, in August
    2001, to locate a new 500-room hospital at the Bonifacio Global City.




  * MC Home Builders Depot, a one-stop shopping plaza for building
    construction materials and home furnishings, signed a 21-year lease
    agreement, in October 2001, for a 26,000 square-meter-area at 32nd Street,
    beside S&R Price.




PACIFIC PLAZA TOWERS (PPT), Metro Pacific's premier residential development in
the Global City, continues to sell units, bucking the trend of a lackluster
property market. As of the third quarter of this year, PPT has sold 302 units
of the development's 393 units. This puts PPT beyond its break-even point,
leaving only 91 units to be sold with a value of approximately Pesos 2.80
billion. Consolidated revenues of PPT for the nine-month period ended
September 30, 2001 totaled Pesos 2.13 billion (2000: Pesos 1.87 billion).


On the back of new-product launches in leisure farms, residential resorts and
memorial parks, LANDCO PACIFIC CORPORATION (Landco) posted consolidated
revenues of Pesos 310 million for the first nine months of 2001 (2000: Pesos
368 million), and contributed an operating profit before financing charges of
Pesos 57 million (2000: Pesos 118 million). Landco's financing charges
decreased significantly to Pesos 101 million (2000: Pesos 192 million) as MPC
agreed to convert its holdings of convertible bonds, plus capitalized interest
thereon, into equity.


Landco's current project initiatives include:


  * Leisure Farms in Tagaytay, the first agro-tourism community in the
    Philippines, which integrates residential resort features with high-value
    modern farming.




  * Terrazas de Punta Fuego, an exclusive seaside community in Nasugbu,
    Batangas, which is being developed in association with the Pedrosa family
    and Roxaco Land.




  * Landco Business Park project in Legazpi City, a joint venture with the
    Metro Gaisano Group of Cebu.




  * Forest Lake Memorial Parks projects in Davao City and Binan, Laguna.




For the nine-month period ended September 30, 2001, consolidated revenues of
NEGROS NAVIGATION COMPANY, INC. (Nenaco) improved 10% to Pesos 1.80 billion
(2000: Pesos 1.63 billion) on increased passenger and freight rates, partially
offset by a decline in passenger and cargo volumes, in line with the market
slowdown. Consolidated operating costs and expenses increased 5% to Pesos 1.57
billion (2000: Pesos 1.50 billion) as fuel costs increased, and further
improvements to Nenaco's systems and procedures were implemented. Nenaco
contributed a net operating income before financing charges of Pesos 17
million, compared with the Pesos 59 million net operating loss recorded in
2000.

Note: Unless stated otherwise, all quoted values relate to year-to-date 30
September activities.

By Order of the Board

First Pacific Company Limited

Manuel V. Pangilinan

Executive Chairman

Hong Kong, 28th November, 2001


Please also refer to the published version of this announcement in the South
China Morning Post (English) and Hong Kong Economic Journal (Chinese).


                                                                                
                                                                                
                                                                                

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