PSE Circular for Brokers No. 050-98

February 5, 1998 PSE CIRCULAR FOR BROKERS NO. 050-98 Publicly-listed sugar manufacturer Central Azucarera Do Pedro (CADP) reported consolidated revenues of P2.23 billion for Crop Year 1996-1997, up from P1.90 billion the year before. Despite the adverse industry situation due to low raw and refined sugar prices arising from the glut that was prevalent for most part of the year, CADP managed to record a net income after tax amounting P191 million. This was down from P248 million the year before. "We were able to compensate for the significant drop in sugar prices by expanding production," CADP President Miguel Gaspar said. He added that the company strengthened its operations to improve manufacturing output and efficiencies by expanding its Nasugbu refinery's capacity and upgrading its mill and distribution facilities. CADP milled a record 1.5 million tons of cane, the highest recorded in the company's 70-year history and produced 146,863 metric tons of raw sugar. Raw sugar production jumped 25% from last year's 117,421 metric tons. cdpr The company realized an 18% growth in its refined sugar production, with an output of 3.9 million 50-kg bags of refined sugar this year from 3.3 million 50-kg bags last year. The increase is attributable to the expansion of its refinery plant's capacity to 17,000 tons per day. Additional investments were made to increase output of specially granulated sugar and other sugar grades, install bulk handling facilities for the distribution of refined sugar to end customers and commission new filling lines for its retail sugar product and one-ton bagging operations. Despite recent events that hounded the local sugar industry, and the prevailing economic difficulties, the company remains cautiously optimistic about business prospects. "The sugar market shall continue to grow in the medium to long-term in line with the increase in population and general improvement of the economy," said Gaspar. Based on the Sugar Regulatory Administration's (SRA) production bulletin, CADP ranked No. 1 and No. 2 in terms of refined and raw sugar production respectively for crop year 1996-97. Operating expenses minimally rose to P217 million from P206 million the previous year, reflecting cost-saving measures and increased efficiencies attributable to the modernization efforts undertaken by the company beginning 1990. Assets rose by 21% to P4.66 billion as of the end of the period in review, compared to last year's P3.84 billion. Property, plant and equipment contributed the biggest share at P2.90 billion, rising 20% from the previous year's P2.43 billion. Debt-to-equity ratio remains within conservative levels at P0.69:1.00. Stockholders equity totaled P2.76 billion, increasing 32% from P2.09 billion in 1995-96.