PSE Circular for Brokers No. 1740-98

July 28, 1998 PSE CIRCULAR FOR BROKERS NO. 1740-98 Press Release Strong Second Quarter Boosts LTDI's First Semester Results In spite of continued economic adversity, La-Tondenia Distillers, Inc. performed strongly in the second quarter, posting double-digit growth in volumes, revenues and income. Interest expenses continued to be high, however, pulling down net income for the full semester. Lexlib Consolidated net sales reached P4.7 billion for the first half, 10% higher than the P4.25 billion posted during the same period last year. As the company kept a tighter rein on fixed expenses, operating income climbed by 24% from P739 million to P914 million. However, interest expenses soared by 120% from year-ago levels, causing net income to drop by 46% to P152 million. In a turnaround from the slowdown of the previous months, liquor volumes for the second quarter grew by 12%, compared to the same period last year. The favorable second quarter results wiped out the effects of the previous quarter's decline, resulting in half-year volumes at par with 1997. Riding on heightened liquor consumption brought about by seasonal demand, the company mounted an aggressive sales push accompanied by region-specific marketing activities. The company's bottled water business continued its robust growth in the first semester, with a 38% increase in volume compared to 1997 levels. This growth was led by PET products, which posted a tremendous 79% increase. In the five-gallon sector, sales increased by 15% even as aggressive price wars escalated among numerous refilling stations. aisadc Juice volumes also increased in the first half, up 59% from last year. This growth was attained despite the fact that the juice industry contracted by 11% in the second quarter, mainly on account of a series of price rollbacks in soft drinks. Stockholders of LTDI recently approved the amendment to the company's Articles of Incorporation providing for the issuance of convertible preferred shares with an aggregate value of up to P2 billion. This will allow LTDI to raise new equity and further pare down debt. cdt With its strong second quarter showing, the company is optimistic that it will outperform 1997 in its full year results.