Pryce Corp. sales up by almost 50%

July 20, 1999 PSE CIRCULAR FOR BROKERS NO. 1794-99 Press Release Pryce Corp . sales up by almost 50% Buoyed by the high growth performance of its gas subsidiary, Pryce Corporation reported consolidated sales revenues of P566.81 million for the first half of 1999, up by 49% from the P379.17 million recorded for the same period last year. The growth stems mainly from liquefied petroleum gas (LPG) sales which soared by 121% from the previous year's comparable figure. This development reflects the favorable impact of having four LPG terminals operational since the middle of last year enabling the company to directly import LPG at very competitive prices. A fifth terminal went on stream in May 1999 while eight refilling plants are either operational or under construction. Although the sale of industrial gases dipped by 5%, brought about by the continuing slump in certain industrial sectors using the product, there has been a perceived upturn in volume sales beginning in the later part of the first semester. LPG and industrial gases are product lines handled by Pryce Corp.'s subsidiary, Pryce Gases, Inc ., (PGI) which operates in the Visayas and Mindanao. PGI is 84% owned by Pryce Corp. The minority shareholders include Marubeni Corp. and the Lilia Clemente-managed Philippine Strategic Holdings. The International Finance Corporation (IFC) very recently released the first disbursement of its US$18 million facility for PGI, consisting of a US$3 million convertible-to-equity loan. LexLib Sales of real estate declined by 15.5%, a trend that reflects the performance of the industry generally. Interest and other income, the bulk of which consists of interest from in-house financing of real estate sales, expanded by 29%. Broken down by source, the company's consolidated sales were generated as follows: LPG, P340.5 million, industrial gases, P114.3 million; real estate, P43.0 million; and interest & other income, P69 million. It is noted that the bulk of Pryce Corp.'s revenues and income (80%) now comes from businesses with recurring sales, i.e., LPG and industrial gases and away from the volatile and cyclical real estate products like subdivisions and condominiums. This has effectively changed the character of the company. Moreover, property development is now focused on memorial parks which, by themselves, also provide recurring sales and income in the long run. Despite the mixed results in sales performance, the gross margins have remained at fairly high levels, reaching 38% for LPG, 54% for industrial gases, and 60% for real estate. Costs and expenses aggregated P460.68 million, resulting in an income before minority interest of P106.13 million. Minority interest is computed at P12.85 million, yielding a pre-tax net income of P93.28 million. This represents an increase of 21% from the previous year's comparable figure of P77.20 million.