PSE Circular for Brokers No. 1879-99

July 29, 1999 PSE CIRCULAR FOR BROKERS NO. 1879-99 Press Release La Tondea Triples First Semester Income La Tondea Distillers, Inc. (LTDI) registered a net income of P434 million for the first six months, nearly three times the previous year's record of P152 million. This strong showing was attributed to increased liquor volumes, higher selling prices and significant reduction in debt levels and interest expenses. Consolidated net sales rose by 9 per cent from P4.6 billion to P5.03 billion. As the price of raw alcohol decreased, the company's operating income improved by 14 per cent. The Company's liquor business performed strongly in the second quarter, with a 9 per cent increase in volume, offsetting the first quarter decline. The increase in consumption was fueled by the excitement created by the highly popular Barangay Ginebra campaign and the introduction of Ginebra Blue, the first-ever flavor variant for the 165-year old product. LLphil In the Company's water and juice businesses, volumes were lower compared to year-ago levels. Record volumes for water had been achieved in 1998 as consumer spending was enlivened by the centennial and election campaign. The Company expects better volumes in the second semester, especially with its newly-launched juice products and more competitive trade deals. La Tondea's acquisition of Metro Bottled Water Corporation (MBWC) last June provide wide avenues of growth in its bottled water business. With the combined strength of VIVA Mineral Water and Wilkins Distilled Water, La Tondea now dominates the retail bottled water market, selling four times more than its closest competitor. Last May, the Company finalized the issuance of P1 billion worth of convertible preferred shares to BancAmerica and Orchid Asia. With an aggregate 8.4 per cent equity, these international institutions are now the second largest LTDI shareholders. Majority shareholder San Miguel Corporation also invested P1 billion in convertible preferred shares. Given its strong cash flows, La Tondea has been able to reduce its debt to manageable levels, retiring as much as P2.2 billion in 1999. During the first six months this year, it retired another P544 million in debt. These initiatives have translated to much lower interest expenses and, consequently, higher profits for the Company. The Company recently announced a dividend per share of P0.375 to be paid on September 28 to stockholders on record as of August 27, 1999.