SM Prime Income Up 10%

August 11, 1999 PSE CIRCULAR FOR BROKERS NO. 1993-99 SM PRIME INCOME UP 10% SM Prime Holdings, Inc., the leader in mall development and operation, noted a net income of P1.42 billion for the six months ended June 30, 1999, an increase of 10% from last year's P1.29 billion. Revenues grew to P2.69 billion compared to the previous year's P2.57 billion. These results were achieved in the midst of the two-year old Asian financial crisis. Income from operations grew by 14% to P1.62 billion from last year's P1.43 billion. Interest and other income in the first semester declined 9% from P237.6 million to P216.2 million, due mainly to declining interest rates. However, operating expenses had improved as they were lower by 7% from P1.14 billion to P1.06 billion, achieved through cost-cutting measures and streamlining of operations instituted by management. Last June 11, 1999, the Company opened its 100,000 square meter SM City-Iloilo to a highly receptive market. By opening day, 70% of the mall space had been leased and 60% actually occupied and operating. SM City-Iloilo is the eighth operating mall, which brings SM Prime's total mall space to 1.4 million square meters. SM Prime is currently constructing its next two malls. SM City- Manila, a 170,000 square meter, seven-level mall, and SM City-Pampanga, a 55,000 square meter structure, are scheduled for opening in mid-2000 and late 2000, respectively. In addition, the country's leading mall chain is poised to expand aggressively as it plans to start constructing early next year a mall each in Paraaque, Davao, and Cagayan de Oro. In the same year, it will start constructing the first phase of the Mall of Asia in the reclaimed area fronting Manila Bay. At the same time SM Prime continues to look for potential sites for mall development in other areas of the country.