PSE Circular for Brokers No. 2443-99

September 29, 1999 PSE CIRCULAR FOR BROKERS NO. 2443-99 SMBHK NET PROFIT UP TO 351% San Miguel Brewery Hong Kong Limited (SMBHK), a subsidiary of San Miguel Corporation (SMC), registered a consolidated net profit of HK$45.0 million for the first eight months of 1999, an increase of 351% over the same period last year. These results reflect the performance of San Miguel's Brewery in Hong Kong, and two others in southern China- Guangzhou San Miguel Brewery Company Limited and San Miguel Shunde Brewery Company Limited. San Miguel's international beer operations registered operating profits starting the third quarter, after several years of continued losses. SMBHK's huge profit improvement, combined with the nine-fold increase in operating profits of SMC's operations in Indonesia (P.T. Delta DJakarta) contributed to the turnaround. Notably, P.T. Delta grew volumes by 35% despite the economic and political concerns in that country. SMBHK's board of directors approved on September 24, 1999 a cash dividend of HK$0.03 for an estimated total of HK$11.2 million. This will bring the total dividends for the year to date to HK$18.7 million. Against a backdrop of consumer price deflation and fierce beer competition in Hong Kong and southern China, SMBHK's domestic sales grew and operating profit jumped 158% due to lower production costs, streamlined organization and rationalized spending. The Hong Kong operations, with an operating profit of HK$42.0 million (vs. last year's operating loss of $4.5 million), contributed significantly to SMBHK's impressive consolidated performance. Total sales volume of the southern China breweries, likewise, showed a modest growth with local brands posting a 24% volume increase. Presently, San Miguel's top management is sharply focused on achieving major improvements in sales and distribution, volumes and capacity utilization in northern China and Vietnam.