PSE Circular for Brokers No. 2545-98

November 6, 1998 PSE CIRCULAR FOR BROKERS NO. 2545-98 SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-1(b)(3) THEREUNDER 1. SEPTEMBER 30, 1998 Date of Report 2. SEC Identification Number 0000-88 3. BIR Tax Identification No. 003-058-789 4. SM PRIME HOLDINGS, INC. Exact name of registrant as specified in its charter 5. PHILIPPINES Province, country or other jurisdiction of incorporation 6. (SEC Use Only) Industry Classification Code 7. RM . 323, MSE BLDG., AYALA AVE., MKTI . 1226 Address of principal office Postal Code 8. (632) 892-7724; (632) 893-2762 Registrant's telephone number, including area code 9. RM . 323, MSE BLDG., AYALA AVE., MKTI . Former name of former address, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of shares of Common Stock Outstanding and Amount of Debt Outstanding COMMON STOCK, P1 PAR VALUE 9,935,294,157 11. Indicate the item numbers reported herein ITEM #9. LETTER B. SM Prime income increased by 22% SM Prime Holdings, Inc., the Philippines' leading shopping mall chain, posted a net income of P1,986.2 million in the first nine months ended September 30, 1998, a strong 22% growth over last year's net income of P1,624.2 million Revenues of P3,885.6 million were up 28% from P3,047.1 million in 1997. Third quarter results show revenues of P1,320.0 million, up a hefty 29% from last year's P1,024.6 million, and a net income of P696.5 million, an increase of 19% over the previous year's P586.9 million, in spite of the regional financial crisis. SM Prime's strong performance is due to the SM malls' low pricing policy and the completeness of merchandise and services the SM malls are known for. In addition, SM City-Bacoor in Cavite and SM City-Fairview in Quezon City, which opened in the second half of 1997 have been generating strong sales. Rental space has also been added through expansion in SM City-North Edsa. SM Prime is looking forward to an even stronger performance in the fourth quarter, with the coming Christmas season. Hefty sales are expected with the usual heavy consumer spending and the holidays' dollar remittances of overseas Filipino workers. Further, the dollar-denominated debt of the company is expected to improve in the fourth quarter with the appreciation of the foreign exchange rate from P43.81 to US$1 as of September 1998. The company's financial position continues to be strong with a cash balance of P10.6 billion as of September 30, 1998. LLpr In the meantime, the mall developer is strategically strengthening its position in the face of an economic recovery as it continues to develop more malls. The SM malls in Iloilo and Manila are expected to be completed in 1990. The next mall to mall to be built soon will be SM City-San Fernando in Pampanga.