PSE Circular for Brokers No. 2751-99

October 27, 1999 PSE CIRCULAR FOR BROKERS NO. 2751-99 PRESS RELEASE La Tondena Doubles Income for First Nine Months La Tondena posted a net income of P708 million for the first nine months, more than double its income during the same period in 1998. This was achieved as a result of increased operating efficiencies and significant reduction in debt levels and interest expenses. Consolidated net sales amounted to P7.5 billion, representing an increase of 7% from P7 billion registered last year. With lower alcohol costs and better selling prices, operating income reached P1.6 billion, up 9%. Strong cash from operations enabled the Company to further reduce its debt by P328 million. Consequently, debt to equity ratio improved to 1.1 in September, from 1.4 in December 1998. The Company continued to strengthen its hold in Northern Philippines, with its flagship product Ginebra San Miguel posting moderate growth. However, over all liquor volume dipped by 1% as sales slackened in the South, Vino Kulafu sales were adversely affected as agricultural consumers suffered from tight copra supply. The Company expects a stronger presence in the South, however, following its successful launch of San Miguel Bravo Rum. Actual sales of this new product have thus far exceeded expectation. Following its acquisition of the Wilkins brand the Company improved its water volumes during the third quarter. Year-to-date volumes, however, are down by 4%. After posting significant growth last year, total water industry performance for 1999 remains flat. llcd Coming off volume shortfalls amid an overall industry decline in the second half, the Company's ready-to drink juice business experienced a turnaround during the third quarter. This growth was driven by strong sales of FunChum Juice. Newly-launched Magnolia Junior Juice is also showing encouraging results, with its Warner Bros.' Looney Toon marketing handle strong appealing to young children. La Tondena management continues to keep strong focus on increasing production efficiencies and cost effectiveness. The Company starts to benefit from ongoing centralization of support services by parent company San Miguel Corporation. The full implementation of the SAP, an information system that allows decision-making based on real time-date, provides added competitive advantage. Rigid testing on all hardware systems and software applications have been completed as of September, ensuring Y2K readiness at all levels in the organization. The Company announced a cash dividend of P0.375 per share payable on December 27; 1999 to all stockholders of record as of November 27, 1999.