PSE Circular for Brokers No. 306-99

February 19, 1999 PSE CIRCULAR FOR BROKERS NO. 306-99 NEWS RELEASE RFM CORPORATION February 18, 1999 RFM NET INCOME SURGED TO P 924 MILLION, UP 48% IN 1998 Food and beverage giant RFM Corporation reported a 48% jump in net income in 1998 over 1997. Consolidated Net income reached P924 million. Consolidated net sales amounted to P19 billion, which is a 16% increase from P16.2 billion posted in 1997. LLpr RFM officials attribute its solid performance in 1998 to the resiliency of demand for its food and beverage products, especially for chicken, meat, softdrinks, and juices, with volumes expectedly stronger during the last quarter. RFM President and CEO Jose A. Concepcion III said that the company's performance is a reflection of its capability to grow even during difficult times. "We have always believed that ours is one of the best sectors to invest in during an economic slowdown since most consumers will trade down to items that serve basic needs. Food and beverage products are among those items. And with our value-for-money positioning, consumers naturally shifted to or increasingly patronized our products, " Concepcion said. "It also helped that consumer have become more confident of the country's ability to recover from the crisis. This growing optimism translated to higher spending and for business, higher sales." Cosmos Bottling Corporation again led all other RFM subsidiaries in terms of income contribution, posting P560 million in net income after tax, up from P508 million in 1997. "With its low cost operating structure, Cosmos has been able to sustain its value-for-money with strategy, with minimal price increases in November, after 4 years of unchanged prices. We were not surprised that volume grew solidly by 27% over 1997," Concepcion said. The RFM chief expects to surpass its impressive 1998 performance, with record sales both in the domestic and exports markets towards the end of 1999, as the world celebrates the turn-of-the-millennium. "Like the rest of the world, the Philippines will be spending heavily for all the partying in anticipation of the Year 2000. If this Christmas season was good, you can imagine what the Christmas and New Year holidays in year-end 1999 will be. There will be celebration all over." cdlex Looking at longer-term prospects, Concepcion explains that "Our thrust is to become the country's largest food and beverage company, catering mainly to the mass-based market. Our products' value-positioning serves well this market segment, which we believe will continue to grow immensely in terms of market size in the coming years." "To be able to sustain this value strategy, we have to continue managing our cost down. This is the Primary reason why we are relentlessly pursuing talks with potential strategic partners who are considered global players in the food and beverage industry Any strategic alliance that will be formed should also help us. improve operational efficiencies that can help keep our prices very competitive. LLjur RFM earlier signed the Share Purchase Agreement leading to the 50-50 joint venture between Selecta and Unilever. RFM is also talking to potential JV partners for its other subsidiaries. SIGNATURE Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned here unto duly authorized. RFM Corporation Registrant (SGD.) BJ SEBASTIAN SVP-Chief Planning Officer * Print name and title of the signing officer under the signature.