PSE Circular for Brokers No. 312-99

February 22, 1999 PSE CIRCULAR FOR BROKERS NO. 312-99 February 16, 1999 SECURITIES & EXCHANGE COMMISSION FORM 11-C STENIEL MANUFACTURING CORPORATION Current Report Pursuant to Section 11(c) of the Revised Securities Act ("RSA") and RSA Rule 11(a)-1(b) (3) Thereunder 1. Date of Report 19 February 1999 2. SEC Identification Number 23736 3. BIR Tax Identification Number 000-099-128 4. Registrant Steniel Manufacturing Corporation 5. Country of Incorporation Philippines 6. Industry Classification Code 7. Address of Principal Office Gateway Business Park, Javalera, Gen. Trias, Cavite 8. Registrant's Telephone Number (43) 433-0026 9. The Registrant has not changed its corporate name, office address, telephone number and fiscal year since its last report. 10. Securities registered pursuant to Sections 4 and 8 of the RSA: Title of class Numbers of shares outstanding Common shares 876,182,045 * * Reported by the stock transfer agent as of 31 January 1999. STENIEL ANNOUNCES 1998 RESULTS Steniel Manufacturing Corporation ("Steniel"), the holding company for the packaging interest of Metro Pacific Corporation, announced today a consolidated not income for the year ended 31 December 1998 of Pesos 146 million, compared to a net loss of Pesos 396 million for last year. LexLib Financial Review Consolidated sales increased by 15 per cent to Pesos 2.914 million in 1998 from Pesos 2,535 in 1997. This increase resulted mainly from the substantial volume tie growth registered in the Cagayan de Oro and Cebu corrugated carton operations, in addition to price increases that were necessitated throughout the Group by the continuing devaluation of the Peso. The consolidated gross profit improved from Pesos 335 million in 1997 to Pesos 489 million in the current year while income from operations increased from Pesos 36 million in 1996 to Pesos 149 million in 1998. These, developments were led by the corrugated packaging division, where significant improvements were reported despite the continuing difficulties in the economy. The sustained benefits of the Integration of the manufacturing operations in Luzon in 1997, in addition to the improved manufacturing efficiencies and the reduced operating costs throughout the Group, contributed to better operating results this year. Operating expenses as a percentage of sales improved modestly to 11 per cent in 1998 from 12 per cent last year, due mainly to expanded revenues for the period. Total operating expenses, in absolute terms, increased slightly compared to the previous year, as reductions in fixed overhead expenses were offset by higher freight and delivery charges. The Grouping's financing charges increased from Pesos 193 million in 1997 to Peso 291 million in 1993. The conversion of dollar denominated loans in 1997 resulted in higher interest cost this year. As a consequence, however, foreign exchange losses decreased significantly, from Pesos 283 million in 1997 to Pesos 12 million in 1998. Steniel divested its 60% ownership in Starpack Philippines Corporation ("Starpack") for Pesos 700 in December 1998, resulting in a gain of Pesos 266 million. The proceeds from the scale were used mainly to reduce borrowings from banks and affiliates. LLjur Metron as Packaging Products Corporation ("Metroplas") operates in a niche market in the manufacture of rigid plastic containers. Metroplas was able to maintain its revenue level in 1998 despite the competition in the rigid plastic business. The delay in the completion of the company's PET bottle project due to financial difficulties, in addition to the current crisis, however, affected adversely the company's performance in the current year. The corrugated packaging operates three facilities in Cavite Cebu and Cagayan de Oro, is establishing a new plant in Davao to further enhance its dominance nationwide. The Davao plant is anchored an the fresh fruit box business in Mindanao and is expected to be operational by the end of first quarter of 1999. This new facility an estimated annual capacity of 40,000 metric tons, and will be equipped with a corrugator and two converting machines. Financial Condition Total consolidated assets decreased from Pesos 3,694 in 1997 to Pesos 2,738 in, 1998 principally because of the divestment of the flexible business. Total consolidated equity, however, increased from Pesos 1,245 at 31 December 1997 to Pesos 1,391 at 31 December 1998. cdll Cash flows remained positive for the year Operating activities provided Pesos 514 million generally as a result of better terms with suppliers. These, enabled the company to finance the receivables and inventories. The proceeds from the sale of Starpack was used mainly for the Group's debt servicing requirements. Summary and Prospects Commenting on the results, Napoleon L. Nazareno president, and CEO of Steniel stated that: "The outlook for Steniel looks satisfactory, as the Group reported significant improvements in income from operations. The management team extended significant efforts during the year to sustain the benefits of the integration of operations in Luzon and continually improve continually production efficiencies throughout the entire Group. The improvements in gross margins and management's conscious efforts to control costs and expenses are encouraging. In addition, the expansion of Steniel in Davao reaffirms the Group's dominance and leadership in the industry. These should help bring about an improved performance for the group, in the light of challenging economic conditions and weak consumer demand." February 19, 1999 11. Item number reported herein: 9 other items Please refer to the attached Press Release SIGNATURES 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 hereto duly authorized. cdt Steniel Manufacturing Corporation By: (SGD.) IAN WILSON