PSE Circular for Brokers No. 326-99

February 23, 1999 PSE CIRCULAR FOR BROKERS NO. 326-99 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-l(b)(3) THEREUNDER 1. Date of Report: February 23, 1999 2. SEC Identification Number: 11840 3. BIR Tax Identification No.: 430-000-100-341 4. Name of registrant as specified in its charter: PURE FOODS CORPORATION 5. Province, country or other jurisdiction of incorporation:PHILIPPINES 6. Industry Classification Code (SEC Use Only): 7. Address of Principal Office: JMT Corporate Condominium, ADB Ave., Ortigas Center, Pasig City, Metro Manila 8. Registrant's telephone number, including area code: (632) 644-1010 9. Securities registered pursuant to Secs. 4 and 8 of the RSA: a. Authorized Capital Stock: P840,000,000.00 Title of Each Class (P10.00 par value) AUTHORIZED CAPITAL STOCK COMMON "A" per share 50,628,000 COMMON "B: 33,372,000 84,000,000 b. No. of Shares Outstanding as of 31 Dec., 1997 COMMON "A"' 38,132,713 COMMON "B" 22,573.827 60,706,540 c. Amount of Debt Outstanding as of Dec. 31, 1997 P5,227,906,000.00 (Total Current Liabilities) 10. Item Number reported herein: 10(b) Please see attached Press Release. PURE FOODS CORPORATION (SGD.) ATTY. DAVID R. HILARIO Vice President & Asst. Corp. Sec. Pure Foods Net Income Soars 500% to P 910 M Pure Foods Corporation, the food subsidiary of Ayala Corporation, today announced the results of its operations in 1998, reflecting an increase in revenues of 11.4% to P9.8 Billion from the previous year. More significantly, the 1998 net income registered a five-fold gain to P910.5 Million, from P157.5 Million in 1997. Of the P910.5 million net income, P234.9 million came from recurring operations, a 49% increase from last year's level. Pure Foods' businesses turned in creditable performances despite the recessionary aftermath of the Asian currency crisis. The 1998 earnings also included a one-time gain of P675.6 Million, derived from the spin-off of the Pure Foods Processed Meats Division into a newly-formed joint-venture company, known as The Purefoods-Hormel Company, with longtime partner Hormel Foods. Renato R. Montemayor, Pure Foods' president, credited the company's excellent performance to its sustained investments in consistently high-quality products and its responsiveness in meeting the changing needs of its many markets. Independent consumer surveys have shown that the Purefoods brand name is a virtual guarantee of excellence in food products. This was confirmed, five years in a row, when the prestigious Far Eastern Economic Review (FEER) survey of the leading companies in Asia recognized Pure Foods as among the top three companies ranked for high quality products in the Philippines. Leading the excellent performance in both peso and volume sales was the processed Meats Division, driven by market share growth in refrigerated meats. Purefoods hotdogs captured a market share of 51%, its highest in three years. Purefoods canned products, led by its corned beef, have also maintained a strong position in the market. The Poultry and Livestock Division posted a complete turnaround in its profitability and contributed significantly to the company's bottom-line. Selling prices of poultry products improved during the year as a result of better balance between supply and demand. Significant gains were also registered by Pure Foods' newly-founded operations, namely the Food Service Division, which caters to restaurants and institutional outlets (sales up by 20%), and Commercial Feeds, sales of which increased by 300%. cdlex 1998 likewise marked the first full year of operations of PhilKing Restaurant & Development Corporation, the exclusive Philippine franchise-holder of BURGER KING quick-service restaurants, and a three-way alliance among Pure Foods, RY LLC of Beverly Hills, and ELRO Industrial & Commercial Corp. Worldclass restaurant amenities, timely promotions. and competitive pricing, based on a value-for-money proposition, resulted in widespread consumer acceptance of the BURGER KING brand openings were accelerated to 11 from the targeted figure of 7, resulting in strategic gains in market share. The profits of another joint-venture, PT Sinar Pure Foods in Indonesia, in canned tuna also contributed to the year's solid performance. The Pure Foods Flour Division, now the country's largest milling concern, reflected lower turnover in both peso-sales and volume, as a result of a slowdown in demand in the first half of 1998 and a resulting adjustment in prices. An upswing in demand experienced in late 1998 was not sufficient, however, to bring results to previous years. The lower cost of wheat and the higher prices for bran and pollard, by-products of flour-milling, cushioned the effect of these adverse market conditions. LexLib