EEI Corporation Earns P270m in 1998

April 8, 1999 PSE CIRCULAR FOR BROKERS NO. 702-99 EEI CORPORATION EARNS P270M IN 1998 Publicly-listed EEI Corporation reported today audited consolidated net income of P270 million in 1998. This is more than four times the P64 million net income it registered the previous year. EEI among the country's lending construction companies also reported that its gross revenues increased 27 percent to P7.53 billion compared to P5.93 billion in 1997 on the back of record-setting orders and contracts obtained and gross production during the year despite the adverse economic situation. LexLib "Despite the weak economy, we managed to post strong operating results as we continued to make significant inroads in the high-rise property and infrastructure construction market and maintained our leadership in industrial construction," company chairman and chief executive officer Rizalino S. Navarro said. EEI obtained orders of P8.5 billion during the period in review, thus closing the year with P8.40 billion in orders backlog. The backlog, which represents the value of projects that have yet to be completed in EEI's order book, is equivalent to about 12-month production of the company. Navarro explained that EEI's robust orderbook reflects the continuing confidence of customers and international principals in its capability to deliver quality, on-time projects. He added that EEI has had many ( Illegible portion in Philippine Stock Exchange file ) of business relations with global players, such as Mitsubishi Heavy Industries, GEC ( illegible portion in Philippine Stock Exchange File ) Sumitomo, Black & Veatch, and Flour-Daniel, which it had been able to leverage to ( Illegible portion in Philippine Stock Exchange File ) construction jobs here in the Philippines and abroad. Construction Division obtained new orders and contracts worth P6.71 billion in 1998, while that of Machinery Division totaled P1 billion. Subsidiaries contributed the balance of P833 million. The company realized foreign exchange gains due from its foreign currency-denominated projects. principally overseas project and domestic construction work acquired from international contractors. This offset debt service cost and inflationary cost increases arising from the depreciation of the peso during the middle part of the year. Total assets increased 6% to P7.94 billion, while stockholders' equity totaled P2.69 billion at the end of 1998. Net long term debt declined 19% to P672 million. LLphil Even before the onset of the financial turmoil, we have decided to hedge against potential forex instability by contracting projects in foreign currency for international and local projects awarded by foreign general contractors," Navarro noted. EEI's global business network and its wide international contracting experience also enabled it to acquire a US$40 million contract for the 4 x 600 megawatt Ghazlan Power Plant in Saudi Arabia through its joint venture company, Al-Rushaic Construction Corporation. The project was awarded by the consortium of Mitsubishi Heavy Industries and Bechtel Overseas Corporation. Al-Rushaid also obtained a $12.5 million contract for the construction of a debottle-necking facility in ARAMCO's Shedgum Gas Plant in Shedgum, Saudi Arabia. The project, awarded by Pritchard Black & Veatch of the United States, involves the construction of furnaces, gas separator columns and other structures for this natural gas production facility. EEI's construction group obtained new high-rise projects during the year. These were the superstructure construction of the RCBC Plaza through its joint venture company, ECWJV Inc., the general contract for The Linden Suites project in the Ortigas business district and various construction packages of the 38-storey Robinsons Place Residences twin tower and shopping complex. Construction of the Philamlife Tower and the Pacific Plaza Twin Towers, meanwhile, proceeded on schedule. Navarro said that EEI will emphasize productivity and financial conservatism in 1999 in the light of the lingering financial volatility and weakness in the Philippine economy. He added that the company's thrust is to strengthen its balance sheet and build up financial resources in its drive to expand its leadership position in the Philippine construction industry.