First Pacific 2001 results

RNS Number:3294S
First Pacific Capital (1997) Ld
4 March 2002

FIRST PACIFIC COMPANY LIMITED

PRESS RELEASE

Monday, 4 March 2002

FIRST PACIFIC RECORDS US$1.8 BILLION LOSS, REFLECTING PREVIOUSLY ANNOUNCED
PROVISIONING

Earnings from current investments up 13%; Convertible Bond repayment now fully
funded


First Pacific today reported a US$1.8 billion (HK$14.0 billion) attributable
loss for the year 2001, reflecting previously announced impairment provisions of
US$1.7 billion (HK$13.3 billion), and losses on disposals totaling US$108.7
million (HK$847.9 million).


Contribution from continuing businesses was up 13 per cent at US$61.0 million
(HK$475.8 million), while recurring profit was down 13 per cent to US$44.6
million (HK$347.9 million) reflecting the absence of contributions from disposed
businesses.


Commenting on the results Manuel V. Pangilinan, Executive Chairman of First
Pacific said: "2001 was a year of challenges for First Pacific during which we
conclusively addressed a number of issues relating to Head Office debt and the
Group's balance sheet. Our response to these challenges has very much shaped our
financial results, with the US$1.7 billion (HK$13.3 billion) asset impairment
provision being of particular relevance. This was necessary and prudent; it
better aligns First Pacific's book values with market values at this point in
time, and the more realistic values afford a basis for sensible financial
performance measures going forward.


"We have also fully funded the repayment of First Pacific's convertible bonds,
having summarily effected the necessary sales of non-core assets and raised new
debt in order to conclude this. In addition, our remaining businesses have
returned improved contributions - up 13 per cent - and we have continued to take
the necessary steps to reduce Head Office costs. When viewed in its totality,
2001 was a year of achievement and progress."


Impairment provisioning

During the course of 2001, First Pacific management continuously - and
diligently - reviewed the book values of its investments. There had been a
continued and substantial decline in regional currencies since First Pacific
first invested in the Philippines and Indonesia, and equity values in those
countries also had been adversely affected by the associated country risks.
Moreover, MPC's investment in BLC had been significantly and adversely affected
by the protracted decline in the Philippine property market. The result was that
the book values of First Pacific's investments were significantly higher than
the market value. Accordingly, First Pacific at year-end made the decision to
make provisions, against these investments, that reflect the most pessimistic
view of regional asset values at this point in time.


Such provisions are non-cash in nature and affect neither First Pacific's sound
financial position, nor the long-term growth potential of its principal
investments. As a consequence of the provisions, the carrying values of MPC,
PLDT and Indofood have been written down by US$745.1 million (HK$5.8 billion),
US$565.8 million (HK$4.4 billion) and US$299.6 million (HK$2.3 billion),
respectively. The revised carrying values for MPC, PLDT and Indofood are US$98.2
million (HK$766.0 million), US$559.3 million (HK$4.4 billion) and US$506.6
million (HK$4.0 billion), respectively, and represent the lower end of their
respective estimated value ranges as at the year end 31 December 2001. In
addition, First Pacific has recorded a US$100.0 million (HK$780.0 million)
general risk provision.


The total US$1.7 billion (HK$13.3 billion) provision comprised impairments
relating to goodwill of US$874.0 million (HK$6.8 billion), foreign exchange of
US$264.0 million (HK$2.0 billion) and net tangible assets of US$572.5 million
(HK$4.5 billion).


Mr. Pangilinan commented: "There is still inherent value in the significant
shareholdings that First Pacific holds in these investments and I believe there
is still excellent potential for long-term value development. Indeed, more
realistic values afford the basis for sensible financial performance measures
going forward and, being non-cash accounting allocations, the provisions have no
impact on First Pacific's fundamentally sound financial position."


Convertible bonds; new debt; asset disposals

In March 1997, US$350.0 million (HK$2.7 billion) of five-year convertible bonds
were issued by First Pacific Capital (1997) Limited, a wholly owned subsidiary
of First Pacific, at a coupon rate of 2 per cent. These bonds are due for
repayment on 27 March 2002. At 31 December 2000, convertible bonds in the
principal amount of US$267.9 million (HK$2.1 billion) were outstanding, and
redeemable at a total cost of US$367.3 million (HK$2.9 billion), including
redemption premium and accrued interest.


In October 2001 First Pacific utilized cash on hand to cancel US$20.1 million
(HK$156.8 million) of principal outstanding at a total cost of US$25.5 million
(HK$198.9 million). Thereafter, to facilitate the convertible bonds repayment,
First Pacific expeditiously arranged the timely sales of two non-core
businesses, Berli Jucker and Darya-Varia, which were sold for US$125.0 million
(HK$975.0 million) and US$35.0 million (HK$273.0 million), respectively, in
December 2001. Previously, in March 2001, First Pacific disposed of its entire
interest in non-core Savills plc for £29.4 million (US$41.6 million HK$324.5
million).


In addition, for the purpose of repaying the convertible bonds, First Pacific
secured a HK$1.56 billion (US$200.0 million), two-year term loan facility from
ING Bank NV in November 2001.


Through a combination of cash and new debt, a further US$117.3 million (HK$914.9
million) of principal outstanding was canceled in January 2002, at a total cost
of US$157.5 million (HK$1.2 billion). Having canceled all of the convertible
bonds available from the market, First Pacific then deposited, on 31 January
2002, sufficient funds, with the appointed trustee of the convertible bonds, for
the purpose of redeeming, in full upon maturity on 27 March 2002, all of the
US$130.5 million (HK$1.0 billion) convertible bonds that remained outstanding at
a total cost of US$176.3 million (HK$1.4 billion), including redemption premium
and accrued interest.


This concludes the early repayment of First Pacific's convertible bonds and,
through this process, First Pacific drew down HK$1.48 billion (US$190.0 million)
of the new ING Bank NV facility, in accordance with the facility's terms.


"The convertible bonds repayment has been central to management's focus
throughout 2001," commented Mr. Pangilinan. "Late in the year, we recognized the
need to make asset disposals and set about efficiently and swiftly concluding
the disposals of Berli Jucker and Darya-Varia, both at premiums to market.
Through these sales and the new debt facility, First Pacific had sufficient
resources with which to settle its convertible bonds on maturity in March 2002.
However, when it became evident that MPC would not be able to repay the Larouge
loan, we decided to effect early repayment of the convertible bonds in order to
allay investor concerns."


Larouge loan

In April 2001, Larouge, a wholly owned subsidiary of First Pacific, advanced to
MPC a US$90.0 million (HK$702.0 million) loan under terms and conditions
approved by First Pacific's shareholders. The Larouge loan is secured by a
pledge over BLC shares, that the MPC Group owns, representing approximately 50.4
per cent of the issued share capital of BLC. BLC is a 55.0 per cent shareholder
in a joint venture project with the Philippine Government that commenced, in
1995, the re-development of a 155-hectare part of a new Metro Manila central
business district, the Bonifacio Global City, which previously was a Philippine
military base.


The Larouge loan was due and payable in October 2001; however, the repayment
deadline was extended to 31 December 2001 in light of MPC's decision to offer
for sale its entire 69.6 per cent interest in BLC. At that time, MPC intended to
repay the loan with proceeds from the sale of its controlling interest in BLC.


However, due to the continued depressed real estate values in the Philippines,
MPC has not yet been able to conclude such a sale and, in January 2002, advised
First Pacific that it was unable to repay the outstanding loan and interest.
First Pacific is now a senior secured creditor and has undertaken to co-manage
with MPC the ongoing sale of MPC's 69.6 per cent controlling interest in BLC. In
the event of a sale agreement being reached, First Pacific will offer its 50.4
per cent secured interest in BLC as part of any sale.


MPC has recently announced its intention to implement a debt reduction plan
which may include the sale of assets, discussions with creditors for extended
interest and principal repayment grace periods, the conversion of short term
loans into longer term facilities and the conversion of certain debts into MPC
subsidiary equity. While the sale of BLC is ongoing as this remains a debt
reduction option, MPC intends to focus on enhancing and realizing the values of
its investments in the Bonifacio Global City.


As of today, none of Metro Pacific's liabilities are guaranteed by First
Pacific, which itself remains a secured creditor of Metro Pacific. First Pacific
will not infuse any additional funds into Metro Pacific as part of Metro
Pacific's proposed debt reduction plan.


Operations

First Pacific's impairment provisions, consistent with First Pacific's prudent
and conservative approach to financial reporting, have significantly affected
the 2001 results. A fundamental component of the 13 per cent year-on-year
decline in recurring profit, to US$44.6 million (HK$347.9 million), has been the
absence of contributions from disposed businesses, in particular First Pacific
Bank which was sold in December 2000 and which contributed US$13.9 million
(HK$108.4 million) to earnings in 2000.


Net contribution from First Pacific's remaining businesses - PLDT, Indofood,
MPC, Escotel and Infrontier - is up 13 per cent as First Pacific's telecom
interests, in particular, returned improved contributions. PLDT's contribution
increased to US$42.8 million (HK$333.8 million) (2000: US$16.6 million HK$129.5
million), while Escotel reduced its losses to US$6.2 million (HK$48.4 million)
(2000: Loss of US$11.8 million HK$92.0 million). Contribution from Indofood,
First Pacific's consumer interest, declined 14 per cent to US$48.1 million
(HK$375.2 million) (2000: US$55.7 million HK$434.5 million) amidst a challenging
market environment and declining rupiah, while a continuously weak Philippine
real estate market, and the completion of key projects, spurred the increase in
MPC's loss to US$14.6 million (HK$113.9 million) (2000: Loss of US$6.4 million
HK$49.9 million). Infrontier, First Pacific's business solutions provider,
returned a loss of US$9.1 million (HK$71.0 million) in its first year of
operation.


Commenting on First Pacific's operations, Mr. Pangilinan said: "The year 2001
saw PLDT triple its peso net income to Pesos 3.4 billion (2000: Pesos 1.1
billion) while retaining a strong consolidated EBITDA margin of 53 per cent. Its
cellular businesses, Smart and Piltel, are market leaders and, between them,
closed 2001 with 6.4 million subscribers, up 81 per cent year on year. Escotel,
First Pacific's telecoms interest in India, achieved monthly breakeven in 2001
and by year-end had grown its subscriber base by 54 per cent to 441,504
subscribers, accounting for more than eight per cent of India's cellular market.


"Indofood had a challenging year but, notwithstanding this, returned a
respectable 15 per cent growth in rupiah-denominated net sales and net income.
Margins were under pressure as the rupiah depreciated, local fuel and transport
costs grew, and competition intensified. However, Indofood has learned from, and
initiated improvements in response to these challenges and is poised for a
better 2002. In addition, reflecting its strong cash flows, during 2001 Indofood
paid off US$200 million (HK$1.6 billion) of debt, paid a dividend of 25 per cent
(Rupiah 18 per share) and continued with its share buy-back program."


Outlook

"The resolution of MPC's debt and operational issues is a top priority for the
Group," said Mr. Pangilinan. "To lead these efforts, I have assumed the roles of
President and CEO and Mr. Edward Tortorici, Executive Director of First Pacific,
has been appointed to MPC's board. Mr. Augie Palisoc Jr., formerly of Berli
Jucker, has been appointed to advise MPC. We are confident that MPC will present
its creditors with a viable business plan which, in conjunction with MPC's debt
restructuring exercise, will eliminate concerns about MPC's future business
prospects.


"At the First Pacific level, we will continue to apply our core principle of
actively managing investments - with the events of 2001 having sharpened this
focus - to grow the capital and/or income value of our underlying businesses.
Such enhancements are necessary to grow value for shareholders at the subsidiary
level and to afford First Pacific the leverage capability it needs to return to
creating and extracting value for shareholders at the First Pacific level as
well."


There follows an overview of the performances of each of the Group's operating
companies:


PT Indofood Sukses Makmur Tbk is the leading processed-foods group in Indonesia.
It is based in Jakarta, and is listed on the Jakarta and Surabaya stock
exchanges. The principal businesses of Indofood are Instant Noodles, Flour and
Edible Oils & Fats, and it also has interests in Snack Foods, Baby Foods, Food
Seasonings and Distribution. First Pacific held a 48.7 per cent economic
interest in Indofood at 31 December 2001 which, as a consequence of Indofood's
continuing share buy back program, has now increased to 49.2 per cent. Further
information on Indofood can be found at http://www.indofood.co.id/.


Indofood contributed a profit of US$48.1 million (HK$375.2 million) (2000:
US$55.7 million HK$434.5 million), positioning Indofood as the largest
contributor to Group profits. Indofood's net sales revenue increased by 15 per
cent to Rupiah 14.6 trillion (US$1,414.9 million HK$11.0 billion), against
Rupiah 12.7 trillion (US$1,490.3 million HK$11.6 billion) recorded in 2000. All
of Indofood's divisions recorded increased sales revenues, with the exception of
Baby Foods which did not record comparable aid-related sales in 2001. Indofood's
principal divisions of Noodles, Flour and Edible Oils & Fats recorded growth of
11 per cent, 29 per cent and four per cent, respectively, in rupiah terms.


During the year the rupiah declined to 10,400 against the U.S. dollar in
December 2001, from 9,650 at the start of 2001. This resulted in increasing the
costs of imported U.S. dollar denominated raw materials - principally wheat,
packaging materials and fuel oil - thereby eroding Indofood's gross margin to
26.4 per cent (2000: 29.4 per cent). Despite this, Indofood's gross profit
improved by three per cent to Rupiah 3.9 trillion (US$0.4 billion HK$3.1
billion). Increased transportation and salary costs contributed to the decline
in Indofood's rupiah operating margin to 13.9 per cent (2000: 18.9 per cent).


Despite the contraction in operating profit, Indofood's reported rupiah net
income grew by 15 per cent to Rupiah 746.3 billion (US$72.5 million HK$565.5
million) principally because of lower foreign exchange losses due to lower
balances of U.S. dollar denominated debt. Indofood continued to generate strong
cash flows, recording EBITDA of US$232.9 million (HK$1.8 billion) - equivalent
to US$19 million (HK$148.2 million) per month - in 2001. This enabled Indofood
to repay some US$200 million (HK$1.6 billion) of debt during the year, thereby
improving Indofood's debt to equity ratio to 1.6 times (2000: 2.1 times) and its
net gearing ratio to 1.3 times (2000: 1.5 times).


Philippine Long Distance Telephone Company is the leading telecommunications
provider in the Philippines. Through its three principal business groups - Fixed
Line, Wireless and Information and Communications Technology - PLDT offers a
wide range of telecommunications services across the country's most extensive
fiber optic backbone, fixed line and cellular network. PLDT is based and listed
in Manila, and has ADRs listed on the New York Stock Exchange and the Pacific
Exchange located in San Francisco, California. First Pacific holds an economic
interest of 24.4 per cent, and a voting interest of 31.5 per cent in PLDT.
Further information on PLDT can be found at http://www.pldt.com.ph/.


PLDT's contribution grew by 67 per cent to US$42.8 million (HK$333.8 million)
(2000: US$16.6 million HK$129.5 million), as PLDT's Wireless business turned a
year 2000 operating loss of Pesos 3.5 billion (US$79.2 million HK$617.8 million)
into a 2001 operating income of Pesos 2.9 billion (US$56.6 million HK$441.5
million).


Cellular, which accounts for 96 per cent of the total revenues of Wireless,
fuelled the recovery and growth of this segment, principally through the 75 per
cent gain in cellular revenues from Smart. Underpinning this was strong
subscriber growth as Smart closed the year with 4.9 million (2000: 2.9 million)
subscribers while Piltel, reseller of Smart's GSM service under its Talk 'N Text
brand, closed with 1.5 million (2000: 0.7 million) subscribers. Over the year,
Smart and Piltel more than doubled their combined GSM subscriber base to almost
six million (2000: 2.7 million), with Piltel growing its Talk 'N Text subscriber
base to 1.3 million subscribers, from 0.4 million subscribers one year ago.


Subscriber growth has been driven in part by the phenomenal growth of the
Philippines' cellular phone culture and, in particular, the popularity of SMS,
or text messaging, as a preferred means of communicating. During 2001, 12.3
billion (2000: 3.9 billion) outgoing messages were sent over Smart's network,
which translates to 33.8 million messages per day during 2001. The ratio of text
to voice calls now stands at nine text to one voice, and SMS revenues have risen
accordingly to Pesos 6.2 billion (US$121.5 million HK$947.7 million) in 2001.


Fixed Line, PLDT's foundation business segment, recorded respectable growth
despite the phenomenal success of Cellular, subscribers of which now outnumber
Fixed Line subscribers by three to one. Fixed Line revenues reached Pesos 46.9
billion (US$918.4 million HK$7.2 billion) in 2001, up two per cent, with growth
largely from Local Exchange and Data services which, together, make up 56.8 per
cent of Fixed Line revenues.


Local Exchange benefited from the increase in the average number of billed lines
in service and currency linked adjustments, while Data services continued to
expand its range of services which resulted in a corresponding growth in
revenues. Revenues from Data, which is PLDT's fastest growth segment, continue
to grow in size and significance and now represent 10 per cent of total Fixed
Line revenues.


Fixed Line's International and National Long Distance businesses have returned
weaker results in 2001. Despite inbound international minutes improving 18 per
cent, declining international settlement rates eroded revenues. Outbound call
volumes grew by 20 per cent, however revenues declined on lower prices. National
Long Distance revenues were adversely affected by lower call volumes, which have
been negatively impacted by alternate means of communicating, and price
reductions introduced to encourage use.


PLDT's Information and Communications Technology interests are operated through
ePLDT, a wholly owned subsidiary of PLDT. A recently formed entity, ePLDT is in
its nascent stage of development and is currently loss making. However ePLDT
continues to roll out its services such that revenues, while modest in absolute
terms, have almost doubled over 2001 and now contribute almost one per cent of
PLDT's operating revenues.


During 2001 PLDT undertook a series of liability management initiatives designed
to address its maturing debts. Between 2002 and 2004 PLDT has US$1.3 billion
(HK$10.1 billion) of debt obligations maturing of which approximately half will
be serviced through internally generated cash flows. To this end, PLDT pared
back capex spend to Pesos 9.7 billion (US$190.0 million HK$1.5 billion) and has
reduced cash spend over successive quarters. These cost containment initiatives
will continue, and PLDT is in on-going discussions with lenders, having recently
secured a US$149.0 million (HK$1.2 billion) facility from Kreditanstalt fur
Wiederaufbau (KfW) of Germany.


Metro Pacific Corporation, which is based and separately listed in Manila, has
interests principally in Property (Bonifacio Land Corporation, Landco Pacific
and Pacific Plaza Towers). The First Pacific Group holds an economic interest of
80.6 per cent. Further information on Metro Pacific can be found at http://
www.metropacific.com/.


Metro Pacific recorded a loss of US$14.6 million (HK$113.9 million), against a
loss of US$6.4 million (HK$49.9 million) in 2000, reflecting a depressed
Philippine real estate market and the completion of Big Delta, prompting the
recognition in April 2000 of the remaining revenues and profits from prior land
sales.


Bonifacio Land concluded two land sales in 2001, however these were insufficient
to generate comparable revenues to those recognized over recent years over the
development of Big Delta. Toward the end of 2001, agreement was reached on the
sale of a five-hectare area, adjacent to the Manila Golf Course, for Pesos 2.5
billion, with the site earmarked for mixed-use development. This sale was
concluded in early 2002. The Bonifacio Stopover and HatchAsia developments were
both completed and occupied during the year, and lease agreements were made with
new Global City locators, most notably a 50-year lease with St. Luke's to build
a medical complex.


There was continued interest in Pacific Plaza Towers, Metro Pacific's signature
residential project in the Bonifacio Global City, with cumulative sales reaching
293 units by year-end (2000: 220 units). However, a depressed property market
put Pacific Plaza Towers' margins under pressure. Landco Pacific improved its
turnover as its Punta Fuego luxury development was completed and sold, however
the property market conditions also contributed to the erosion of Landco
Pacific's margins. Nenaco improved its operating profit as it reaped the
benefits of cost cutting measures and introduced efficiencies.


Escotel Mobile Communications Limited, which is based in New Delhi, provides GSM
cellular telephone services in Uttar Pradesh (West), Haryana and Kerala. The
First Pacific Group holds an economic interest of 49.0 per cent. Further
information on Escotel can be found at http://www.escotelmobile.com/.


Escotel reduced its losses by almost half, contributing a loss of US$6.2 million
(HK$48.4 million) in 2001. Revenues were up 50 per cent to Rupees 2.5 billion
(US$53.5 million HK$417.3 million) as Escotel added subscribers at an average
rate of 13 thousand per month. Over 2001, Escotel's subscriber base grew 54 per
cent to close the year at 441,504 (2000: 286,800), accounting for over eight per
cent of the overall Indian cellular market, and it continues to enhance its
market leadership in all three of its markets.


ARPUs in 2001 averaged Rupees 532 (US$11.3 HK$88.1) (2000: Rupees 684 US$15.2
HK$118.6). This decline is attributable to the fact that 68 per cent of
Escotel's subscribers are now on prepaid services.


In March 2001, Escotel put in place five-year financing when it refinanced
US$75.2 million (HK$586.6 million) of offshore debt and secured a domestic debt
facility equivalent to approximately US$112 million (HK$873.6 million). These
facilities enabled the repayment of short-term debt and provide the funds for
network enhancements necessary to support Escotel's growing subscriber base.
Over the year, average interest rates were broadly similar with Escotel's
increase in net borrowing costs largely attributable to higher average debt
balances.


Infrontier, which is headquartered in Hong Kong, is a business solutions
provider that is wholly-owned by First Pacific. Further information on
Infrontier can be found at http://www.infrontier.com/.


Infrontier recorded a loss of US$9.1 million (HK$71.0 million) in its first year
of commercial operations. Revenues, excluding sales to Group companies, of
US$1.5 million (HK$11.7 million) were generated, arising approximately 60 per
cent from Business Solutions and approximately 40 per cent from Technical and
Professional Services. Approximately half of Infrontier's total revenues are
generated from third party clients, which include large, local and multinational
companies involved in the industries of logistics, consumer goods and
pharmaceuticals.


Infrontier's revenues were offset by staff and consultancy costs, while
borrowings as at 31 December 2001 were US$1.5 million (HK$11.7 million).


Disposed businesses: Savills plc, contributed US$1.6 million (HK$12.5 million),
prior to its disposal in March 2001. Berli Jucker and Darya-Varia, both of which
were disposed in December 2001, contributed US$13.5 million (HK$105.3 million)
and US$2.7 million (HK$21.1 million), respectively, prior to disposal.


Note: Unless stated otherwise, quoted comparatives and margins are based on Hong
Kong GAAP adjusted U.S. dollar figures.


                                     * * *


For further information, please contact:

First Pacific Company Limited
Rebecca Brown                                           Tel: [phone]
Executive Vice President
Group Corporate Communications

Sara Cheung                                             Tel: [phone]
Assistant Vice President
Group Corporate Communications


Information about First Pacific can be accessed on:

Web Site:        http://www.firstpacco.com/
E-mail:          [e-mail]


TELECOM SUBSCRIBER DATA
                                              Number of subscribers (in thousands)
                                           31 Dec            31 Dec            31 Dec
                                            2001              2000              1999
PLDT              -fixed line:                    2,174             2,000             1,846
Piltel            -cellular:                      1,475               657               457
Smart             -cellular:                      4,894             2,858             1,025
                  -fixed line:                       --                --               107
Escotel                                             442               287               110
Total                                             8,985             5,802             3,545



EXCHANGE RATES
Closing                 2001             2000            % depreciation
Peso                   51.60             49.96                3.2%
Rupiah                 10,400            9,650                7.2%
Baht                   44.20             43.16                2.4%
Rupee                  48.25             46.72                3.2%


Average                 2001             2000            % depreciation
Peso                   51.04             44.67               12.5%
Rupiah                 10,294            8,523               17.2%
Baht                   44.51             40.43                9.2%
Rupee                  47.24             45.07                4.6%


FIRST PACIFIC COMPANY LIMITED
2001 ANNUAL RESULTS
CONTRIBUTION SUMMARY                                                                            Contribution to
                                                                      Turnover
                                                                                             Group (loss)/profit(i)
                                                                       2001          2000           2001          2000
                                                                       US$m          US$m           US$m          US$m
Indofood                                                            1,414.9       1,490.3           48.1          55.7
PLDT(^)                                                                   -             -           42.8          25.6
Smart(ii)                                                                 -          80.5              -         (9.0)
Metro Pacific                                                         134.4         240.0         (14.6)         (6.4)
Escotel(^)                                                                -             -          (6.2)        (11.8)
Infrontier                                                              1.5             -          (9.1)             -
From continuing businesses                                          1,550.8       1,810.8           61.0          54.1
From disposed businesses(iii)                                         300.9         488.4           17.8          34.4
From operations                                                     1,851.7       2,299.2           78.8          88.5
Corporate overhead                                                                                (12.4)        (13.2)
Net finance charges                                                                               (21.0)        (25.7)
Other (expenses)/income                                                                            (0.8)           1.4
Recurring profit                                                                                    44.6          51.0
Exchange losses                                                                                   (22.4)       (143.5)
(Loss)/gain on disposal and dilution of shareholdings and
provision for investments                                                                      (1,819.2)         143.7
(Loss)/profit attributable to ordinary shareholders                                            (1,797.0)          51.2

(^) Associated companies.

(i) After taxation and outside interests, where appropriate.

(ii) Merged with PLDT on 24 March 2000.

(iii)Represents Berli Jucker, Darya-Varia, Savills plc, First Pacific Bank and
     SPORTathlon.


FIRST PACIFIC COMPANY LIMITED
2001 ANNUAL RESULTS
CONSOLIDATED PROFIT AND LOSS STATEMENT
For the year ended 31 December                                                        2000                         2000
                                                                        2001    (Restated)           2001    (Restated)
                                                                        US$m          US$m           HK$m          HK$m
Turnover                                                             1,851.7       2,299.2       14,443.3      17,933.8
Cost of sales                                                      (1,362.3)     (1,561.8)     (10,626.0)    (12,182.0)
Gross profit                                                           489.4         737.4        3,817.3       5,751.8
(Loss)/gain on disposal and dilution of shareholdings
and provision for investments                                      (2,238.3)         142.3     (17,458.7)       1,109.9
Other operating income                                                  17.1          12.9          133.4         100.6
Distribution costs                                                   (142.0)       (115.0)      (1,107.6)       (897.0)
Administrative expenses                                              (150.3)       (240.9)      (1,172.3)     (1,879.0)
Other operating expenses                                              (17.7)       (142.7)        (138.1)     (1,113.1)
Operating (loss)/profit                                            (2,041.8)         394.0     (15,926.0)       3,073.2
Share of profits less losses of associated companies                    11.8       (132.4)           92.0     (1,032.7)
Net borrowing costs                                                  (103.6)       (107.7)        (808.1)       (840.1)
(Loss)/profit before taxation                                      (2,133.6)         153.9     (16,642.1)       1,200.4
Taxation                                                              (61.4)        (35.6)        (478.9)       (277.7)
(Loss)/profit after taxation                                       (2,195.0)         118.3     (17,121.0)         922.7
Outside interests                                                      398.0        (67.1)        3,104.4       (523.3)
(Loss)/profit attributable to ordinary shareholders                (1,797.0)          51.2     (14,016.6)         399.4
Ordinary share dividends                                                   -           7.7              -          60.1
                                                                         USc           USc            HKc           HKc
Basic and diluted (loss)/earnings per share                          (57.23)          1.75       (446.39)         13.65



CONSOLIDATED STATEMENT OF RECOGNIZED GAINS AND LOSSES
For the year ended 31 December                                          2001          2000            2001          2000
                                                                        US$m          US$m            HK$m          HK$m
Exchange differences on the translation of the financial
statements of foreign entities                                        (14.9)       (180.3)         (116.2)     (1,406.3)
Realization of property revaluation                                      1.3          24.7            10.1         192.6
Net losses not recognized in the profit and loss statement
                                                                      (13.6)       (155.6)         (106.1)     (1,213.7)
(Loss)/profit attributable to ordinary shareholders                (1,797.0)          51.2      (14,016.6)         399.4
Total recognized losses for the year                               (1,810.6)       (104.4)      (14,122.7)       (814.3)
Goodwill arising on acquisitions and written off against
reserves                                                                   -       (312.7)               -     (2,439.1)
                                                                   (1,810.6)       (417.1)      (14,122.7)     (3,253.4)

FIRST PACIFIC COMPANY LIMITED
2001 ANNUAL RESULTS
CONSOLIDATED BALANCE SHEET
As at 31 December                                                                  2000                         2000
                                                                    2001     (Restated)           2001    (Restated)
                                                                    US$m           US$m           HK$m          HK$m
Non-current assets
Property and equipment                                             840.2        2,001.6        6,553.6      15,612.5
Associated companies                                              (23.6)           19.1        (184.1)         149.0
Long-term receivables                                              176.3          207.8        1,375.1       1,620.8
Long-term investments                                                  -            5.2              -          40.6
Pledged deposits                                                       -           50.7              -         395.4
                                                                   992.9        2,284.4        7,744.6      17,818.3
Current assets
Cash and bank balances                                             310.1          369.5        2,418.8       2,882.1
Pledged deposits                                                    41.0            8.0          319.8          62.4
Short-term investments                                              11.5           16.4           89.7         127.9
Accounts receivable and prepayments                                328.7          518.5        2,563.8       4,044.3
Inventories                                                        361.5          259.0        2,819.7       2,020.2
                                                                 1,052.8        1,171.4        8,211.8       9,136.9
Current liabilities
Accounts payable and accruals                                      514.0          401.3        4,009.2       3,130.1
Short-term borrowings                                              750.2          526.1        5,851.5       4,103.6
Provision for taxation                                              23.1           27.6          180.2         215.3
                                                                 1,287.3          955.0       10,040.9       7,449.0
Net current (liabilities)/assets                                 (234.5)          216.4      (1,829.1)       1,687.9
Total assets less current liabilities                              758.4        2,500.8        5,915.5      19,506.2
Equity capital and reserves
Share capital                                                       31.4           31.4          244.9         244.9
Reserves                                                         (222.6)          338.1      (1,736.3)       2,637.2
Shareholders' equity                                             (191.2)          369.5      (1,491.4)       2,882.1
Outside interests                                                  392.2          935.6        3,059.2       7,297.6
Non-current liabilities
Loan capital and long-term borrowings                              391.4          918.5        3,052.9       7,164.3
Deferred liabilities and provisions                                130.0          247.4        1,014.0       1,929.7
Deferred taxation                                                   36.0           29.8          280.8         232.5
                                                                   557.4        1,195.7        4,347.7       9,326.5
                                                                   758.4        2,500.8        5,915.5      19,506.2
Number of shares in issue (millions)                             3,139.8        3,139.8        3,139.8       3,139.8



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