MANILA, September 1, 2005
 (STAR) By Mary Ann Ll. Reyes - Following solid first half 2005 financial results, Hong Kong-based First Pacific Co. says it will continue to seek growth opportunities via strategic acquisitions in the Philippines, and Indonesia and elsewhere in the region.

"Looking ahead, we will continue to seek growth opportunities carefully by way of strategic acquisitions, particularly in light of the challenging business environment in both the Philippines and Indonesia, as a result of higher oil prices and interest rates," FPC managing director and CEO Manuel Pangilinan said.

FPC holds a 25-percent stake in the Philippine Long Distance Telephone Co. (PLDT) and has a controlling stake in Metro Pacific Corp. in the Philippines and Indofood in Indonesia.

Pangilinan stressed that their abiding goal remains the rebuilding of First Pacific’s long term-value. "In that light, we have acquired additional 1.7-million PLDT common shares from the market such that we now hold approximately 25 percent of PLDT’s current outstanding shares. At Metro Pacific, we are seeing the first tangible signs of a reversal of its fortunes and should see it returning to profitability in 2005 and beyond. At Indofood, we believe the ongoing restructuring and reorganization process will enhance its capabilities and competitiveness in the consumer food industry in Indonesia," he said.

Pangilinan, chairman of the PLDT Group, noted that despite a very challenging business environment in the Philippines and Indonesia, First Pacific delivered solid results for the first half of this year, resulting in the resumption of dividend payment to its shareholders.

"Although the interim payment of HK one cent per share is modest, it is our intention to increase the dividend as cash flows at headquarters further strengthen as a result of the projected substantial and continuing dividend streams from PLDT, he added.

For the remainder of 2005, Pangilinan expects PLDT to continue performing well, maintaining its strong growth momentum by offering better quality, more value-added, and affordable products and services.

PLDT contributed a recurring profit of $58.8 million during the period, on the basis of reported net income of P16.8 billion ($306. million) during the period. PLDT’s consolidated core net income before foreign exchange and derivative gains increased 8.7 percent to P15 billion ($273.2 million).

Supported by its strong performance and free cash flow, PLDT raised its dividend payout ratio for 2005 to 30 percent from 15 percent and its debt reduction target to $600 million from $500 million.

First Pacific reported first half 2005 recurring profits of $53.9 million or an 85 percent increase, which Pangilinan said was principally attributable to the outstanding performance of PLDT and the significant reduction in losses at Metro Pacific.

According to Pangilinan, Metro Pacific is in the final stage of its debt reduction program and now has a much stronger balance sheet.

It contributed a recurring loss of $1.1 million during the period, a significant decrease compared with the recurring loss of $6.3 million in the first half of 2004. Metro Pacific reported a net income of P90.9 million compared with a net loss of P8.6 million in the first half of 2004.

"By yearend 2005, Metro Pacific’s head office debts are expected to reduce to below P300 million ($5.3 million). This development allows it to rebuild its investment portfolio and to expand its operational profitability," Pangilinan added.

First Pacific has also invested $15 million for a 25 percent interest in Level Up at the end of March 2005. Level Up is the pioneer and market leader in operating massively multiplayer online games (MMOG) in the Philippines, Brazil and India — the latter two representing basically start-up operations.

Level Up recorded a total subscriber base of approximately 250,000 with an operating loss in the first half of 2005, primarily due to the start up losses in its Brazilian operation and the pre-launch marketing expenses in India.

News editor-in-chief: Sol Jose Vanzi

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