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SCMP Reporter

STRONG performances in marketing and distribution, and in property-linked services, lifted profit at First Pacific Co by 38 per cent to $1.016 billion last year - well in front of market expectations.

   The profit was bolstered by an exceptional gain after tax and outside interests, being the profit attributable for the year from exceptional gains, by $162.3 million.

   Exceptional gains before tax and outside interests was $308.9 million before tax.

  The calendar 1994 result compares well with the Estimate Directory consensus forecast of $945 million, up 20 per cent.

  The group's exceptional gains came from the $379.1 million sale of the Matsushita agency in Singapore to Matsushita, and the sale of stakes in subsidiaries totalling $211.4 million, mainly linked to Metro Pacific and Berli Jucker.

  These gains were offset by a $65.5 million charge on telecommunications projects and $216.1 million in group re-organisation expenses, associated with Hagemeyer.

  Group managing director Manuel Pangilinan said 1994 was a year of strong profit growth in recurring and exceptional gains.

  'We made significant investments in our telecommunications businesses, which are now rapidly expanding in Hong Kong, the Philippines and Indonesia.'   Telecoms business put on 23 per cent in sales to $1.1 billion and contributed $149 million to profit.

  Group turnover was up 19 per cent to $28.7 billion. Earnings per share were 49.69 cents on a fully diluted basis, up 40 per cent.

  Excluding the net exceptional item, fully diluted earnings per share grew 39 per cent to 42.12 cents from 30.26 cents in 1993.

  Dividend per share for the year will be 14 cents, up 22 per cent. The ordinary share register will be closed from April 3 to 7.

  First Pacific Davies, the group's integrated property services arm, registered the biggest growth in terms of profit contribution.

  Profits at First Pacific Davies jumped a hefty 84.3 per cent to $310.4 million from $168.5 million in 1993.

   It is believed that a significant portion of earnings were generated by the sale of Aigburth Hall in Mid-Levels.

  Ranking second in profit growth was the marketing and distribution division which saw an almost 30 per cent increase to $539.8 million.

  Within the sales division, Tech Pacific and pharmaceutical company Darya-Varia Laboratoria posted profit growth of 131 and 132 per cent, respectively.

  According to the company, Tech Pacific, which is the Australasian distributor of computer software, hardware and mobile cellular telephones, will build up its earnings as a regional distributor in Asia.

  In telecoms, Mr Pangilinan said the increase in profitability at Pacific Link had been held back by the insufficient supply of digital telephones, particularly in the first half of the year. The situation had later been improved with the availability of more phones.

  Subscribers on Pacific Link's network now exceed 93,000.

  Mr Pangilinan said the company would benefit from the merging of Pacific Link and CT2 and paging company Pacific TeleLink at the end of last year.

  Mr Pangilinan said: 'I am confident that the quality of our businesses, with an increasing focus in Asia and in telecommunications, will provide the impetus for further growth in our recurrent profitability in 1995 and beyond.'   He said he expected rapid growth at Smart Communications in the Philippines and IndoLink in Indonesia, with Smart approaching break-even this year.

  IndoLink is not expected to break even before the second quarter of next year.

  The group's banking operations saw a decline in profit of 18.6 per cent.

  The strong performance from First Pacific Bank in Hong Kong was more than offset by the 36 per cent decline in profit at the United Savings Bank in California, where the economy remains weak and the bank maintained a low lending level.

  This year, First Pacific said it expected to book a substantial and exceptional gain from the sale of its 85 per cent stake in United Savings to the Salim family, which holds the controlling interest in the group.

  Analysts are generally bullish about First Pacific's performance this year.



First Pacific clears $1b for 1994