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First Pacific's two-year restructuring programme is almost complete, and the company is concentrating on wringing out value from its remaining assets, according to managing director Thomas Yasuda.

 'First Pacific is emerging from more than two years of restructuring as a stronger, more focused, more growth-oriented group,' Mr Yasuda said.

 While First Pacific had restructured to ensure it was in position for a regional economic recovery, 'our operating companies have, themselves, embarked on their own restructuring efforts', he said.

 In the past two years, the company has sold more than US$2.7 billion worth of assets.

 It also acquired stakes in Philippine Long Distance Telephone (PLDT) and Indonesian noodle-maker Indofood.

 However, the winding down of First Pacific's restructuring programme - with a corresponding drop in exceptional gains - has resulted in earnings declines.

 First Pacific's net profit in the first half to June 30 plunged 74 per cent from a year earlier to US$113.1 million.

 It posted US$148.2 million in one-off gains in the interim period, mainly from the sale of part of a stake in Smart Communications to Japan's Nippon Telegraph and Telephone (NTT).

 By comparison, First Pacific recorded US$643.7 million in one-off gains during the same period last year, when it sold a stake in Dutch trading company Hagemeyer.

 In November, First Pacific acquired a 17 per cent interest in PLDT, the largest telephone company in the Philippines, for US$759 million.

 First Pacific's US$650 million purchase of a 40 per cent Indofood stake will be completed 'soon, barring unforeseen circumstances', Mr Yasuda said.

 The completion of this deal would leave First Pacific with about US$114 million in cash, as well as the remaining US$36 million from the sale of a Taiwanese unit - Tuntex Communications - due in October and February.

 First Pacific said it would pay its shareholders an interim dividend of two HK cents, a 20 per cent drop from last year.

 Turnover fell 73 per cent to US$612.9 million, mainly because of the departure of Hagemeyer from its books.

 PLDT, as an associate, is not included in the turnover figure.

 First Pacific said earnings per share fell 74 per cent to 4.73 US cents, while contributions from operations - excluding gains from disposals - increased 23 per cent to US$35.6 million.

 Lehman Brothers Asia investment analyst Philip Tulk said the increase in contributions from operations 'signals a fairly major improvement' for the company.

 'The cleaning-up process may be taking a lot longer than some people think it should, but First Pacific's ongoing businesses are getting better,' he said.

 Mr Yasuda said First Pacific was in talks with shareholders of its 35 per cent-held Metro Selular (Metrosel) about a plan to develop the Surabaya, Indonesia, mobile-telephone operator into a national company.

 Possible changes include a restructuring of Metrosel's ownership structure as part of a plan to make the company more competitive.

 Mr Yasuda said First Pacific planned to expand Metrosel's base by reaching an 'agreement on common ownership' of the three separate mobile telephone networks in Indonesia held by individual shareholders.

 If an agreement on ownership could not be reached, it might propose a common brand and roaming service, linking the three networks into a united marketing front instead, he said.

 Metrosel, whose subscriber numbers have been 'flat at around 30,000', needs 'an anchor in Jakarta' if it is to compete successfully, he said.



First Pacific restructuring leads to profits fall of 74pc