Mirgor — Earnings Release 2004

Mar 23, 2005

CONTACT IN BUENOS AIRES

Fabio Rozenblum

Mirgor S.A.C.I.F.I.A. Tel: (54-11) 6394-2826

corozenblum@mirgor.com.ar

MIRGOR REPORTS RESULTS FOR THE FOURTH QUARTER AND YEAR END FOR THE PERIOD ENDED DECEMBER 31st, 2004

Buenos Aires, March 14th, 2005 - MIRGOR S.A.C.I.F.I.A., (“Mirgor or “the Company­”), Argentina's largest autoparts company listed on the Buenos Aires stock exchange, announced today its results for the 4th quarter of fiscal year 2004, ended on December31st, 2004. All figures were prepared according to generally accepted accounting principles in Argentina in Pesos as of December ­31, 2004. The closing rate of exchange was ­ P$2.979=US$ 1.0.

For the quarter ended December 31, 2004, the Company reported a net profit of P$ 3.84 million, compared to a net profit of P$ 0.80 million calculated for the same period of the previous year. The Company’s gross margin for the quarter ended on December 31, 2004 was P$ 12.74 million compared to P$5.07 reported for the same period of last year, a 151.2 % increase.

For the quarter ended December 31, 2004 sales increased 86.9% to P$71.2 million, from P$ 38.1 million for the same quarter of the previous year. About half of this increase in sales was due to the addition of the new line of products, residential air conditioning. The other main reason was the increase related to the recovery of car production and car sales.

Also, sales of Interclima products profited from the addition of a new product, the condenser for the Peugeot 206. The plant of Interclima had to work 3 shifts to be able to absorb all the new demand.

Air-conditioning unit sales for the quarter were 21,413, a 31.6% increase compared to 16,274 units sold in the same period of last year. Non-air-conditioning units sales were 10,623 an increase of 63.8%, compared to 6,487 units sold during the same period of the previous year.

During the period, Mirgor also delivered 7,173 instrument panels to Volkswagen Argentina, a 48.8% increase compared to the 4,821 units delivered on the fourth quarter of 2003.

The Company’s administrative expenses increased to P$2.6 million from P$ 2.0 million, a 30.1% increase over the same period of last year. Near the end of the year, Mirgor started to adjust its administrative structure as a result of the new business lines.

Selling expenses increased during the quarter ended December 31,2004 to P$2.14 million from P$1.84 million reported during the same period of last year, a 16% increase as a result of the higher volumes that have to be transported by the Company.

Other income was, P$ 0.6 million on the last quarter of 2004, compared to P$ 0.07 million. A recovery of provisions was the result of this increase.

Financial results for the fourth quarter ended December 31, 2004 were P$ (4.4) million, compared to P$0.01, reported during the same period of the previous year. The main reasons which explain the sharp increase of financial losses were: impact of the revaluation of the euro on our supplier accounts, the payment of interest of the debt and the provision for depreciation of fiscal credits.

Annual results

For the year ended on December 31, 2004, the Company reported a net profit of P$ 7.3 million, compared to a net loss of P$ 2.9 million in fiscal year 2003. The higher sales levels of this year allowed the Company to revert the negative results of the previous years were the economy was in depression.

The Company’s gross margin for the year ended on December 31, 2004 was P$ 29.6 million compared to P$11.7 reported for last year, a 153 % increase.

Sales increased 75.8% to P$ 201.6 million from P$ 114.7 million reported on the year ended on December 31, 2003.

Car production during the year increased 53.5% as the result of the recovery of local demand and a growth in exports to countries outside of Mercosur. Mexico was the most important market for Argentina.

As in the case of last year car sales increased more than production. Brazilian car exported profited significantly from the improved local market because of the high demand of small cars, where our Mercosur partner has a big expertise.

Car production and sales are expected to continue their grow in 2005, at lower rates.

Air conditioning unit sales for 2004 increased to 74,837 units, an 80.5% increase compared to 41,451 units sold in the same period of the previous year. Non air

conditioning sales were 36,183, an increase of 44.4% compared to 25,065 units sold during the same period of the previous year.

Instrument panel sales were 22,149 units compared to 17,739, a 24.9% increase compared to last year, resulted from the increase in production of the VW Polo Classic.

Condenser sales for the year ended in December 2004 were 20.2% lower than in the previous year. In 2003 Interclima has sold 102,388 condensers to third companies, most of them exported to Valeo Brazil. In 2004 the total quantity sold was 81,661 as a consequence of a lower demand from this customer. Part of this reduction was compensated with the contract obtained from Visteon.

Also, it is important to emphasize that the new contract for Peugeot 206 will allow Interclima to recover its volumes in 2005.

The Company´s administrative expenses increased 13.7% during the year ended in December 31st, 2004, to P$ 9.07 million, from P$ 7.97 million reported on the year before. The new levels of activity and the introduction of new products required that the Company made some adjustments in its administrative structure.

Selling expenses were 69.3% higher than last year, from P$5.57 million in 2003 to P$ 3.29 million in 2004. The evolvement of this expense is related directly to the transported volumes of Mirgor.

Other (expenses)/income changed from P$ (1.5) million in 2003 to P$ 0.09 million in 2004. In the previous year, the Company had had some extraordinary expenses which impacted in this line of the financial report.

Financial results for the year ended on December 31, 2004 were P$ (6.4) million, compared to P$ (1.0) million reported for the same period of 2004.

The main reasons which explain the sharp increase of financial losses were: impact of the revaluation of the euro on our supplier accounts, the payment of interest of the debt and the provision for depreciation of fiscal credits.

CEO´s Statement

Mr. Roberto Vazquez, Chief Executive Officer of Mirgor, stated, “ We are very glad to announce that the Company was able to show positive results for the first time since 1999. Although the reversion of this negative trend had started in the second semester of last year, this is our first full year of acceptable performance.

There are several reasons which help explain the outcome, but first of all I would like to say Mirgor had in its people a tenacious group that helped overcome the bad years we had to endure.

Also, we must say that the recovery of Mirgor is related to a combination of facts:

• The volumes sold in 2004 were the bigger since 2000, thanks to the recovery of car production in Argentina.
• Air conditioning penetration in domestic production also increased from the previous years.
• Market share reached 43%, thanks to the last orders we obtained.
• The addition of residential air conditioning in a idle plant in Tierra del Fuego.

The attached table details the breakdown of our climate control system sales to car manufaturers:

	BREAKDOWN OF MIRGOR OEM SALES RESULTS (in quantities)
	2004		2003		DIF
Totals	110,908		66,298		44,610	67.3%
OLD MODELS
SPRINTER	14,012	12.6%	7,349	11.1%	6,663	90.7%
CORSA I	11,898	10.7%	6,873	10.4%	5,025	73.1%
PARTNER	7,975	7.2%	6,494	9.8%	1,481	22.8%
KANGOO	9,089	8.2%	4,247	6.4%	4,842	114.0%
MEGANE	6,751	6.1%	4,252	6.4%	2,499	58.8%
GOL	0	0.0%	545	0.8%	-545	-100.0%
POLO	20,075	18.1%	18,851	28.4%	1,224	6.5%
CADDY	5,821	5.2%	1,819	2.7%	4,002	220.0%
Subtotal	75,621	68.2%	50,430	76.1%	25,191	50.0%
NEW MODELS
CORSA II	26,396	23.8%	8,815	13.3%	17,581	199.4%
CLIO	8,891	8.0%	7,053	10.6%	1,838	26.1%
Subtotal	35,287	31.8%	15,868	23.9%	19,419	122.4%

The order for the condenser of the Peugeot 206 was very important. Not only because it allows us to replace the reduction of our exports to Brazil but also because we had reduced our sales to PSA in the last years and we believe that this could become one of the most successful manufacturers in Argentina, based on the production plans they have presented in 2004.

The new car to be launched by Volkswagen is another opportunity that Mirgor should persue during the beginning of 2005, since VW is the biggest customer of the Company.

According to the car manufacturers projections, we are expecting additional growth in production volumes for 2005.

After the different problems experienced by the auto industry in the last years, we hope to see a long term industrial policy of the country.

We believe that Mercosur has to find a way to solve the problems which hinder the construction of a balanced common market.

In the meantime, we are getting ready to face the future with great enthusiasm and we are waiting to see what new projects can be introduced by our customers”.

	MIRGOR S.A.C.I.F.I.A.- Consolidated Balance Sheet as of December 31st, 2004
	(in thousands of pesos, except per share amounts)
	ASSETS				2004		2003
	Cash				17,674		13,782	28.2%
	Short term investments				0		0
	Accounts receivable				36,225		15,503	133.7%
	Inventories				44,088		36,699	20.1%
	Fiscal credits				534		278	92.1%
	Other credits				1,160		1,285	-9.7%
	Total Current Assets				99,681		67,547	47.6%
	Property, plant and equipment				19,464		22,822	-14.7%
	(net of amortization and depreciation)
	Other credits				903		1,246	-27.5%
	Fiscal credits				5,833		8,291	-29.6%
	Intangible Assets				356		33	978.8%
	Total				26,556		32,392	-18.0%
	Total Assets				126,237		99,939	26.3%
	CURRENT LIABILITIES
	Commercial liabilities				36,745		20,239	81.6%
	Bank debt				10,677		5,569	91.7%
	Social and tax liabilities				5,110		3,045	67.8%
	Customer prepayments				4,291		4,051	5.9%
	Other liabilities				304		230	32.2%
	Allowances				382		0	32.2%
	Total Current liabilities				57,509		33,134	73.6%
	NON CURRENT LIBILITIES
	Loans				6,032		9,650	-37.5%
	Customer prepayments				0		1,761	-100.0%
	Total Non Current liabilities				6,032		11,411	-47.1%
	Total liabilities				63,541		44,545	42.6%
	Minority Participation				5		4	25.0%
	Total stockholders equity				62,691		55,390	13.2%
	Total Liabilities and share holders equity				126,237		99,939	26.3%