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Mirgor Earnings Release 2006
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Download source fileCONTACT IN BUENOS AIRES
Fabio Rozenblum
Mirgor S.A.C.I.F.I.A. Tel: (54-11) 6394-2826
MIRGOR REPORTS RESULTS FOR THE SECOND QUARTER OF 2006
Buenos Aires, August 11st, 2006 - 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 2nd quarter of fiscal year 2006, ended on June 30th, 2006. All figures were prepared according to generally accepted accounting principles in Argentina in Pesos as of June 30th, 2006. The closing rate of exchange was P$3.048=US$ 1.0.
For the quarter ended June 30th, 2006, the Company reported a net profit of P$ 7.93 million, compared to a net profit of P$ 4.02 million calculated for the same period of the previous year. The Company’s gross margin for the quarter ended on June 30th, 2006 was P$ 16.08 million compared to P$10.76 reported for the same period of last year, a 49.4 % increase.
For the quarter ended June 30th, 2006 sales increased 111.6% to P$118.5 million, from P$ 56.0 million for the same quarter of the previous year. Most of this increase was due to the sharp increase in residential air conditioning sales. Automobile product sales increased more than the average growth of the industry thanks to a market share gain.
Sales of Interclima condensers grew at the same rate of the industry in both the domestic and the export market.
Air-conditioning unit sales for the quarter were 37,965, a 62.7% increase compared to 23,332 units sold in the same period of last year. Non-air-conditioning units sales were 7,573 a decrease of 14.2%, compared to 8,827 units sold during the same period of the previous year. The reduction of non A/C units shows the higher preference of consumers better equipped cars. Last year A/C penetration in Mirgor sales was 73% and in the same period of this year it increased to 83%.
During the period, Mirgor also delivered 2,548 instrument panels to Volkswagen Argentina, a 45.5% decrease compared to the 4,678 units delivered in the second quarter of 2005. VW has reduced the production of Polo cars in favor of the Suran.
The Company’s administrative expenses increased to P$6.4 million from P$ 2.6 million, a 146.2% increase over the same period of last year. The expenses reported this quarter include Directors Fees.
Selling expenses increased during the quarter ended June 30th,2006 to P$4.07 million from P$2.01 million reported during the same period of last year, a 102.5% increase as a result of the higher volumes that have to be transported by the Company and inflation based adjustments.
Other income/(expenses) was, P$ 0.07 million on the last quarter of 2005, compared to P$ 0.02 million.
Financial results for the second quarter ended June 30th, 2006 were P$ 2.4 million, compared to P$(2.1), reported during the same period of the previous year. The positive result corresponds to asset holding gains originated in euro appreciation and the reversal of inventory depreciation provisions due to increased demand of the Company´s products.
CEO´s Statement
Mr. Roberto Vazquez, Chief Executive Officer of Mirgor, stated, “ The most important aspect of the Company´s performance in the last quarter has been the increase of our sales levels compared to last year.
The efforts we made in the previous years to expand our product line and to obtain new contracts to get a higher penetration in the auto industry is showing its results during this year.
It is important to notice that we are a better balanced Company now with almost 30% of our sales coming from the residential airconditioning market.
The biggest concern we have is related to the cost increases we are still facing from suppliers, salaries, services, etc. Considering that our automobile customers are exporting nearly 50% of their production, there is a strong need to avoid cost increases in hard currency.
We are working very hard to try to offset these increases without having to transfer them to our customers.
Also, we are investing to expand our capacities to be ready for an increase in demand, despite of the risks of a changing market. Another concern is the lack of clear definitions of the promotion framework that could affect the competitiveness of our products.”