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Mirgor Earnings Release 2005
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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 FOURTH QUARTER AND YEAR ENDED DECEMBER 31st, 2005
Buenos Aires, March 13th, 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 4th quarter of fiscal year 2005, ended on December31st, 2005. All figures were prepared according to generally accepted accounting principles in Argentina in Pesos as of December 31, 2005. The closing rate of exchange was P$3.04=US$ 1.0.
For the quarter ended December 31, 2005, the Company reported a net profit of P$ 8.64 million, compared to a net profit of P$ 3.84 million calculated for the same period of the previous year. The Company’s gross margin for the quarter ended on December 31, 2005 was P$ 15.94 million compared to P$14.00 reported for the same period of last year, a 13.9 % increase.
For the quarter ended December 31, 2005 sales increased 48.9% to P$106 million, from P$ 71.2 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 had a modest increase because Mirgor customers were not among the big winners of the industry.
Sales of Interclima condensers were similar to the same quarter of last year, however, sales of Peugeot 206 condensers offset the reduction of exports to Brazil. The plant of Interclima continues to work 3 shifts.
Air-conditioning unit sales for the quarter were 25,206, a 17.7% increase compared to 21,413 units sold in the same period of last year. Non-air-conditioning units sales were 7,749 a decrease of 27.1%, compared to 10,623 units sold during the same period of the previous year. Although, total units sold are about even between the two quarters sales amounts were higher, thanks to the higher value of the air-conditioning units.
During the period, Mirgor also delivered 5,873 instrument panels to Volkswagen Argentina, a 18.1% decrease compared to the 7,173 units delivered on the fourth quarter of 2004. The reduction was due to the anticipation of the yearly shutdown of VW´s plant to December.
The Company’s administrative expenses increased to P$3.9 million from P$ 2.6 million, a 50.0% increase over the same period of last year. The increase in expenses was due to a small growth of our personnel and inflationary related expenses.
Selling expenses increased during the quarter ended December 31,2005 to P$3.19 million from P$2.14 million reported during the same period of last year, a 49.1% increase as a result of the higher volumes that have to be transported by the Company and inflation based adjustments.
Other income/(expenses) was, P$ (0.21) million on the last quarter of 2005, compared to P$ 0.6 million. This quarters amount corresponds to minor expenses of the Company.
Financial results for the fourth quarter ended December 31, 2005 were P$ (0.02) million, compared to P$(5.6), reported during the same period of the previous year. Last year we had an increased provision for depreciation of fiscal credits which accounted for most of the negative result. In the last quarter of 2005, the devaluation of the peso was evenly compensated between asset holding gains and liabilities adjustment losses.
Annual results
For the year ended on December 31, 2005, the Company reported a net profit of P$ 19.7 million, compared to net profit of P$ 7.3 million in fiscal year 2004, an increase of 170%. The higher sales amounts of 2005 leveraged the result of the Company, which could absorb the higher activity with small increases in its structure.
The Company’s gross margin for the year ended on December 31, 2005 was P$ 47.5 million compared to P$32.1 reported for last year, a 48 % increase.
Sales increased 43.3% to P$ 288.9 million from P$ 201.6 million reported on the year ended on December 31, 2004.
Car production during the year increased 22.8% in line with the higher export demand and the continous improvement of the local market.
The big winners of the increased production were the car manufacturers who launched new models which are mainly aimed to foreign markets.
Demand continued to exceed production and imports reached a new record of 259.400 cars sold in Argentina. The biggest share of the market was taken by brazilian cars led by the VW Gol.
Air conditioning unit sales for 2005 increased to 90,593 units, a 21.1% increase compared to 74,837 units sold in the same period of the previous year. Non air-conditioning sales were 32,572, a decrease of 10% compared to 36,183 units sold during the same period of the previous year. Air-conditioning penetration on the sales mix of Mirgor increased to 74% from 67% reported in 2004.
Instrument panel sales were 22,359 units compared to 22,149 sold in the previous year. The lack of growth corresponds to the life cycle of the Polo which is stable in its market.
Condenser sales saw a customer mix change in the year ended in December 2005. Exports to Valeo have slowed down because they have expanded their facilities in Brazil and they will insource some products that are currently purchased to suppliers.
Interclima has been able to compensate this reductions with larger sales to Peugeot for the 206 model.
The Company´s administrative expenses increased 24.2% during the year ended in December 31st, 2005, to P$ 11.3 million, from P$ 9.1 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 adminstrative structure. Also inflation has played a part in these increase.
Selling expenses were 47.8% higher than last year, from P$5.57 million in 2004 to P$ 8.23 million in 2005. These expenses are directly influenced by the higher volumes sold by the Company in 2005.
Other (expenses)/income changed from P$ 0.09 million in 2004 to P$ 0.86 million in 2005. These increase in expenses was due to the adjustment of the Company to higher volumes and new product lines and it should not be considered a permanent expense.
Financial results for the year ended on December 31, 2005 were P$ (6.84) million, compared to P$ (8.94) million reported for the same period of 2004.
The reduction in financial losses were mainly because last year we included a provision for depreciation of fiscal credits which were not repeated this year.
CEO´s Statement
Mr. Roberto Vazquez, Chief Executive Officer of Mirgor, stated, “ Our good year has been the result of the very hard work of our people who has been committed to recover from the bad years of the late 90´s and the yearly 2000´s.
We have been able to reverse the difficulties by expanding our business in several directions: new contracts from existing customers, new orders for new customers and new product lines added to our traditional automotive products.
We have also coupled our increased sales figures with a good leverage from our operation which has allowed us to obtain a very good productivity.
The recovery of the argentine economy had also an impact in this result of Mirgor.
Of course we know that the are still some doubts about the possibilities of the argentine economy to sustain these growth rates, but we are now faced with quick needs to make decisions regarding our plants capacities, our production lines, the toolings for new products. All these demands require us to prepare ourselves for the coming year and we have to be ready to react and continue to be competitive in markets that have become more global each day.
I would like to mention that our residential air conditioning sales represent almost 25% of our total turnover and this means that we are reducing our dependance on a single industry.
Finally, I would like to add a word about the change of ownership of Il Tevere, the holding who controls Mirgor.
We are convinced that our close ties with Valeo will be maintained through our commercial and technical agreements to help us continue to expand the business of our Company.”