Mirgor — Interim / Quarterly Report 2004

May 14, 2004

CONTACT IN BUENOS AIRES

Fabio Rozenblum

Mirgor S.A.C.I.F.I.A. Tel: (011-5411) 4454-2800 x229

corozenblum@mirgor.com.ar

MIRGOR REPORTS RESULTS FOR THE FIRST QUARTER ENDED MARCH 31ST, 2004

Buenos Aires, May 12th 2004 - 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 1st quarter of fiscal year 2004, ended on March 31st 2004. All figures were prepared according to generally accepted accounting principles in Argentina in Pesos as of March 31st, 2004. The closing rate of exchange was ­ P$2.82=US$ 1.0.

For the quarter ended March 31st, 2004, the Company reported a net profit of P$ 0.36 million, compared to a net loss of P$ 1.31 million calculated for the same period of the previous year. The Company’s gross margin for the quarter ended on March 31st, 2004 was P$ 4.55 million compared to P$1.83 reported for the same period of last year, a 148.3 % increase.

For the quarter ended on March 31st, 2004 sales increased 72.4% to P$34.7 million, from P$ 20.1 million for the same quarter of the previous year. The main reason for this change was the recovery of domestic car sales in Argentina and the addition of a full quarter of deliveries of systems to General Motors Argentina for the New Corsa.

Air-conditioning unit sales for the quarter were 15,506, a 178.0% increase compared to 5,578 units sold in the same period of last year. Non-air-conditioning units sales were 6,199 an increase of 24.5%, compared to 4,979 units sold during the same period of the previous year.

During the period, Mirgor also delivered 4,188 instrument panels to Volkswagen Argentina, a 19.4% increase compared to the 3,507 units delivered on the first quarter of 2003.

The Company’s administrative expenses increased to P$1,88 million from P$ 1.79 million, a 5 % increase over the same period of last year. The small change is related to the higher levels of activity of the Company and the addition of the outsourced logistics operation at General Motors.

Selling expenses increased during the quarter ended on March 31st, 2004 to P$0.87 million from P$0.48 million reported during the same period of last year as a result of the higher volumes that have to be transported by the Company.

Other expenses/(income) had been negative, P$ (0.99) million on the first quarter of last year as a consequence of the deduction of implicit interest on the sale of the property. This quarter the effect has stopped and there are only minor expenses remaining at P$ (0.03).

Financial results for the first quarter ended March 31st, 2004 were P$ (1.14) million, compared to P$ 0.18, reported during the same period of the previous year. The main reason was asset holding losses caused by the revaluation of the euro. Also the revaluation of the peso resulted in exchange losses on assets and liabilities.

CEO´s Statement

Mr. Roberto Vazquez, Chief Executive Officer of Mirgor, stated, “ The good performance of the economy is reflected in the recovery of the auto industry. Consumer confidence is being backed by some available credit at rates that are sometimes lower than what was available in the last decade.

Domestic car sales have grown 225% on the first quarter and production has increased 48%. This has resulted in the upgrade of the forecasts made by car manufacturers and car dealers.

Our sales have enjoyed this production increase, but also it must be noted that half of our sales increase is related to the addition of the New Corsa to our product line. Our market share continues to grow and we are now near 45%.

Also it is important to say that air conditioning penetration in the quarter has jumped significantly from 53% to 71%, a very convenient trend for our turnover.

The consequence of this strong growth of our sales has been a positive net result, still considering that we had the annual shutdown of our customers during the quarter.

Despite some cost increases that have been passed by parts manufacturers to car manufacturers, we do not foresee a negative impact on car sales.

We also have very favorable possibilities to obtain other new projects that have been under study for sometime.

On this sense we are waiting for the confirmation of the new project for VW Argentina, something that was announced in Frankfurt of last year by our main customer.

This could mean that the plant of Pacheco will have a new model by 2006. If this is finally realized our Company will have this project as the absolute priority during the next months.”

MIRGOR S.A.C.I.F.I.A.- Consolidated Balance Sheet as of March 31st, 2004
(in thousands of pesos, except per share amounts)
ASSETS				2004		2003
Cash				8,781		7,809	12.4%
Short term investments				2		2	0.0%
Accounts receivable				17,587		14,082	24.9%
Inventories				41,567		40,216	3.4%
Fiscal credits				362		860	-57.9%
Other credits				1,244		1,474	-15.6%
Total Current Assets				69,543		64,443	7.9%
Property, plant and equipment				21,806		26,278	-17.0%
(net of amortization and depreciation)
Intangible Assets				440		252	74.6%
Other credits				3,367		4,783	-29.6%
Fiscal credits				6,472		6,167	4.9%
Other assets				0		21	-100.0%
Total				32,085		37,501	-14.4%
Total Assets				101,628		101,944	-0.3%
CURRENT LIABILITIES
Commercial liabilities				22,732		13,045	74.3%
Bank debt				8,794		9,746	-9.8%
Social and tax liablities				3,126		1,214	157.5%
Customer prepayments				4,078		7,597	-46.3%
allowances				0		164	-100.0%
Other liabilities				221		91	142.9%
Total Current liabilities				38,951		31,857	22.3%
NON CURRENT LIBILITIES
Bank loans				6,921		13,092	-47.1%
Customer prepayments				0		0
Social and tax liablities				0		0
Total Non Current liabilities				6,921		13,092	-47.1%
Common stock		20000000		0		0
Paid in capital				0		0
Retained earnings				0		0
Deferred compensation				0		0
Total liabilities				45,872		44,949	2.1%
Minority Participation				4		4	0.0%
Total stockholders equity				55,752		56,991	-2.2%
Total Liabilities and share holders equity				101,628		101,944	-0.3%

MIRGOR S.A.C.I.F.I.A.- Consolidated Statements of Income- As of March 31St, 2004
(in thousands of pesos, except per share amounts)
									Dif
		1st Q 2004				1 st Q 2003			2004-2003
Net Sales		34,701				20,124			14,577	72.4%
Cost of sales		-30,148	-86.9%			-18,290	-90.9%		-11,858	64.8%
Gross profit		4,553	13.1%			1,834	9.1%		2,719	148.3%
Administrative expenses		-1,882	-5.4%			-1,797	-8.9%		-85	4.7%
Selling expenses		-874	-2.5%			-479	-2.4%		-395	82.5%
Other expenses/income		-35	-0.1%			-986	-4.9%		951	-96.5%
Financial expenses and holding losses
from assets		-1,037	-3.0%			-2,996	-14.9%
interest	75		0.2%		933		4.6%		-858	-92.0%
foreign exchange difference	-218		-0.6%		-796		-4.0%		578	-72.6%
holding gains (losses) - inventories	-1,184		-3.4%		-3,568		-17.7%		2,384	-66.8%
holding gains (losses) allowances / provisions			0.4%		409		2.0%		-257	-62.8%
gain (loss) on exposure to inflation	0		0.0%		69		0.3%		-69	-100.0%
current investments and tax credits	138		0.4%		-43		-0.2%		181	-420.9%
from liabilities		-106	-0.3%			3,168	15.7%
interest	-593		-1.7%		-552		-2.7%		-41	7.4%
exchange rate difference	487		1.4%		3,755		18.7%		-3,268	-87.0%
gain (loss) on exposure to inflation	0		0.0%		-24		-0.1%		24	-100.0%
Loss from long term investments	0		0.0%		-11		-0.1%		11	-100.0%
E B I T		619	1.8%			-1,256	-6.2%		1,875	-149.3%
From subsidiaries		0	0.0%			0	0.0%		0
Income tax		-258	-0.7%			-50	-0.2%		-208	416.0%
Net Ordinary Income		361	1.0%			-1,306	-6.5%		1,667	-127.6%
Extraordinary results		0	0.0%			0	0.0%		0
Total net earnings/losses		361	1.0%			-1,306	-6.5%		1,667	-127.6%
Net earnings per share		0				-0			0

MIRGOR S.A.C.I.F.I.A.- Statements of Cash Flows
as of March 31st, 2004
		2004		2003
Changes in cash
cash at beginning of year		13,782		14,014
cash at end of year		8,782		7,810
cash (decrease) increase		-5,000		-6,204
Sources of changes in cash
Operating Activities
Ordinary income (loss) for the year		362		-1,306
Interest and translation difference produced upon debt		40		-1,557
Income tax		258		50
Adjustments to reach net cash flows deriving from operating activities
PP&E depreciation and intangible assets amortization		1,244		1,389
Minority interest		0		0
Provision for unrecoverable inventories		-463		-1,045
Loss on long-term investments		0		11
Result on current investments		0		0
Contingency Provision		0		-879
Impairment in value of PP&E paid in advance from exposure to inflation		0		2
Changes in operating assets and liabilities:
Accounts receivables		-2,084		-5,276
Inventories		-4,405		1,693
Commercial liabilities		2,493		1,405
Salaries, payroll and other taxes (net of receivables)		-696		-701
Customer prepayments		-1,734		1,173
Other receivables/payables		164		805
Interest payed		-209		-838
Net Cash Flow Provided by operating
activities		-5,030		-5,074
Investment activities
Purchases of property, plant and equipment		-200		-69
Intangible investment		-435		0
Net Cash flow used in investment activities		-635		-69
Financing Activities
Loan Repayment		-2,335		-1,061
Income for short term loan		3,000		0
Net cash Flow used in financing activities		665		-1,061
Net cash (decrease) increase		-5,000		-6,204