6-K 1 madeco.htm J

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

MADECO S.A. ANNOUNCES ITS

CONSOLIDATED RESULTS FOR THE THIRD QUARTER OF 2006

 

 

(Santiago, Chile, October 30, 2006) Madeco S.A. ("Madeco") (NYSE ticker: MAD) today announced its consolidated financial results in Chilean GAAP for the third quarter ended September 30, 2006. All figures are expressed in Chilean pesos at September 30, 2006. Translations to US dollars made in this report are based on the exchange rate on that date (US$1.00 = Ch$537.03) and UF1.00= Ch$18,401.2 at September 30, 2006.

 

Highlights

    • Sales in the third quarter of 2006 increased by 69.2% compared to the same period of 2005, totalling Ch$148,370 million, explained by a 2.2% increase in volumes and the increased price of raw materials.

    • As was reported in the analysis of the June 2006 quarter, the sharp rise in copper prices during April and May (of US$3,000 per ton on average) had generated extraordinary income estimated at Ch$6,500 million in the first half - year's operating income. In the July - September quarter, the LME (London Metal Exchange) price stabilized and there has been no significant difference between that and our weighted average accounting price. Operating income therefore has not been affected by profits for this concept.

    • The Company's operating income in the third quarter increased by 115.9% as a result of increases in prices and volumes. In addition, administrative and selling expenses grew by 19.8% compared to 2005 due to greater marketing activities and expenses inherent in the requirements of the SEC (Security and Exchange Commission). However, they have reduced as a percentage of sales, from 6.9% in 3Q05 to 4.9% in 3Q06.

    • The Company produced a net income of Ch$7,440 million in the third quarter, 352.1% higher than the Ch$1,646 million recorded for the same period of 2005. This improvement comprises increased operating income of Ch$7,965 million, a higher negative non-operating result of Ch$1,003 million and a higher charge for income tax, minority interest and others of Ch$1,173 million.

  1. Highlights of the Income Statement (Exhibits 1 & 2)

    2. Net Income Net income for 3Q06 was Ch$7,440 million, 352.1% higher than the Ch$1,646 million produced the year before. This was mainly due to improved operating income of Ch$7,965 million partially offset a larger non-operating loss of Ch$1,003 million and a higher charge for income tax, minority interest and others of Ch$1,173 million.

    Revenues Sales in 3Q06 were Ch$148,370 million, a 69.2% increase over the same period of the previous year. This increase is basically explained by a growth in volumes sold (706 tons) and the improvement in the average price of the product mix as a result of the rise in the copper price.

    Gross Income The gross income 3Q06 was Ch$22,052 million, 71.0% more than the Ch$12,893 million of the year before as a result of the 69.2% increase in sales and a 68.8% increase in the cost of sales. The increase in the cost of sales is basically due to the greater volume sold and the increase in the cost of the principal raw materials, like copper and aluminum. The rise in the average copper price (LME) in September 2006, compared to the average in September 2005 was 97.1% in dollar terms (from US$3,858 to US$7,602 per ton); in the case aluminum, the rise was 34.4%, also in dollars (from US$1,840 to US$2,473 per ton).

    The sales prices of our products are indexed to the price of our principal raw material, copper, through the price published by the London Metal Exchange (LME). All products with a high copper content set their sale prices at the LME monthly average + transformation. Extraordinary gains were produced because of the very abrupt rises on the LME, generated by the difference between the LME price invoiced to the customer and the average weighted valuation price of our inventories, as explained in the opening summary.

    Operating Income Operating income for 3Q06 amounted to Ch$14,835 million, 115.9% higher than the Ch$6,871 million obtained the year before. This increase is explained by the 71.0% (Ch$9,159 million) improvement in the operating margin, offset by a 19.8% increase in administrative and selling expenses as a result of the higher turnover and the higher costs involved in the implementation of the Sarbanes Oxley Act requirements.

    Non-Operating Income The Company's non-operating loss for 3Q06 amounted to Ch$5,081 million, 24.6% higher than the loss of Ch$4,078 million reported for the 3Q05. This is basically due to higher exchange losses, net of the impact of hedging costs, plus price-level restatements of Ch$1,319 million (in the same period of 2005, Madeco produced a loss of Ch$469 million versus Ch$1,788 million in 2006). The exchange difference loss in the third quarter of 2006 was mainly the result of smaller credits to income on the translation of the Brazilian subsidiaries.

    The increase in interest rates and the impact of taxes on loans increased financial expenses by Ch$413 million.

    Income Tax During the 3Q06, income tax represented a charge of Ch$2,015 million, compared to Ch$947million in the same period of the year before.

    Minority Interest The Company's minority interest mainly reflects the portion of earnings/losses corresponding to the participation of minority shareholders in the subsidiaries Alusa, Indeco and Indalum. The minority interest in 3Q06 was a negative Ch$305 million, compared to a negative Ch$200 million in 3Q05.

  2. Analysis by Business Unit (Exhibits 3 through 6)

    3. Wire & Cable Sales in 3Q06 amounted to Ch$91,364 million of which Ch$22,947 million came from sales of copper rods and the remaining Ch$68,417 million from sales of cables. Sales volumes rose by 5.0%, particularly of rods (28.1%) and cables in Argentina (49.6%) and, to a lesser degree, cables in Brazil (14.2%). These volumes were partially offset by reduced volumes of cables in Chile (48.3%).

    The cost of sales amounted to Ch$76,912 million in 3Q06, 97.9% higher than the Ch$38,865 million reported the year before. This increase was principally due to the increased volume sold and to the increased copper price, which rose by 97.1% in dollar terms (LME average September 2006 v/s September 2005).

    Gross Income rose by 87.3%, mainly the result of increased sales volumes of rods and of sales prices.

    Administrative and selling expenses increased by 39.4%, from Ch$3,164 million to Ch$4,411 million, as a result of higher commercialization and operating activity. However, these reduced as a percentage of sales, from 6.8% to 4.8% in 2006.

    Operating income totalled Ch$10,041 million in 3Q06 against Ch$4,552 million in 3Q05, an increase of 120.6%.

    Brass Mills Sales in 3Q06 reached Ch$36,985 million, 61.7% more than the Ch$22,876 million produced the previous year. This was principally due to the higher copper price and higher export volumes from Chile.

    The cost of sales showed a rise of 54.8% as a result of the increase in volumes and the rise in the copper price. As a percentage of sales, costs fell from 92.5% to 88.5%. This is the result of improvements in export sales margins and greater operating efficiency.

    The operating margin rose from 7.5% to 11.5% of sales, mainly due to higher export volumes from Chile, accompanied by better margins and the application of the copper cost to the weighted average value.

    Administrative and selling expenses declined by 4.4%, from Ch$1,308 million to Ch$1,251 million. These expenses have fallen as a percentage of sales, from 5.7% to 3.4% in 2006.

    Operating income totalled Ch$2,989 million in 3Q06 against Ch$419 million in 3Q05.

    Flexible Packaging Sales increased by 7.6%, from Ch$11,058 million to Ch$11,901 million. Sales volumes in Chile declined by 3.4%, while those in Argentina rose by 29.8%. Total sales volumes rose by 7.2%.

    The cost of sales rose by 6.5%, from Ch$9,335 million to Ch$9,946 million. These costs in Chile reduced by 12.0% because of improvements in efficiency and procurement management, while those in Argentina increased by 62.9% due to the larger sales volumes. As a percentage of sales, costs declined from 84.4% to 83.6%.

    The operating margin increased from 15.6% to 16.4% of sales.

    Administrative and selling expenses rose slightly by 0.3%, from Ch$694 million to Ch$686 million.

    Aluminum Profiles Sales in 3Q06 increased by 12.9% compared to 2005, from Ch$7,193 million to Ch$8,120 million. This reflects a greater sales volume (10.1% compared to 3Q05) partially offset by reduced sales prices due to greater competition.

    The cost of sales rose by 22.9%, from Ch$5,465 million to Ch$6,716 million, as a result of higher sales volumes and the increase in the average price of the raw material (average price of Al in September 2006 was 34.4% higher in dollar terms than in September 2005).

    The operating margin fell from 24.0% to 17.3% of sales.

    Administrative and selling expenses increased slightly by 0.4%, from Ch$856 million to Ch$859 million. However, as a percentage of sales, these moved downward from 11.9% to 10.6% in 2006.

  3. Balance Sheet Analysis (Exhibit 7)

Assets The Company's total assets at September 30, 2006 amounted to Ch$ 423,696 million, 15.9% more than the previous year.

Current Assets

Amounted to Ch$ 234,687 million, 35.8% higher than at September 2005, mainly attributable to higher accounts receivable (+Ch$29,909 million) and inventories (+Ch$28,094 million), as a result of the greater sales volumes and the higher price of raw materials. These increases are compensated by a fall in other assets due to reduced securities under resale agreements (Ch$1,203 million), the reclassification of current assets to fixed assets and sales of disposable assets.

Fixed Assets

Amounted to Ch$147,582 million at September 2006, 4.2% lower than at the same date of the year before, mainly the result of greater accumulated depreciation (Ch$9,582 million) compensated by the devaluation of the Chilean peso against the US dollar and its direct effect on the volume of the fixed assets of the foreign subsidiaries. The investment in fixed assets during the 2006 was Ch$8,469 million (historic pesos), equivalent to 78.1% of the depreciation for the period.

Other Assets

Amounted to Ch$41,428 million, a 6.5% (+Ch$2,533 million) increase over 2005, mainly due to the transfer of the fixed assets of Optel Brasil (Ch$2,069 million approximately) and disused machinery of Madeco (Ch$977 million).

Liabilities Total liabilities at September 30, 2006 amounted to Ch$ 162,225 million, 12.6% less than at September 2005.

Bank Debt

Amounted to Ch$80,469 million at September 2006, representing a decrease of 23.1% (Ch$24,177 million) compared the same date of the previous year. This reflects reduced debt following the repayment made with the proceeds of the capital increase made in November 2005 of Ch$44,017, offset by the drawing of new debt (a syndicated loan signed during June 2006) to meet the working capital needs of the parent and its subsidiaries.

On June 5, 2006, the Company refinanced a total of US$50 million of its financial debt with a 5-year syndicated bank loan. Approximately US$12 million of this financing was used to prepay debts with Quiñenco. Another US$13 million was used to repay a bridging loan that BBVA had granted to the Company related to the capital increase. The other US$25 million is working capital which it was decided to finance at 2 years during which time it is expected to return to a normal copper price situation.

Bonds

Bonds payable amounted to Ch$27,351 million at September 2006, a 13.4% reduction with respect to the year before due to amortization. These bonds are payable semi-annually with respect to principal and interest (at UF + 5% per annum).

Equity The total outstanding at September 30, 2006 was Ch$250,207 million, which represents a 47.6% increase over September 2005.

Paid Capital

Amounted to Ch$265,107 million at September 2006, which compares positively with Ch$210,980 million at September 2005. 907,197,242 shares were subscribed for on November 26, 2005, for which Madeco received Ch$44,017 million. In addition, on May 5, 2006, all the remaining shares (192,802,758) issued and registered at October 17, 2005 were subscribed on the Santiago Stock Exchange. The Company received a total of approximately Ch$9,501 million from the transaction.

Share Premium

Declined from Ch$40,878 million at September 2005 to Ch$40,427 million at September 2006.

Other Reserves

Decreased from Ch$1,773 million at September 2005 to a negative Ch$857 million at September 2006, as a result of the depreciation of the peso and other foreign currencies between those dates and its impact on equity through the application of the accounting Technical Bulletin 64 with respect to foreign investments.

Accumulated Losses

Amounted to Ch$54,290 million at September 2006 compared to a loss of Ch$84,077 million at September 2005, following the positive accumulated results for 2006.

For further information contact:

Investor Relations

Tel. : (56 2) 520-1380

Fax : (56 2) 520-1545

E-mail : ir@madeco.cl

Web Site : www.madeco.cl

***************

Madeco, previously Manufacturas de Cobre MADECO S.A., was incorporated in 1944 as an open corporation under the laws of the Republic of Chile, and today has operations in Chile, Brazil, Peru and Argentina. Madeco is a Latin American leader in the manufacture of finished and semi-finished products in copper, copper alloys and aluminum. The Company is also a leader in the production of flexible packaging used in packing mass consumption products like foods, sweets and cosmetics.

Readers are warned not to place too much reliance on the future declarations contained in the above text, which are based on the position today. The Company is under no obligation to announce publicly the results of revisions to those declarations about the future which might be made to reflect events or circumstances after today including, but without limitation, changes in the Company's strategy or in its capital expenses, or to reflect the occurrence of unforeseen events.

Exhibit 1: Consolidated Income Statement

(Third Quarter)

Ch$ millions

US$ millions (1)

3T05

3T06

% Change

3T05

3T06

% Change

Revenues

87,707

148,370

69.2%

165.7

276.3

66.7%

COGS

(74,814)

(126,319)

68.8%

(141.4)

(235.2)

66.4%

Gross Income

12,893

22,052

71.0%

24.4

41.1

68.5%

SG&A

(6,022)

(7,217)

19.8%

(11.4)

(13.4)

18.1%

Operating Income

6,871

14,835

115.9%

13.0

27.6

112.8%

Financial income

81

222

172.9%

0.2

0.4

168.9%

Equity in earning (losses) of related companies

16

149

807.9%

0.0

0.3

794.7%

Other non-operating income

8

79

933.4%

0.0

0.1

918.3%

Financial expenses

(2,420)

(2,832)

17.1%

(4.6)

(5.3)

15.3%

Positive goodwill amortization

(356)

(419)

17.7%

(0.7)

(0.8)

16.0%

Other non-operating expenses

(938)

(491)

-47.7%

(1.8)

(0.9)

-48.4%

Price-level restatement

(469)

(1,788)

281.1%

(0.9)

(3.3)

275.6%

Non-Operating Results

(4,078)

(5,081)

24.6%

(7.7)

(9.5)

22.8%

Income (Loss) before income taxes

2,793

9,754

249.3%

5.3

18.2

244.2%

Income tax

(947)

(2,015)

N/A

(1.8)

(3.8)

N/A

Minority interest

(200)

(305)

52.7%

(0.4)

(0.6)

50.5%

Negative goodwill amortization

0

6

N/A

0.0

0.0

N/A

Net Income (Loss)

1,646

7,440

352.1%

3.1

13.9

345.5%

Gross Margin

14.7%

14.9%

-

14.7%

14.9%

-

SG&A / Sales

6.9%

4.9%

-

6.9%

4.9%

-

Operating Margin

7.8%

10.0%

-

7.8%

10.0%

-

1 Exchange rate September 2006 US$1.00 = 537,03

1 Exchange rate September 2006 US$1.00 = 529,2

 

Exhibit 2: Consolidated Income Statement

(Nine Months Ended September 2006)

Ch$ millions

US$ millions (1)

YTD Sep 05

YTD Sep 06

% Change

YTD Sep 05

YTD Sep 06

% Change

Revenues

284,048

427,878

50.6%

536.7

796.7

48.4%

COGS

(243,216)

(361,104)

48.5%

(459.6)

(672.4)

46.3%

Gross Income

40,832

66,774

63.5%

77.2

124.3

61.1%

SG&A

(18,326)

(20,744)

13.2%

(34.6)

(38.6)

11.5%

Operating Income

22,506

46,030

104.5%

42.5

85.7

101.5%

Financial income

635

1,123

77.0%

1.2

2.1

74.4%

Equity in earning (losses) of related companies

76

430

463.6%

0.1

0.8

455.3%

Other non-operating income

1,173

507

-56.8%

2.2

0.9

-57.4%

Financial expenses

(7,275)

(8,533)

17.3%

(13.7)

(15.9)

15.6%

Positive goodwill amortization

(1,328)

(1,302)

-2.0%

(2.5)

(2.4)

-3.4%

Other non-operating expenses

(2,215)

(1,572)

-29.0%

(4.2)

(2.9)

-30.1%

Price-level restatement

512

(1,668)

-426.1%

1.0

(3.1)

-421.3%

Non-Operating Results

(8,423)

(11,014)

30.8%

(15.9)

(20.5)

28.9%

Income (Loss) before income taxes

14,083

35,016

148.6%

26.6

65.2

145.0%

Income tax

(3,176)

(6,337)

99.5%

(6.0)

(11.8)

96.6%

Minority interest

(433)

(1,112)

157.0%

(0.8)

(2.1)

153.3%

Negative goodwill amortization

0

20

N/A

0.0

0.0

N/A

Net Income (Loss)

10,474

27,587

163.4%

19.8

51.4

159.5%

Gross Margin

14.4%

15.6%

-

14.4%

15.6%

-

SG&A / Sales

6.5%

4.8%

-

6.5%

4.8%

-

Operating Margin

7.9%

10.8%

-

7.9%

10.8%

-

1 Exchange rate September 2006 US$1.00 = 537.03

1 Exchange rate September 2006 US$1.00 = 529.2

 

 

Exhibit 3: EBITDA by Business Unit

(Third Quarter)

Third Quarter 2005

Ch$ million

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

8,242

38,338

22,876

11,058

7,193

87,707

COGS

(7,694)

(31,171)

(21,149)

(9,335)

(5,465)

(74,814)

Gross Income

548

7,168

1,727

1,723

1,728

12,894

SG&A

(27)

(3,137)

(1,308)

(694)

(856)

(6,022)

Operating Income

521

4,031

419

1,029

872

6,872

EBITDA

531

5,210

1,058

1,544

1,134

9,477

Gross Margin

6.6%

18.7%

7.5%

15.6%

24.0%

14.7%

SG&A / Sales

0.3%

8.2%

5.7%

6.3%

11.9%

6.9%

EBITDA Margin

6.4%

13.6%

4.6%

14.0%

15.8%

10.8%

Segment Contribution

% Revenues

9.4%

43.7%

26.1%

12.6%

8.2%

100.0%

% EBITDA

5.6%

55.0%

11.2%

16.3%

12.0%

100.0%

Third Quarter 2006

Ch$ million

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

22,947

68,417

36,985

11,901

8,120

148,370

COGS

(21,780)

(55,132)

(32,745)

(9,946)

(6,716)

(126,319)

Gross Income

1,167

13,285

4,240

1,955

1,404

22,051

SG&A

(40)

(4,371)

(1,251)

(696)

(859)

(7,217)

Operating Income

1,127

8,914

2,989

1,259

545

14,834

EBITDA

1,166

10,614

3,656

1,890

814

18,140

Gross Margin

5.1%

19.4%

11.5%

16.4%

17.3%

14.9%

SG&A / Sales

0.2%

6.4%

3.4%

5.8%

10.6%

4.9%

EBITDA Margin

5.1%

15.5%

9.9%

15.9%

10.0%

12.2%

Segment Contribution

% Revenues

15.5%

46.1%

24.9%

8.0%

5.5%

100.0%

% EBITDA

6.4%

58.5%

20.2%

10.4%

4.5%

100.0%

2006 versus 2005

% change

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

178.4%

78.5%

61.7%

7.6%

12.9%

69.2%

COGS

183.1%

76.9%

54.8%

6.5%

22.9%

68.8%

Gross Income

113.0%

85.4%

145.5%

13.5%

-18.8%

71.0%

SG&A

48.1%

39.3%

-4.4%

0.3%

0.4%

19.8%

Operating Income

116.3%

121.2%

613.4%

22.4%

-37.5%

115.9%

EBITDA

119.6%

103.7%

245.6%

22.4%

-28.2%

91.4%

Exhibit 4: EBITDA by Business Unit

(Nine Months Ended September 2006)

YTD Sep 05

Ch$ million

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

24,898

138,510

63,360

34,605

22,675

284,048

COGS

(23,360)

(114,605)

(57,569)

(30,052)

(17,630)

(243,216)

Gross Income

1,538

23,905

5,791

4,553

5,045

40,832

SG&A

(83)

(9,840)

(3,642)

(2,322)

(2,439)

(18,326)

Operating Income

1,455

14,065

2,149

2,231

2,606

22,506

EBITDA

1,463

18,248

4,038

3,936

3,330

31,015

Gross Margin

6.2%

17.3%

9.1%

13.2%

22.2%

14.4%

SG&A / Sales

0.3%

7.1%

5.7%

6.7%

10.8%

6.5%

EBITDA Margin

5.9%

13.2%

6.4%

11.4%

14.7%

10.9%

Segment Contribution

% Revenues

8.8%

48.8%

22.3%

12.2%

8.0%

100.0%

% EBITDA

4.7%

58.8%

13.0%

12.7%

10.7%

100.0%

YTD Sep 06

Ch$ million

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

68,633

200,637

98,188

34,978

25,442

427,878

COGS

(62,063)

(164,914)

(84,376)

(29,097)

(20,654)

(361,104)

Gross Income

6,570

35,723

13,812

5,881

4,788

66,774

SG&A

(225)

(12,133)

(3,846)

(2,072)

(2,468)

(20,744)

Operating Income

6,345

23,590

9,966

3,809

2,320

46,030

EBITDA

6,455

29,030

11,880

5,688

3,107

56,160

Gross Margin

9.6%

17.8%

14.1%

16.8%

18.8%

15.6%

SG&A / Sales

0.3%

6.0%

3.9%

5.9%

9.7%

4.8%

EBITDA Margin

9.4%

14.5%

12.1%

16.3%

12.2%

13.1%

Segment Contribution

% Revenues

16.0%

46.9%

22.9%

8.2%

5.9%

100.0%

% EBITDA

11.5%

51.7%

21.2%

10.1%

5.5%

100.0%

2005 versus 2006

% change

COPPER ROD

WIRE & CABLE

BRASS MILLS

F. PACKAGING

PROFILES

Total

Revenues

175.7%

44.9%

55.0%

1.1%

12.2%

50.6%

COGS

165.7%

43.9%

46.6%

-3.2%

17.2%

48.5%

Gross Income

327.2%

49.4%

138.5%

29.2%

-5.1%

63.5%

SG&A

171.1%

23.3%

5.6%

-10.8%

1.2%

13.2%

Operating Income

336.1%

67.7%

363.8%

70.7%

-11.0%

104.5%

EBITDA

341.2%

59.1%

194.2%

44.5%

-6.7%

81.1%

 

Exhibit 5: EBITDA by Business Unit and Country

(Third Quarter)

Third Quarter 2005

Third Quarter 2006

(Ch$ million)

(Ch$ million)

Chile

Peru

Interco.

COPPER ROD

Chile

Peru

Interco.

COPPER ROD

Tons (Third parties)

2,208

2,083

0

4,291

2,696

2,799

0

5,495

Tons (Intercompany)

2,591

(306)

(2,285)

0

3,196

0

(3,196)

0

Tons (Total)

4,799

1,777

(2,285)

4,291

5,892

2,799

(3,196)

5,495

Revenues (Third parties)

5,078

3,164

0

8,242

11,590

11,357

0

22,947

Revenues (Intercompany)

5,872

(690)

(5,182)

0

13,841

0

(13,841)

0

Total revenues

10,950

2,474

(5,182)

8,242

25,431

11,357

(13,841)

22,947

COGS

(10,724)

(2,233)

5,263

(7,694)

(24,681)

(10,937)

13,838

(21,780)

Gross Income

226

241

81

548

750

420

(3)

1,167

SG&A

0

(22)

(5)

(27)

0

(40)

0

(40)

Operating Income

226

219

76

521

750

380

(3)

1,127

EBITDA

236

221

74

531

787

380

(1)

1,166

Gross Margin

4.5%

7.6%

6.6%

6.5%

3.7%

5.1%

EBITDA Margin

4.6%

7.0%

6.4%

6.8%

3.3%

5.1%

Chile

Brazil

Optical F.

Argentina

Peru

Interco.

WIRE & CABLE

Chile

Brazil

Optical F.

Argentina

Peru

Interco.

WIRE & CABLE

Tons (Third parties)

3,039

5,873

0

607

3,030

0

12,549

1,570

6,709

0

908

2,997

0

12,184

Tons (Intercompany)

14

75

0

0

0

(89)

0

2

117

0

270

204

(593)

0

Tons (Total)

3,053

5,948

0

607

3,030

(89)

12,549

1,572

6,826

0

1,178

3,201

(593)

12,184

Kms.

0

0

0

0

0

0

0

0

0

1,057

0

0

0

1,057

Revenues (Third parties)

11,425

16,506

0

1,229

9,178

0

38,338

10,751

35,853

293

2,954

18,566

0

68,417

Revenues (Intercompany)

348

12

0

(35)

0

(325)

0

285

599

0

498

868

(2,250)

0

Total revenues

11,773

16,518

0

1,194

9,178

(325)

38,338

11,036

36,452

293

3,452

19,434

(2,250)

68,417

COGS

(10,050)

(13,217)

0

(1,054)

(7,275)

425

(31,171)

(8,786)

(29,385)

(329)

(2,861)

(16,089)

2,318

(55,132)

Gross Income

1,724

3,301

0

140

1,903

100

7,168

2,250

7,067

(36)

591

3,345

68

13,285

SG&A

(494)

(1,807)

0

(89)

(458)

(289)

(3,137)

(478)

(2,800)

(29)

(123)

(639)

(302)

(4,371)

Operating Income

1,230

1,494

0

51

1,445

(189)

4,031

1,772

4,267

(65)

468

2,706

(234)

8,914

EBITDA

1,590

2,164

0

63

1,624

(231)

5,210

2,121

5,309

(19)

547

2,916

(260)

10,614

Gross Margin

15.1%

20.0%

11.4%

20.7%

18.7%

20.9%

19.7%

-12.3%

20.0%

18.0%

19.4%

EBITDA Margin

13.9%

13.1%

5.1%

17.7%

13.6%

19.7%

14.8%

-6.5%

18.5%

15.7%

15.5%

Chile

Coin

Argentina

Interco.

BRASS MILLS

Chile

Coin

Argentina

Interco.

BRASS MILLS

Tons (Third parties)

7,374

531

655

0

8,560

6,711

630

550

0

7,891

Tons (Intercompany)

240

55

57

(352)

0

399

0

15

(414)

0

Tons (Total)

7,614

586

712

(352)

8,560

7,110

630

565

(414)

7,891

Revenues (Third parties)

19,441

1,988

1,447

0

22,876

30,934

3,539

2,512

0

36,985

Revenues (Intercompany)

2,505

207

95

(2,807)

0

2,311

5

69

(2,385)

0

Total revenues

21,946

2195

1,542

(2,807)

22,876

33,245

3,544

2,581

(2,385)

36,985

COGS

(20,611)

(2,092)

(1,306)

2,860

(21,149)

(30,392)

(2,562)

(2,186)

2,395

(32,745)

Gross Income

1,335

103

236

53

1,727

2,853

982

395

10

4,240

SG&A

(939)

(126)

(143)

(100)

(1,308)

(815)

(160)

(183)

(93)

(1,251)

Operating Income

396

(23)

93

(47)

419

2,038

822

212

(83)

2,989

EBITDA

910

60

140

(52)

1,058

2,566

889

288

(87)

3,656

Gross Margin

6.9%

5.2%

16.3%

7.5%

9.2%

27.7%

15.7%

11.5%

EBITDA Margin

4.7%

3.0%

9.7%

4.6%

8.3%

25.1%

11.5%

9.9%

Chile

Argentina

Interco.

F. PACKAGING

Chile

Argentina

Interco.

F. PACKAGING

Tons (Third parties)

2584

1213

0

3797

2497

1575

0

4072

Tons (Intercompany)

0

0

Tons (Total)

2,584

1,213

0

3,797

2,497

1,575

0

4,072

Revenues (Third parties)

8,334

2,722

2

11,058

7,560

4,343

(2)

11,901

Revenues (Intercompany)

0

0

Total revenues

8,334

2,722

2

11,058

7,560

4,343

(2)

11,901

COGS

(7,024)

(2,311)

0

(9,335)

(6,182)

(3,764)

0

(9,946)

Gross Income

1,310

411

2

1,723

1,378

579

(2)

1,955

SG&A

(443)

(201)

(50)

(694)

(459)

(188)

(49)

(696)

Operating Income

867

210

(48)

1,029

919

391

(51)

1,259

EBITDA

1,236

358

(50)

1,544

1,347

590

(47)

1,890

Gross Margin

15.7%

15.1%

15.6%

18.2%

13.3%

16.4%

EBITDA Margin

14.8%

13.2%

14.0%

17.8%

13.6%

15.9%

Chile

PROFILES

Chile

PROFILES

Tons (Third parties)

2,593

2,593

2,854

2,854

Tons (Intercompany)

0

0

0

0

Tons (Total)

2,593

2,593

2,854

2,854

Revenues (Third parties)

7,193

7,193

8,120

8,120

Revenues (Intercompany)

0

0

0

0

Total revenues

7,193

7,193

8,120

8,120

COGS

(5,465)

(5,465)

(6,716)

(6,716)

Gross Income

1,728

1,728

1,404

1,404

SG&A

(856)

(856)

(859)

(859)

Operating Income

872

872

545

545

EBITDA

1,134

1,134

814

814

Gross Margin

24.0%

24.0%

17.3%

17.3%

EBITDA Margin

15.8%

15.8%

10.0%

10.0%

Exhibit 6: EBITDA by Business Unit and Country

(Nine Months Ended September 2006)

YTD Sep 05

YTD Sep 06

(Ch$ million)

(Ch$ million)

Chile

Peru

Interco.

COPPER ROD

Chile

Peru

Interco.

COPPER ROD

Tons (Third parties)

6,473

5,138

0

11,611

8,300

10,374

0

18,674

Tons (Intercompany)

5,562

3,171

(8,733)

0

9,247

0

(9,247)

0

Tons (Total)

12,035

8,309

(8,733)

11,611

17,547

10,374

(9,247)

18,674

Revenues (Third parties)

14,467

10,431

0

24,898

30,676

37,957

0

68,633

Revenues (Intercompany)

12,412

6,298

(18,710)

0

35,409

0

(35,409)

0

Total revenues

26,879

16,729

(18,710)

24,898

66,085

37,957

(35,409)

68,633

COGS

(26,110)

(15,868)

18,618

(23,360)

(61,518)

(34,848)

34,303

(62,063)

Gross Income

769

861

(92)

1,538

4,567

3,109

(1,106)

6,570

SG&A

0

(131)

48

(83)

0

(225)

0

(225)

Operating Income

769

730

(44)

1,455

4,567

2,884

(1,106)

6,345

EBITDA

781

732

(50)

1,463

4,675

2,885

(1,105)

6,455

Gross Margin

5.3%

8.3%

6.2%

14.9%

8.2%

9.6%

EBITDA Margin

5.4%

7.0%

5.9%

15.2%

7.6%

9.4%

Chile

Brazil

Optical F.

Argentina

Peru

Interco.

WIRE & CABLE

Chile

Brazil

Optical F.

Argentina

Peru

Interco.

WIRE & CABLE

Tons (Third parties)

8,658

19,945

0

1,584

9,472

0

39,659

6,489

23,218

0

2,933

9,415

0

42,055

Tons (Intercompany)

35

855

0

202

0

(1,092)

0

151

518

0

378

351

(1,398)

0

Tons (Total)

8,693

20,800

0

1,786

9,472

(1,092)

39,659

6,640

23,736

0

3,311

9,766

(1,398)

42,055

Kms.

0

0

0

0

0

0

0

0

0

1,973

0

0

0

1,973

Revenues (Third parties)

32,000

67,632

0

4,156

34,722

0

138,510

34,110

106,211

1,056

9,036

50,224

0

200,637

Revenues (Intercompany)

1,074

2,240

0

311

4

(3,629)

0

1,553

2,052

0

685

1,474

(5,764)

0

Total revenues

33,074

69,872

0

4,467

34,726

(3,629)

138,510

35,663

108,263

1,056

9,721

51,698

(5,764)

200,637

COGS

(28,382)

(57,555)

0

(3,926)

(28,413)

3,671

(114,605)

(30,012)

(88,798)

(1,053)

(7,984)

(42,590)

5,523

(164,914)

Gross Income

4,692

12,317

0

541

6,313

42

23,905

5,651

19,465

3

1,737

9,108

(241)

35,723

SG&A

(1,465)

(5,677)

0

(308)

(1,567)

(823)

(9,840)

(1,594)

(7,295)

(72)

(436)

(1,875)

(861)

(12,133)

Operating Income

3,227

6,640

0

233

4,746

(781)

14,065

4,057

12,170

(69)

1,301

7,233

(1,102)

23,590

EBITDA

4,302

9,130

0

264

5,431

(879)

18,248

5,098

15,694

74

1,438

7,886

(1,160)

29,030

Gross Margin

14.7%

18.2%

13.0%

18.2%

17.3%

16.6%

18.3%

0.3%

19.2%

18.1%

17.8%

EBITDA Margin

13.4%

13.5%

6.4%

15.6%

13.2%

14.9%

14.8%

7.0%

15.9%

15.7%

14.5%

Chile

Coin

Argentina

Interco.

BRASS MILLS

Chile

Coin

Argentina

Interco.

BRASS MILLS

Tons (Third parties)

19,988

1,055

1,976

0

23,019

20,077

1,409

1,841

0

23,327

Tons (Intercompany)

1,304

121

246

(1,671)

0

1,454

0

15

(1,469)

0

Tons (Total)

21,292

1,176

2,222

(1,671)

23,019

21,531

1,409

1,856

(1,469)

23,327

Revenues (Third parties)

53,671

4,542

5,147

0

63,360

82,942

7,654

7,592

0

98,188

Revenues (Intercompany)

6,998

491

608

(8,097)

0

9,043

1,630

62

(10,735)

0

Total revenues

60,669

5,033

5,755

(8,097)

63,360

91,985

9,284

7,654

(10,735)

98,188

COGS

(56,216)

(4,517)

(5,030)

8,194

(57,569)

(81,275)

(7,558)

(6,203)

10,660

(84,376)

Gross Income

4,453

516

725

97

5,791

10,710

1,726

1,451

(75)

13,812

SG&A

(2,592)

(297)

(495)

(258)

(3,642)

(2,631)

(423)

(546)

(246)

(3,846)

Operating Income

1,861

219

230

(161)

2,149

8,079

1,303

905

(321)

9,966

EBITDA

3,403

458

404

(227)

4,038

9,632

1,510

1,109

(371)

11,880

Gross Margin

8.3%

11.4%

14.1%

9.1%

12.9%

22.6%

19.1%

14.1%

EBITDA Margin

6.3%

10.1%

7.8%

6.4%

11.6%

19.7%

14.6%

12.1%

Chile

Argentina

Interco.

F. PACKAGING

Chile

Argentina

Interco.

F. PACKAGING

Tons (Third parties)

7,680

3,487

0

11,167

7,628

4,180

0

11,808

Tons (Intercompany)

0

0

Tons (Total)

7,680

3,487

0

11,167

7,628

4,180

0

11,808

Revenues (Third parties)

24,805

9,799

1

34,605

23,365

11,620

(7)

34,978

Revenues (Intercompany)

0

0

Total revenues

24,805

9,799

1

34,605

23,365

11,620

(7)

34,978

COGS

(21,491)

(8,561)

0

(30,052)

(18,943)

(10,161)

7

(29,097)

Gross Income

3,314

1,238

1

4,553

4,422

1,459

0

5,881

SG&A

(1,528)

(655)

(139)

(2,322)

(1,457)

(476)

(139)

(2,072)

Operating Income

1,786

583

(138)

2,231

2,965

983

(139)

3,809

EBITDA

2,910

1,166

(140)

3,936

4,236

1,590

(138)

5,688

Gross Margin

13.4%

12.6%

13.2%

18.9%

12.6%

16.8%

EBITDA Margin

11.7%

11.9%

11.4%

18.1%

13.7%

16.3%

Chile

PROFILES

Chile

PROFILES

Tons (Third parties)

8,125

8,125

9,585

9,585

Tons (Intercompany)

0

0

0

0

Tons (Total)

8,125

8,125

9,585

9,585

Revenues (Third parties)

22,675

22,675

25,442

25,442

Revenues (Intercompany)

0

0

0

0

Total revenues

22,675

22,675

25,442

25,442

COGS

(17,630)

(17,630)

(20,654)

(20,654)

Gross Income

5,045

5,045

4,788

4,788

SG&A

(2,439)

(2,439)

(2,468)

(2,468)

Operating Income

2,606

2,606

2,320

2,320

EBITDA

3,330

3,330

3,107

3,107

Gross Margin

22.2%

22.2%

18.8%

18.8%

EBITDA Margin

14.7%

14.7%

12.2%

12.2%

 

 

Exhibit 7: Consolidated Balance Sheet

Ch$ millions

US$ millions (1)

YTD Sep 05

YTD Sep 06

YTD Sep 05

YTD Sep 06

Cash

2,993

5,964

5.7

11.1

Time deposits and marketable securities

1,032

2,169

1.9

4.0

Accounts receivable

68,375

98,284

129.2

183.0

Accounts receivable from related companies

3,926

936

7.4

1.7

Inventories

78,893

106,987

149.1

199.2

Recoverable taxes

3,513

10,515

6.6

19.6

Prepaid expenses and other current assets

14,049

9,832

26.5

18.3

Current Assets

172,779

234,687

326.5

437.0

Property, plant and equipment (net)

153,974

147,582

291.0

274.8

Investments

11,049

12,122

20.9

22.6

Goodwill (net)

20,208

17,554

38.2

32.7

Long-term receivables

414

502

0.8

0.9

Other

7,224

11,251

13.7

20.9

Other Assets

38,895

41,428

73.5

77.1

ASSETS

365,649

423,696

690.9

789.0

Short-term bank borrowings

81,151

18,686

153.3

34.8

Current portion of long-term bank and other debt

3,107

14,844

5.9

27.6

Current portion of bonds payable

4,644

4,784

8.8

8.9

Current portion of long-term liabilities

522

551

1.0

1.0

Dividends payable

3

60

0.0

0.1

Accounts payable

11,379

25,460

21.5

47.4

Notes payable

7,208

1,290

13.6

2.4

Other payables

289

888

0.5

1.7

Notes and accounts payable to related companies

300

347

0.6

0.6

Accrued expenses

7,368

8,736

13.9

16.3

Withholdings payable

1,946

1,299

3.7

2.4

Deferred income

817

2,914

1.5

5.4

Income taxes

0

0

-

-

Other current liabilities

1,359

689

2.6

1.3

Current Liabilities

120,092

80,548

226.9

150.0

Long-term bank and other debt

35,191

53,994

66.5

100.5

Bonds payable

26,929

22,567

50.9

42.0

Accrued expenses

3,419

5,116

6.5

9.5

Long-Term Liabilities

65,540

81,677

123.8

152.1

Minority Interest

10,463

11,264

19.8

21.0

Common stock

210,980

265,107

398.7

493.7

Share premium

40,878

40,247

77.2

74.9

Reserves

1,773

(857)

3.3

(1.6)

Retained earnings

(84,077)

(54,290)

(158.9)

(101.1)

Total Shareholders' Equity

169,554

250,207

320.4

465.9

LIABILITIES AND SHAREHOLDERS' EQUITY

365,649

423,696

690.9

789.0

1 Exchange rate September 2006 US$1.00 = 537.03

1 Exchange rate September 2006 US$1.00 = 529.2

 

 

Exhibit 8: Consolidated Statement of Cash Flow

Ch$ millions

US$ millions (1)

YTD Sep 05

YTD Sep 06

YTD Sep 05

YTD Sep 06

Cash received from customers

331,655

473,295

626.7

881.3

Financial income received

913

739

1.7

1.4

Dividends and other distributions

-

92

-

0.2

Other incomes

197

7,586

0.4

14.1

Payments to suppliers and employees

(315,924)

(482,608)

(597.0)

(898.7)

Interests paid

(10,077)

(6,737)

(19.0)

(12.5)

Income taxes paid

(2,023)

(3,590)

(3.8)

(6.7)

Other expenses

(442)

(554)

(0.8)

(1.0)

Added Value Tax and others

(2,940)

(3,517)

(5.6)

(6.5)

Cash Flow from Operating Activities

1,358

(15,294)

2.6

(28.5)

Sale of Property, Plant and Equipment

320

2,467

0.6

4.6

Sale of permanent investments

133

-

0.3

-

Sale of other investments

-

-

-

-

Other proceeds from investments

1,030

1,416

1.9

2.6

Acquisition of fixed assets

(9,225)

(9,038)

(17.4)

(16.8)

Permanent investments

(192)

(4)

(0.4)

(0.0)

Other disbursements

(4,987)

-

(9.4)

-

Cash Flow used in Investing Activities

(12,921)

(5,160)

(24.4)

(9.6)

Issuance of shares

-

9,501

-

17.7

Loans obtained

98,773

119,940

186.6

223.3

Registered loans from related companies

-

-

-

-

Other financing sources

-

-

-

-

Dividends paid

(106)

(449)

(0.2)

(0.8)

Repayments of bank borrowings

(89,504)

(101,011)

(169.1)

(188.1)

Repayments of bonds

(2,004)

(2,108)

(3.8)

(3.9)

Payment of expenses related to shares issuance

-

-

-

-

Payment loans documented from related companies

-

(1,559)

-

(2.9)

Others

(512)

(996)

(1.0)

(1.9)

Cash Flow provided by Financing Activities

6,647

23,318

12.6

43.4

Net Cash Flow for the Period

(4,916)

2,864

(9.3)

5.3

Effect of price-level restatements on cash and cash equivalents

(95)

726

(0.2)

1.4

Net increase in cash and cash equivalents

(5,011)

3,590

(9.5)

6.7

Cash and cash equivalents at the beginning of year

13,681

7,986

25.9

14.9

Cash and cash equivalents at end of the period

8,671

11,576

16.4

21.6

_____________________

1 Exchange rate September 2006 US$1.00 = 537.03

1 Exchange rate September 2006 US$1.00 = 529.2