6-K 1 madeco.htm Madeco Second Quarter 2007 6-k Report

FOR IMMEDIATE RELEASE

MADECO S.A. ANNOUNCES

CONSOLIDATED RESULTS FOR THE SECOND QUARTER OF 2007

(Santiago, Chile, August 3, 2007) Madeco S.A. (“Madeco”) (NYSE ticker: MAD) today announced its consolidated financial results in Chilean GAAP for the first quarter ended June 30, 2007. All figures are expressed in Chilean pesos as of June 30, 2007. Translations to US dollars made in this report are based on the exchange rate on that date (US$1.00 = Ch$526.86) and UF1.00= Ch$ 18,624.17 as of June 30, 2007.

Madeco Highlights

  • For the second quarter of the year, the Company reported net income of Ch$6,301 million, 54.0% less than the Ch$13,708 million reported for same period of 2006. Operating income decreased from Ch$21,726 million to Ch$11,752 million due to higher operational costs and the lack of extraordinary operational gains obtained in 2006 (this extraordinary gain, that was estimated at Ch$6,500 million, was explained by the sharp rise in the copper price in 2Q06). The charge for income taxes decreased by Ch$959 million. The charges related to minority interest and others increased by Ch$508 million. These lower utilities were offset by a lower charge for the non-operating income of Ch$2.119 million.

  • Revenues in 2Q07 increased by 1.8% compared to 2Q06, reaching Ch$162,969 million. This increase is explained by sales associated with the Company’s acquisitions in the beginning of 2007, as well as increased prices of raw materials (7.1% and 4.1% for copper and aluminum, compared to 2006 respectively). In spite of these positive effects, the Brass Mills unit and the copper rod division showed significant reductions in their revenues of 23.3% and 20.2%, respectively, compared to 2Q06.

  • Operating income in 2Q07 decreased by 45.9% reaching Ch$11,752 million. This was mostly attributable to a decline of 31.9% in gross income (explained mostly by higher energy and operational costs and increased raw material prices), an increase of 7.9% in selling, general and administrative expenses, lack of the extraordinary operational gain mentioned above and lower margins obtained by the Brass Mills Unit. The decrease in operating income was partially offset by higher sales volumes compared to the same period of 2006.

  • As of the second quarter of 2007, cash and cash equivalents was Ch$14,762 million compared to Ch$7,470 million in 2Q06. This is explained by higher net cash flow from operating activities and higher initial cash level, partially offset by lower cash flow from financing and higher in investing activities.

  • As was communicated after the Annual and Extraordinary Shareholders’ Meetings (both celebrated on April 24, 2007) the Company changed its dividend policy of net income distribution from 50% to 30% and absorbed its accumulated losses by a charge to the Company’s share capital. This loss absorption would allow the Company to pay dividends in 2008.

  1. Highlights of the Income Statement (Exhibit 1 and 2)
Net Income Net income for 2Q07 reached Ch$6,306 million, 54.0% lower than the Ch$13,710 million produced the year before. This was mainly due to lower operating income of Ch$9,974 million (-45.9%) compared to the second quarter of 2006. The reduction was partially offset by a decrease in non-operating losses of Ch$2,119 million and lower charges for income tax, minority interest and others of Ch$451 million.

Revenues Revenues in 2Q07 were Ch$162,969 million, a 1.8% increase over the same period of the previous year. The increase in consolidated revenues is basically explained by higher copper and aluminum prices during 2007 and the contribution from the new consolidating companies (Peruplast, Tech Pak y Cedsa) which have an addition effect of Ch$17,789 million. Sales volumes showed an increase of 3,232 tonnes (includes volumes of the new consolidating companies), 8.7% above 2Q06 with an effect on sales of Ch$2,899 million, in spite of lower volumes sold in the Brass Mills unit and copper rod division (2,005 tonnes and 2,321 tonnes respectively).

Gross Income Gross income in 2Q07 was Ch$19,996 million, 31.9% lower than the Ch$29,366 million reported in 2Q06 as a result of a 9.4% increase in cost of sales and a 1.8% increase in revenues. The increase in the cost of sales is basically due to the higher cost of principal raw materials, like copper and aluminum. The rise in the average copper price (LME) in the second quarter of 2007 was 7.1% in dollar terms (from US$7,210 to US$7,642 per tonne) compared to the average price in the same quarter of 2006; in the case aluminum, the rise was 4.1%, also in dollar terms (from US$2,654 to US$2,762 per tonne).

Operating Income Operating income for 2Q07 amounted to Ch$11,752 million, 45.9% lower than the Ch$21,726 million obtained in the same period the year before. The reduction in operating income is explained by a decrease of 31.9% in gross income, the lack of extraordinary operational gains mentioned above, lower margins in the Brass Mills unit and an increase of 7.9% in selling, general and administrative expenses as a result of the higher turnover, costs involved in the implementation of the Sarbanes Oxley Act and the consolidating expenses of Peruplast, Tech Pak and Cedsa.

Non-Operating Result The Company’s non-operating losses for 2Q07 amounted to Ch$2,975 million, 41.6% lower than the losses of Ch$5,094 million reported in 2Q06. This is basically due to a profit of Ch$188 million in foreign exchange differences and price-level restatement results compared to the loss of Ch$1,626 million of the year before. The higher gain from exchange differences in the 2Q07 is principally the result of the higher appreciation of the Brazilian Real (BRL) compared to 2Q06, as well as the appreciation of the Colombian Peso. In addition to this effect, the net charge for interest expense decreased during this quarter, due to lower expenses related to Company’s bonds (that were reduced in 2007), and higher income from interest income.

Income Tax During 2Q07, income tax amounted to Ch$1,564 million, compared to Ch$2,523 million in the same period of the year before, as a result of lower profits before taxes during the period.

Minority Interest The Company’s minority interest charges (reflecting mainly the portion of earnings/losses corresponding to the participation of minority shareholders in the subsidiaries Alusa, Indeco, Indalum and Cedsa) amounted to Ch$924 million in 2Q07 compared to Ch$405 million in 2Q06, as a result of the addition of Cedsa, Peruplast and Tech Pak (Peruplast and Tech Pak consolidate with Alusa).

  1. Analysis by Business Unit (Exhibits 3 to 6)
Wire and Cable Revenues reached by this unit in 2Q07 amounted to Ch$101,334 million, of which Ch$18,688 million came from sales of copper rod and Ch$82,646 million from sales of cables. Sales volume increased by 19.6% due to an increase in aluminum cables sold in Brazil and Argentina (2.9% and 206.5%, respectively) and the addition of Cedsa (Ch$6,688 million or 1,177 tonnes). These volumes were partially offset by reduced sales of copper rod in Peru and Chile of 43.4% and 18.9%, respectively, and lower sales of copper cables in Brazil of 9.7%.

The cost of sales amounted to Ch$88,494 million in 2Q07, 7.3% higher than the Ch$82,451 million reported the year before. This increase was principally due to the increased volume sold and to the increased LME copper and aluminum prices which rose by 7.1% and 4.1% respectively, in dollar terms.

Gross Income decreased by 29.6% from Ch$18,232 to Ch$12,840 in 2Q07, as the result of higher prices of raw materials, higher operational costs and the lack of the extraordinary gains compared to 2Q06.

Selling, general and administrative expenses rose by 4.1% in 2Q07 (from Ch$4,606 million to Ch$4,799 million), as the result of the increased sales activity, the higher costs involved in the implementation of the Sarbanes Oxley Act and the consolidating expenses related to Cedsa.

Operating income totaled Ch$8,041 million in 2Q07 compared to Ch$13,626 million in 2Q06, a decrease of 41.0%, explained by lower gross income and higher selling, general and administrative expenses in cables and copper rod divisions.

Brass Mills Revenues in 2Q07 reached to Ch$29,168 million, 23.3% lower than the Ch$38,038 million reported in 2Q06. This was due to a reduction in volumes sold in the Chilean and Argentinean markets, as well as a reduction in export sales. These effects were partially offset by the higher price of copper in 2Q07 compared to 2Q06.

Cost of sales showed a decrease of 10.5% as a result of the lower sales volume. However, these costs increased from 80.8% to 94.3%, as percentage of sales, due to higher prices of energy and operational costs, as well as higher prices of raw materials.

Gross income was reduced by 77.4% in 2Q07, explained principally by lower sales, higher cost of sales (in terms of percentage of sales) and the lack of the extraordinary gain observed in 2Q06 as a result of the abrupt rise in copper prices.

Selling, general and administrative expenses decreased by 7.4%, from Ch$1,419 million to Ch$1,314 million. On the other hand, as a percentage of sales expenses increased from 3.7% to 4.5%.

Operating income amounted to Ch$337 million in 2Q07 compared to Ch$5,879 million in 2Q06, due to the lower sales volume and lower margins.

Flexible Packaging Revenues increased by 93.0%, from Ch$11,887 million to Ch$22,947 million, including the revenues of Peruplast and Tech Pak subsidiaries of Ch$11,975 million. Sales volume increased by 157.2% in 2Q07 (Chile rose by 5.8% and Argentina by 6.1%). The sales volumes of Peruplast and Tech Pak reached 5,910 tonnes (after eliminating inter-company sales), making up a 58.8% of the total Unit’s sales volume in 2Q07.

Cost of sales rose by 97.7%, from Ch$9,850 million to Ch$19,469 million. These costs include Peruplast and Tech Pak subsidiaries which amounted to Ch$10,116 million. In addition, as a percentage of sales, costs increased from 82.9% to 84.8%.

Gross income increased by 70.7% from Ch$2,037 million in 2Q06, mainly due to the consolidation of the Peruvian subsidiaries. However, as a percentage of sales, the margin decreased from 17.1% to 15.2%, partially explained by higher costs of energy and raw materials (aluminum, propylene, etc.) and higher labor costs in Argentina.

Selling, general and administrative expenses rose by Ch$1,114 million from Ch$763 million in 2Q06, an increase of 46.0% (the Peruvian subsidiaries represented 36.7% of the Unit’s expenses). In spite of higher expenses, as a percentage of sales, SG&A decreased from 6.4% to 4.9% in 2Q07.

Operating income in 2Q07 was Ch$2,364 million compared to Ch$1,274 million in 2Q06.

Aluminum Profiles Revenues in 2Q07 increased by 0.6% compared to 2Q06, from Ch$9,459 million to Ch$9,520 million. The increased revenues are explained by higher prices (aluminum prices in dollar terms, increased around 4.1% during the second quarter compared to 2006), in spite of lower sales volume (volumes decreased by 22.6% compared to 2Q06).

Cost of sales decreased by 2.2%, from Ch$7,658 million to Ch$7,488 million. As percentage of sales, the Unit’s costs decreased from 81.0% to 78.7%, although the Company incurred raw materials costs.

Gross income in 2Q07 increased by 12.8% compared to Ch$1,801 million in 2Q06. As a percentage of sales, the ratio increased from 19.0% to 21.3% in 2Q07.

Selling, general and administrative expenses increased by 19.7%, from Ch$854 million to Ch$1,022 million due to the higher sales activity. In addition, as a percentage of sales, expenses increased from 9.0% to 10.7% during the second quarter of 2007.

Operating income for 2Q07 was Ch$1,010 million, 6.7% higher than the Ch$947 million reported in 2Q06, due to the higher gross income, although selling, general and administrative expenses also increased which partially offset this effect.

  1. Balance Sheet Analysis (Exhibit 7)
Assets The Company’s assets as of June 30, 2007 amounted to Ch$486,466 million, an increase of Ch$434,742 million reported as of June 30, 2006.

Current Assets

Amounted to Ch$284,748 million, 19.6% higher than June 2006, mainly explained by higher accounts receivable (Ch$15,128 million), inventories (Ch$19,889 million, as a result of the incorporation of new companies which added Ch$14,779 million to inventories and the higher price of raw materials), and to a lesser extent, an increase in cash (Ch$8,097 million, mainly due to a higher initial cash balance and to lower needs in financing variations of working capital, as was required in 2Q06 when the price of copper suffered an abrupt change).

Fixed Assets

Amounted to Ch$167,550 million, a net increase of Ch$14,930 million over 2Q06, mainly due to the effect of the acquisition of machinery and equipment of Ch$23,957 million, an increase of Ch$8,906 in buildings and infrastructure, offset by depreciation for the period of Ch$28,996 million. The variations are mainly explained by new acquisitions, which added Ch$18,824 million to fixed assets.

Other Assets

Amounted to Ch$34,167 million, a 22.4% decrease (or -Ch$9,853 million) compared to 2Q06, mainly due to the consolidation of equity companies investments accounts of Peruplast and Tech Pak.

Liabilities Total liabilities as of June 30, 2007 amounted to Ch$195,711 million an increase of 11.8% compared to June 2006.

Bank Debt

Amounted to Ch$95,906 million at June 2007, representing an increase of 5.8% (Ch$5,232 million) compared to the previous year. This reflects mainly Alusa’s greater needs to finance the new acquisitions at the beginning of the year.

On June 5, 2006, Madeco signed a US$50 million 5-year club deal. In December 2006, the first installment of this loan (US$4 million) was repaid and 2 installments totaling US$8 million prepaid. On June 30th, 4 installments amounting to US$16 million (corresponding to the 100% of the short term component of the club deal) were paid.

Bonds

Bonds payable amounted to Ch$22,904 million as of June 2007 which correspond to the D Series whose last repayment is scheduled for December 2011. The bonds outstanding were reduced by 16.5% with respect to the prior year due to pay down in December 2006 and June 2007. These bonds are payable semi-annually (principal and interest) and bear interest of UF + 5% per annum.

Shareholders’ Equity As of June 30, 2007 shareholders’ equity was Ch$265,041 million, which represents a 6.7% increase over June 2006.

Paid Capital

Amounted to Ch$212,179 million at June 2007, which is lower than the Ch$266,226 million reported as of June 2006, due mainly to the absorption of accumulated losses, which represented a charge of Ch$51,353 million (this reduction was approved at the Extraordinary Shareholders’ Meeting held in April, 2007).

Share Premium

Amounted to Ch$40,851 million, varying slightly from the Ch$40,848 million reported in June 2006.

Other Reserves

Decreased by Ch$6,721 million from Ch$1,175 million in 2Q06, due to a lower valuation of foreign investments in accordance with the Chilean accounting norm N°64.

Accumulated Losses

Since April 24, 2007, the Company no longer has accumulated losses as was approved at the Extraordinary Shareholders’ Meeting. The previous balance was eliminated by a reduction in Paid Capital and 2006 net income.

For further information contact:

Pablo M. Araya

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, Colombia and Argentina. Madeco is considered, 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
(Second Quarter)
                     
                     
    Ch$ millions       US$ millions (1)    
    2Q06 2Q07   % Change   2Q06 2Q07   % Change
                     
Revenues   160,067 162,969   1.8%   297 309   4.2%
COGS   (130,699) (142,968)   9.4%   (242) (271)   12.0%
Gross Income   29,368 20,001   -31.9%   54 38   -30.3%
SG&A   (7,642) (8,249)   7.9%   (14) (16)   10.5%
Operating Income   21,726 11,752   -45.9%   40 22   -44.6%
                     
Financial income   663 698   5.3%   1 1   7.9%
Equity in earning (losses) of related companies 122 3   -97.7%   0 0   270.3%
Other non-operating income   80 (60)   -174.8%   0 (0)   -176.6%
Financial expenses   (3,355) (2,917)   -13.0%   (6) (6)   -11.0%
Positive goodwill amortization   (452) (426)   -5.8%   (1) (1)   -3.5%
Other non-operating expenses   (526) (390)   -25.8%   (1) (1)   -24.0%
Price-level restatement   (1,626) 118   -107.2%   (3) 0   -2612.9%
Non-Operating Results   (5,094) (2,975)   -41.6%   (9) (6)   53.4%
                     
Income (Loss) before income taxes   16,632 8,777   -47.2%   31 17   -46.0%
Income tax   (2,523) (1,564)   -38.0%   (5) (3)   -36.5%
Minority interest   (405) (924)   128.2%   (1) (2)   133.6%
Negative goodwill amortization   7 18   N/A   0 0   N/A
Net Income (Loss)   13,710 6,306   -54.0%   25 12   -52.9%
                     
Gross Margin   18.3% 12.3%   -   18.3% 12.3%   -
SG&A / Sales   4.8% 5.1%   -   4.8% 5.1%   -
Operating Margin   13.6% 7.2%   -   13.6% 7.2%   -
                     
1 Exchange rate on June 30 2007 US$1.00 = 526.86
Exchange rate on June 30 2006 US$1.00 = 539.44

Exhibit 2: Consolidated Income Statement
(Six Months Ended June-2007)
                     
    Ch$ millions       US$ millions (1)    
    YTD Jun 05 YTD Jun 06   % Change   YTD Jun 05 YTD Jun 06   % Change
                     
Revenues   283,642 317,766   12.0%   526 603   14.7%
COGS   (238,259) (279,268)   17.2%   (442) (530)   20.0%
Gross Income   45,383 38,498   -15.2%   84 73   -13.1%
SG&A   (13,727) (15,849)   15.5%   (25) (30)   18.2%
Operating Income   31,656 22,649   -28.5%   59 43   -26.7%
                     
Financial income   915 1,280   39.9%   2 2   43.2%
Equity in earning (losses) of related companies 286 7   N/A   1 0   N/A
Other non-operating income   434 591   36.1%   1 1   39.4%
Financial expenses   (5,785) (6,045)   4.5%   (11) (11)   7.0%
Positive goodwill amortization   (895) (870)   -2.8%   (2) (2)   -0.4%
Other non-operating expenses   (1,097) (990)   -9.8%   (2) (2)   -7.6%
Price-level restatement   122 874   618.6%   0 2   635.7%
Non-Operating Results   (6,021) (5,154)   -14.4%   (11) (10)   0.1%
                     
Income (Loss) before income taxes   25,635 17,495   -31.8%   48 33   -30.1%
Income tax   (4,385) (2,872)   -34.5%   (8) (5)   -32.9%
Minority interest   (819) (1,673)   104.4%   (2) (3)   109.3%
Negative goodwill amortization   14 26   N/A   0 0   N/A
Net Income (Loss)   20,445 12,975   -36.5%   38 25   -35.0%
                     
Gross Margin   16.0% 12.1%   -   16.0% 12.1%   -
SG&A / Sales   4.8% 5.0%   -   4.8% 5.0%   -
Operating Margin   11.2% 7.1%   -   11.2% 7.1%   -
                     
1 Exchange rate on June 30 2007 US$1.00 = 526.86
Exchange rate on June 30 2006 US$1.00 = 539.44

Exhibit 3: EBITDA by Business Unit
(Second Quarter)
                 
Second Quarter 2006                
Ch$ million   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   28,653 72,030 38,038 11,887 9,459   160,067
COGS   (24,217) (58,234) (30,740) (9,850) (7,658)   (130,699)
Gross Income   4,436 13,796 7,298 2,037 1,801   29,368
SG&A   (114) (4,492) (1,419) (763) (854)   (7,642)
Operating Income   4,322 9,304 5,879 1,274 947   21,726
EBITDA   4,358 11,258 6,495 1,914 1,215   25,240
                 
Gross Margin   15.5% 19.2% 19.2% 17.1% 19.0%   18.3%
SG&A / Sales   0.4% 6.2% 3.7% 6.4% 9.0%   4.8%
EBITDA Margin   15.2% 15.6% 17.1% 16.1% 12.8%   15.8%
                 
Segment Contribution                
% Revenues   17.9% 45.0% 23.8% 7.4% 5.9%   100.0%
% EBITDA   17.3% 44.6% 25.7% 7.6% 4.8%   100.0%
                 
Second Quarter 2007                
Ch$ million   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   18,688 82,646 29,168 22,947 9,520   162,969
COGS   (18,314) (70,180) (27,517) (19,469) (7,488)   (142,968)
Gross Income   374 12,466 1,651 3,478 2,032   20,001
SG&A   50 (4,849) (1,314) (1,114) (1,022)   (8,249)
Operating Income   424 7,617 337 2,364 1,010   11,752
EBITDA   463 9,396 936 3,337 1,301   15,433
                 
Gross Margin   2.0% 15.1% 5.7% 15.2% 21.3%   12.3%
SG&A / Sales   -0.3% 5.9% 4.5% 4.9% 10.7%   5.1%
EBITDA Margin   2.5% 11.4% 3.2% 14.5% 13.7%   9.5%
                 
Segment Contribution                
% Revenues   11.5% 50.7% 17.9% 14.1% 5.8%   100.0%
% EBITDA   3.0% 60.9% 6.1% 21.6% 8.4%   100.0%
                 
2007 versus 2006                
% change   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   -34.8% 14.7% -23.3% 93.0% 0.6%   1.8%
COGS   -24.4% 20.5% -10.5% 97.7% -2.2%   9.4%
Gross Income   -91.6% -9.6% -77.4% 70.7% 12.8%   -31.9%
SG&A   -143.9% 7.9% -7.4% 46.0% 19.7%   7.9%
Operating Income   -90.2% -18.1% -94.3% 85.6% 6.7%   -45.9%
EBITDA   -89.4% -16.5% -85.6% 74.3% 7.1%   -38.9%

Exhibit 4: EBITDA by Business Unit
(Six Months Ended June-2007)
                 
YTD Jun 06                
Ch$ million   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   46,360 134,177 62,110 23,417 17,578   283,642
COGS   (40,879) (111,406) (52,394) (19,435) (14,145)   (238,259)
Gross Income   5,481 22,771 9,716 3,982 3,433   45,383
SG&A   (187) (7,877) (2,634) (1,396) (1,633)   (13,727)
Operating Income   5,294 14,894 7,082 2,586 1,800   31,656
EBITDA   5,367 18,682 8,345 3,855 2,327   38,576
                 
Gross Margin   11.8% 17.0% 15.6% 17.0% 19.5%   16.0%
SG&A / Sales   0.4% 5.9% 4.2% 6.0% 9.3%   4.8%
EBITDA Margin   11.6% 13.9% 13.4% 16.5% 13.2%   13.6%
                 
Segment Contribution                
% Revenues   16.3% 47.3% 21.9% 8.3% 6.2%   100.0%
% EBITDA   13.9% 48.4% 21.6% 10.0% 6.0%   100.0%
                 
YTD Jun 07                
Ch$ million   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   37,011 169,349 49,180 44,023 18,203   317,766
COGS   (36,285) (143,144) (47,803) (37,594) (14,442)   (279,268)
Gross Income   726 26,205 1,377 6,429 3,761   38,498
SG&A   0 (8,882) (2,489) (2,537) (1,941)   (15,849)
Operating Income   726 17,323 (1,112) 3,892 1,820   22,649
EBITDA   799 21,008 113 6,136 2,392   30,448
                 
Gross Margin   2.0% 15.5% 2.8% 14.6% 20.7%   12.1%
SG&A / Sales   0.0% 5.2% 5.1% 5.8% 10.7%   5.0%
EBITDA Margin   2.2% 12.4% 0.2% 13.9% 13.1%   9.6%
                 
Segment Contribution                
% Revenues   11.6% 53.3% 15.5% 13.9% 5.7%   100.0%
% EBITDA   2.6% 69.0% 0.4% 20.2% 7.9%   100.0%
                 
2006 versus 2007                
% change   COPPER ROD WIRE & CABLE BRASS MILLS F. PACKAGING PROFILES   Total
                 
Revenues   -20.2% 26.2% -20.8% 88.0% 3.6%   12.0%
COGS   -11.2% 28.5% -8.8% 93.4% 2.1%   17.2%
Gross Income   -86.8% 15.1% -85.8% 61.5% 9.6%   -15.2%
SG&A   -100.0% 12.8% -5.5% 81.7% 18.9%   15.5%
Operating Income   -86.3% 16.3% -115.7% 50.5% 1.1%   -28.5%
EBITDA   -85.1% 12.5% -98.6% 59.2% 2.8%   -21.1%

Exhibit 5: EBITDA by Business Unit and Country
(Second Quarter)
                                 
  Second Quarter 2006   Second Quarter 2007
(Ch$ million)   (Ch$ million)
  Chile Peru       Interco. COPPER ROD   Chile Peru         Interco. COPPER ROD
                                 
Tons (Third parties) 2,810 4,130       0 6,940   2,281 2338         0 4,619
Tons (Intercompany) 3,203 0       (3,203) 0   3,404 0         (3,404) 0
Tons (Total) 6,013 4,130       (3,203) 6,940   5,685 2,338         (3,404) 4,619
                                 
Revenues (Third parties) 11,429 17,224       0 28,653   9,367 9,321         0 18688
Revenues (Intercompany) 13,738 0       (13,738) 0   13,912 0         (13,912) 0
Total revenues 25,167 17,224       (13,738) 28,653   23,279 9,321         (13,912) 18688
COGS (22,061) (15,015)       12,859 (24,217)   (23,657) (8,906)         14,249 -18314
Gross Income 3,106 2,209       (879) 4,436   (378) 415         337 374
SG&A 0 (114)       0 (114)   0 50         0 50
Operating Income 3,106 2,095       (879) 4,322   (378) 465         337 424
EBITDA 3,141 2,094       (877) 4,358   (341) 464         340 463
                                 
Gross Margin 27.2% 12.8%         15.5%   -4.0% 4.5%           2.0%
EBITDA Margin 27.5% 12.2%         15.2%   -3.6% 5.0%           2.5%
                                 
  Chile Brazil Optical F. Argentina Peru Interco. WIRE & CABLE   Chile Brazil Optical F. Argentina Peru Colombia Interco. WIRE & CABLE
                                 
Tons (Third parties) 1,910 8,633 0 1,031 2,884 0 14,458   2,072 8,134 0 2,026 3,286 1,177 0 16,695
Tons (Intercompany) 11 92 0 44 147 (294) 0   70 471 0 473 296 0 (1,310) 0
Tons (Total) 1,921 8,725 0 1,075 3,031 (294) 14,458   2,142 8,605 0 2,499 3,582 1,177 (1,310) 16,695
Kms. 0 0 916 0 0 0 916   0 0 707 0 0 0 0 707
                                 
Revenues (Third parties) 11,079 40,500 316 3,493 16,642 0 72,030   12,684 38,368 568 5,128 19,210 6,688 0 82,646
Revenues (Intercompany) 542 472 0 84 616 (1,714) 0   674 1,475 16 1,053 1,261 0 (4,479) 0
Total revenues 11,621 40,972 316 3,577 17,258 (1,714) 72,030   13,358 39,843 584 6,181 20,471 6,688 (4,479) 82,646
COGS (9,470) (33,600) (335) (2,885) (14,081) 2,137 (58,234)   (11,335) (34,799) (739) (5,240) (17,117) (5,319) 4,369 (70,180)
Gross Income 2,151 7,372 (19) 692 3,177 423 13,796   2,023 5,044 (155) 941 3,354 1,369 (110) 12,466
SG&A (592) (2,722) (44) (174) (643) (317) (4,492)   (611) (2,502) (64) (258) (774) (314) (326) (4,849)
Operating Income 1,559 4,650 (63) 518 2,534 106 9,304   1,412 2,542 (219) 683 2,580 1,055 (436) 7,617
EBITDA 1,903 5,951 (14) 562 2,759 97 11,258   1,757 3,615 (305) 754 2,796 1,115 (336) 9,396
                                 
Gross Margin 19.4% 18.2%   19.8% 19.1%   19.2%   15.9% 13.1% -27.3% 18.4% 17.5%     15.1%
EBITDA Margin 17.2% 14.7%   16.1% 16.6%   15.6%   13.9% 9.4% -53.7% 14.7% 14.6%     11.4%
                                 
  Chile Coin Argentina     Interco. BRASS MILLS   Chile Coin Argentina       Interco. BRASS MILLS
Tons (Third parties) 7,219 594 384     0 8,197   5,447 469 276       0 6,192
Tons (Intercompany) 529 0 0     (529) 0   221 0 0       (221) 0
Tons (Total) 7,748 594 384     (529) 8,197   5,668 469 276       (221) 6,192
                                 
Revenues (Third parties) 32,536 2,826 2,676     0 38,038   25,030 2,214 1,924       0 29,168
Revenues (Intercompany) 3,717 (7) 828     (4,538) 0   3,505 (1) 163       (3,667) 0
Total revenues 36,253 2,819 3,504     (4,538) 38,038   28,535 2,213 2,087       (3,667) 29,168
COGS (30,216) (2,242) (2,925)     4,643 (30,740)   (26,458) (2,002) (2,727)       3,670 (27,517)
Gross Income 6,037 577 579     105 7,298   2,077 211 (640)       3 1,651
SG&A (962) (200) (170)     (87) (1,419)   (917) (186) (110)       (101) (1,314)
Operating Income 5,075 377 409     18 5,879   1,160 25 (750)       (98) 337
EBITDA 5,573 446 481     (5) 6,495   1,621 100 (675)       (110) 936
                                 
Gross Margin 18.6% 20.4% 21.6%       19.2%   8.3% 9.5% -33.3%         5.7%
EBITDA Margin 17.1% 15.8% 18.0%       17.1%   6.5% 4.5% -35.1%         3.2%
                                 
  Chile Argentina       Interco. F. PACKAGING   Chile Argentina Peru       Interco. F. PACKAGING
Tons (Third parties) 2,667 1,256       (16) 3,907   2,837 1,333 7,784       (1,907) 10,047
Tons (Intercompany) 0 0       0 0   0 0 0       0 0
Tons (Total) 2,667 1,256       (16) 3,907   2,837 1,333 7,784       (1,907) 10,047
                                 
Revenues (Third parties) 8,273 3,693       (79) 11,887   8,533 3,455 11,975       (1,016) 22,947
Revenues (Intercompany) 0 0       0 0   0 0 0       0 0
Total revenues 8,273 3,693       (79) 11,887   8,533 3,455 11,975       (1,016) 22,947
COGS (6,694) (3,234)       78 (9,850)   (7,054) (3,174) (10,116)       875 (19,469)
Gross Income 1,579 459       (1) 2,037   1,479 281 1,859       (141) 3,478
SG&A (531) (182)       (50) (763)   (470) (180) (409)       (55) (1,114)
Operating Income 1,048 277       (51) 1,274   1,009 101 1,450       (196) 2,364
EBITDA 1,476 488       (50) 1,914   1,449 312 1,783       (207) 3,337
                                 
Gross Margin 19.1% 12.4%         17.1%   17.3% 8.1% 15.5%         15.2%
EBITDA Margin 17.8% 13.2%         16.1%   17.0% 9.0% 14.9%         14.5%
                                 
  Chile           PROFILES   Chile             PROFILES
Tons (Third parties) 3,618           3,618   2,799             2,799
Tons (Intercompany) 0           0   0             0
Tons (Total) 3,618           3,618   2,799             2,799
                                 
Revenues (Third parties) 9,459           9,459   9,520             9,520
Revenues (Intercompany) 0           0   0             0
Total revenues 9,459           9,459   9,520             9,520
COGS (7,658)           (7,658)   (7,488)             (7,488)
Gross Income 1,801           1,801   2,032             2,032
SG&A (854)           (854)   (1,022)             (1,022)
Operating Income 947           947   1,010             1,010
EBITDA 1,215           1,215   1,301             1,301
                                 
Gross Margin 19.0%           19.0%   21.3%             21.3%
EBITDA Margin 12.8%           12.8%   13.7%             13.7%

Exhibit 6: EBITDA by Business Unit and Country
(Six Months Ended June-2007)
                                 
                                 
                                 
  YTD Jun 06   YTD Jun 07
        (Ch$ million)             (Ch$ million)      
  Chile Peru       Interco. COPPER ROD   Chile Peru         Interco. COPPER ROD
                                 
Tons (Third parties) 5,604 7,575       0 13,179   4,977 4,951         0 9,928
Tons (Intercompany) 6,051 0       (6,051) 0   5,127 0         (5,127) 0
Tons (Total) 11,655 7,575       (6,051) 13,179   10,104 4,951         (5,127) 9,928
                                 
Revenues (Third parties) 19,366 26,994       0 46,360   18,587 18,424         0 37,011
Revenues (Intercompany) 21,890 0       (21,890) 0   19,850 0         (19,850) 0
Total revenues 41,256 26,994       (21,890) 46,360   38,437 18,424         (19,850) 37,011
COGS (37,382) (24,265)       20,768 (40,879)   (38,578) (18,017)         20,310 (36,285)
Gross Income 3,874 2,729       (1,122) 5,481   (141) 407         460 726
SG&A 0 (187)       0 (187)   0 0         0 0
Operating Income 3,874 2,542       (1,122) 5,294   (141) 407         460 726
EBITDA 3,945 2,542       (1,120) 5,367   (68) 406         461 799
                                 
Gross Margin 20.0% 10.1%         11.8%   -0.8% 2.2%           2.0%
EBITDA Margin 20.4% 9.4%         11.6%   -0.4% 2.2%           2.2%
                                 
  Chile Brazil Optical F. Argentina Peru Interco. WIRE & CABLE   Chile Brazil Optical F. Argentina Peru Colombia Interco. WIRE & CABLE
                                 
Tons (Third parties) 4,919 16,509 0 2,025 6,418 0 29,871   4,437 16,970 0 4,183 7,149 2,030 0 34,769
Tons (Intercompany) 149 401 0 108 147 (805) 0   102 660 0 726 298 0 (1,786) 0
Tons (Total) 5,068 16,910 0 2,133 6,565 (805) 29,871   4,539 17,630 0 4,909 7,447 2,030 (1,786) 34,769
Kms. 0 0 916 0 0 0 916   0 0 1,528 0 0 0 0 1,528
                                 
Revenues (Third parties) 23,705 71,399 775 6,172 32,126 0 134,177   25,311 79,641 1,168 11,204 40,937 11,088 0 169,349
Revenues (Intercompany) 1,287 1,475 0 189 616 (3,567) 0   1,044 2,124 16 1,681 1,263 0 (6,128) 0
Total revenues 24,992 72,874 775 6,361 32,742 (3,567) 134,177   26,355 81,765 1,184 12,885 42,200 11,088 (6,128) 169,349
COGS (21,540) (60,292) (735) (5,199) (26,893) 3,253 (111,406)   (22,495) (70,060) (1,309) (11,014) (35,255) (9,041) 6,030 (143,144)
Gross Income 3,452 12,582 40 1,162 5,849 (314) 22,771   3,860 11,705 (125) 1,871 6,945 2,047 (98) 26,205
SG&A (1,127) (4,562) (43) (318) (1,254) (573) (7,877)   (1,132) (4,573) (144) (523) (1,343) (539) (628) (8,882)
Operating Income 2,325 8,020 (3) 844 4,595 (887) 14,894   2,728 7,132 (269) 1,348 5,602 1,508 (726) 17,323
EBITDA 3,022 10,539 93 904 5,043 (919) 18,682   3,435 9,350 (308) 1,497 6,048 1,626 (640) 21,008
                                 
Gross Margin 14.6% 17.6% 5.2% 18.8% 18.2%   17.0%   15.3% 14.7% -10.7% 16.7% 17.0% 18.5%   15.5%
EBITDA Margin 12.7% 14.8% 12.0% 14.6% 15.7%   13.9%   13.6% 11.7% -26.4% 13.4% 14.8% 14.7%   12.4%
                                 
  Chile Coin Argentina     Interco. BRASS MILLS   Chile Coin Argentina       Interco. BRASS MILLS
Tons (Third parties) 13,366 1,291 779     0 15,436   9,631 1,069 313       0 11,013
Tons (Intercompany) 1,055 0 0     (1,055) 0   501 9 0       (510) 0
Tons (Total) 14,421 1,291 779     (1,055) 15,436   10,132 1,078 313       (510) 11,013
                                 
Revenues (Third parties) 52,780 5,155 4,175     0 62,110   41,147 4,868 3,165       0 49,180
Revenues (Intercompany) 6,829 (7) 1,650     (8,472) 0   5,557 40 237       (5,834) 0
Total revenues 59,609 5,148 5,825     (8,472) 62,110   46,704 4,908 3,402       (5,834) 49,180
COGS (51,635) (4,077) (5,070)     8,388 (52,394)   (45,419) (4,548) (3,687)       5,851 (47,803)
Gross Income 7,974 1,071 755     (84) 9,716   1,285 360 (285)       17 1,377
SG&A (1,843) (368) (267)     (156) (2,634)   (1,723) (377) (197)       (192) (2,489)
Operating Income 6,131 703 488     (240) 7,082   (438) (17) (482)       (175) (1,112)
EBITDA 7,170 833 630     (288) 8,345   496 158 (342)       (199) 113
                                 
Gross Margin 15.1% 20.8% 18.1%       15.6%   3.1% 7.4% -9.0%         2.8%
EBITDA Margin 13.6% 16.2% 15.1%       13.4%   1.2% 3.2% -10.8%         0.2%
                                 
  Chile Argentina       Interco. F. PACKAGING   Chile Argentina Peru       Interco. F. PACKAGING
Tons (Third parties) 5,231 2,605       (100) 7,736   5,464 2,600 12,841       (2,016) 18,889
Tons (Intercompany) 0 0       0 0   0 0 0       0 0
Tons (Total) 5,231 2,605       (100) 7,736   5,464 2,600 12,841       (2,016) 18,889
                                 
Revenues (Third parties) 16,228 7,385       (196) 23,417   16,594 7,129 22,780       (2,480) 44,023
Revenues (Intercompany) 0 0       0 0   0 0 0       0 0
Total revenues 16,228 7,385       (196) 23,417   16,594 7,129 22,780       (2,480) 44,023
COGS (13,139) (6,492)       196 (19,435)   (13,700) (6,593) (19,506)       2,205 (37,594)
Gross Income 3,089 893       0 3,982   2,894 536 3,274       (275) 6,429
SG&A (1,012) (292)       (92) (1,396)   (940) (368) (1,129)       (100) (2,537)
Operating Income 2,077 601       (92) 2,586   1,954 168 2,145       (375) 3,892
EBITDA 2932 1015       (92) 3855   2818 608 3084       (374) 6136
                                 
Gross Margin 19.0% 12.1%         17.0%   17.4% 7.5% 14.4%         14.6%
EBITDA Margin 18.1% 13.7%         16.5%   17.0% 8.5% 13.5%         13.9%
                                 
  Chile           PROFILES   Chile             PROFILES
Tons (Third parties) 6,731           6,731   5,698             5,698
Tons (Intercompany) 0           0   0             0
Tons (Total) 6,731           6,731   5,698             5,698
                                 
Revenues (Third parties) 17,578           17,578   18,203             18,203
Revenues (Intercompany) 0           0   0             0
Total revenues 17,578           17,578   18,203             18,203
COGS (14,145)           (14,145)   (14,442)             (14,442)
Gross Income 3,433           3,433   3,761             3,761
SG&A (1,633)           (1,633)   (1,941)             (1,941)
Operating Income 1,800           1,800   1,820             1,820
EBITDA 2,327           2,327   2,392             2,392
                                 
Gross Margin 19.5%           19.5%   20.7%             20.7%
EBITDA Margin 13.2%           13.2%   13.1%             13.1%

Exhibit 7: Consolidated Balance Sheet
             
    Ch$ millions   US$ millions (1)
    YTD Jun 06 YTD Jun 07   YTD Jun 06 YTD Jun 07
             
Cash   5,621 13,718   10 26
Time deposits and marketable securities   1,526 1,043   3 2
Accounts receivable   102,558 117,686   190 223
Accounts receivable from related companies   667 1,101   1 2
Inventories   106,371 126,260   197 240
Recoverable taxes   14,672 13,527   27 26
Prepaid expenses and other current assets   6,686 11,413   12 22
Current Assets   238,101 284,748   441 540
             
Property, plant and equipment (net)   152,620 167,550   283 318
             
Investments   12,359 6,321   23 12
Goodwill (net)   18,565 16,654   34 32
Long-term receivables   587 393   1 1
Other   12,509 10,799   23 20
Other Assets   44,021 34,167   82 65
             
ASSETS   434,742 486,466   806 923
             
             
Short-term bank borrowings   32,128 51,482   60 98
Current portion of long-term bank and other debt   12,579 17,235   23 33
Current portion of bonds payable   4,518 4,714   8 9
Current portion of long-term liabilities   494 2,259   1 4
Dividends payable   72 83   0 0
Accounts payable   27,090 39,498   50 75
Notes payable   1,172 1,071   2 2
Other payables   567 955   1 2
Notes and accounts payable to related companies   386 655   1 1
Accrued expenses   8,034 8,309   15 16
Withholdings payable   1,217 1,626   2 3
Deferred income   3,754 3,010   7 6
Income taxes   0 0   0 0
Other current liabilities   2,117 2,080   4 4
Current Liabilities   94,129 132,976   174 252
    0 0   0 0
Long-term bank and other debt   52,970 38,798   98 74
Bonds payable   22,907 18,189   42 35
Accrued expenses   5,091 5,748   9 11
Long-Term Liabilities   80,968 62,735   150 119
             
Minority Interest   11,209 25,714   21 49
             
             
Common stock   269,068 216,761   499 411
Share premium   40,848 40,851   76 78
Reserves   1,175 (5,546)   2 (11)
Retained earnings   (62,655) 12,975   (116) 25
Total Shareholders' Equity   248,436 265,041   461 503
             
LIABILITIES AND SHAREHOLDERS' EQUITY   434,742 486,466   806 923
             
1 Exchange rate on June 30 2007 US$1.00 = 526.86
Exchange rate on June 30 2006 US$1.00 = 539.44

Exhibit 8: Consolidated Statement of Cash Flow
             
             
             
    Ch$ millions   US$ millions (1)
    YTD Jun 06 YTD Jun 07   YTD Jun 06 YTD Jun 07
             
Cash received from customers   304,069 357,920   564 679
Financial income received   606 1,745   1 3
Dividends and other distributions   59 -   0 -
Other incomes   3,703 1,948   7 4
Payments to suppliers and employees   (329,186) (353,926)   (610) (672)
Interests paid   (5,486) (5,001)   (10) (9)
Income taxes paid   (2,459) (3,442)   (5) (7)
Other expenses   (294) (3,215)   (1) (6)
Added Value Tax and others   (2,570) 1,217   (5) 2
Cash Flow from Operating Activities   (31,557) (2,754)   (59) (5)
             
             
Sale of Property, Plant and Equipment   2,502 437   5 1
Sale of permanent investments   - 0   - 0
Sale of other investments   - -   - -
Other proceeds from investments   125 3,895   0 7
Acquisition of fixed assets   (5,618) (11,014)   (10) (21)
Permanent investments   (4) (6,801)   (0) (13)
Other disbursements   - (13)   - (0)
Cash Flow used in Investing Activities   (2,995) (13,497)   (6) (26)
             
             
Issuance of shares   9,641 316   18 1
Loans obtained   97,178 87,227   180 166
Registered loans from related companies   - -   - -
Other financing sources   - -   - -
Dividends paid   (431) (669)   (1) (1)
Capital distributions   - (2,664)   - (5)
Repayments of bank borrowings   (69,466) (68,810)   (129) (131)
Repayments of bonds   (2,139) (2,234)   (4) (4)
Payment of expenses related to shares issuance   - -   - -
Payment loans documented from related companies   (1,583) -   (3) -
Others   - -   - -
Cash Flow provided by Financing Activities   33,201 13,167   62 25
             
             
Net Cash Flow for the Period   (1,352) (3,084)   (3) (6)
             
             
Effect of price-level restatements on cash and cash equivalents 717 (33)   1 (0)
             
Net increase in cash and cash equivalents   (635) (3,117)   (1) (6)
             
Cash and cash equivalents at the beginning of year   8,105 17,879   15 34
             
Cash and cash equivalents at end of the period   7,470 14,762   14 28
             
_____________________            
1 Exchange rate on June 30 2007 US$1.00 = 526.86
Exchange rate on June 30 2006 US$1.00 = 539.44