Altos Hornos de Mexico, S.A. de C.V. Reports Consolidated Unaudited 1998 Year-End Results.

MONCLOVA, Coahuila--(BUSINESS WIRE)--March 1, 1999--Altos Hornos de Mexico, S.A. de C.V. ("AHMSA" or the "Company") (NYSE: IAM), today announced its 1998 year-end results ended December 31, 1998. All figures herein are unaudited and based on general accepted principals in Mexico (Mexican GAAP) and have been restated in constant pesos as of December 31, 1998.

In 1998, the Company obtained an operating income of Ps. 2,005 million, reflecting an operating margin of 14.9%.

AHMSA also reported an EBITDA of Ps. 3,056 million, despite a net loss of Ps. 1,746 million, which was influenced by a greater fluctuation in the exchange rates.

In 1998, the international steel industry confronted one of its most difficult years due to the financial crisis in Asian and Eastern Europe. This resulted in an average drop of steel prices of US $100 per tonne. Nonetheless, the Company achieved its production goals and fully operated its production lines to reach a record level of 3.68 million tonnes of liquid steel.

In the second half of 1998, AHMSA implemented a strict cost-reduction program as part of its AHMSA XXI strategy, enabling the Company to remain as one of the lowest cost producers of the world. At the same time, it was also able to increase its production by 4.91% and heightened its participation in higher value-added markets by 24% due to a greater volume of special application steels. It also maintained a satisfactory balance between its domestic and export sales. Together, these measures helped to offset AHMSA's 6% decrease in net sales despite a 27% fall in international steel prices.

As part of the AHMSA XXI program, the Company decreased its personnel by 12.4%, redefined its investments to focus on priority projects and increased its presence in the domestic market. At the same time, the Company also initiated a process to divest non-core assets in order to meet its short-term debt obligations.

In January 1999, the Company concluded the sale of its galvanizing and painting lines and sold its subsidiary Aceros Nacionales in February 1999. The Company is also continuing with its bidding processes for the sale of its oxygen plants, power plants and coke ovens.

The sale of these assets configure into the Company's redirection towards new higher-value added segments, principally in the production of specialized steels derived from plate, hot and cold-rolled steel, as well as tinplate, of which AHMSA is the only producer in Mexico.

The following table illustrates unaudited 1998 figures as compared to the same period last year.

Concept          Unit              1997         1998        Variation

Liquid Steel     Millions          3.504        3.677       +4.91
                 of tonnes

Finished Product Millions          2.905        3.015       +3.79
                 of tonnes

Net Sales        Millions          14,381       13,502      -6.11
                 of Pesos

Domestic Sales   Thousands         1,603,782    1,851,462   +15.4
Volume           of tonnes

Exports          Thousands         586,111      411,693     -29.8
                 of tonnes

Coexports (1)    Thousands         696,127      630,120     -9.5
                 of tonnes

Operating Margin       %           15.4         14.9        -0.5

Net Income       Millions          1,430        (1,746)     NA
                 of Pesos

EBITDA           Millions          3,247        3,056       -5.88
                 of Pesos

(1)  Sales to Mexican steel transformers who subsequently export their
     product.

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In the domestic market, steel prices are expected to increase 10% in March 1999. This, along with savings of US $80 million in 1999 that is contemplated in the AHMSA XXI plan should permit the Company to experience substantial margin recovery.

Located in Monclova, in the state of Coahuila, AHMSA is the largest integrated steel producer in Mexico. The Company is Mexico's leader in the production of flat products and also manufactures higher value-added coated products. AHMSA owns and operates iron and metallurgical coal mines that produce raw materials used in the Company's steelmaking process. AHMSA produces more than 3.7 million metric tons of liquid steel annually. Through its subsidiary MICARE, the Company is also engaged in the production and sale of steam coal for power generation.

Visit AHMSA's website at www.ahmsa.com.