Grupo Mexico 2nd Quarter 2001 Results.Business Editors MEXICO Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. CITY--(BUSINESS WIRE)--July 30, 2001 Grupo Mexico
Highlights (Expressed in Thousands of US Dollars - US GAAP)
FINANCIAL Three Months Ended: Six Months Ended:
US GAAP June 30 June 30 Var. June 30 June 30 Var.
2001 2000 % 2001 2000 %
Net Sales 771,995 856,432 (9.9) 1,545,210 1,680,802 (8.1)
Operating
Profit 99,037 92,011 7.6 135,620 139,597 (2.8)
Operating Cash
Flow EBITDA 170,127 156,757 8.5 279,013 272,133 2.5
Net Profit
(Majority) 6,100 45,042 (86.5) (42,706) 6,011 (810)
Earnings per
Share
(Majority) 0.01 0.07 (85.7) (0.07) 0.01 (800)
Grupo Mexico (G.Mexico) consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the second quarter and for the six months ended June June: see month. 30th 2001 include those of Americas A·mer·i·cas , the See America. Mining Corporation (AMC (Advanced Mezzanine Card) See AdvancedTCA. ) and Grupo Ferroviario Mexicano Noun 1. Mexicano - a Mexican (or person of Mexican descent) living in the United States Mexican-American Mexico, United Mexican States - a republic in southern North America; became independent from Spain in 1810 (GFM GFM Government-Furnished Material GfM Gesellschaft Für Musikforschung GFM Global Freight Management GFM Gruyere Fribourg Morat (Swiss / Fribourg Railways-Bus Organisation) GFM Global Force Management GFM Gram Formula Mass ) that consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. the results of Minera Minera (Welsh: Mwynglawdd) is a small village in the county borough of Wrexham in north-east Wales. It borders Coedpoeth to the east and Bwlchgwyn to the west. Mexico (MM), ASARCO ASARCO American Smelting and Refining Company , Southern Peru Copper Corporation (SPCC SPCC abbr. Society for the Prevention of Cruelty to Children SPCC (US) n abbr (= Society for the Prevention of Cruelty to Children) → Kinderschutzbund m ) and Ferromex Ferromex, a contraction of Ferrocarril Mexicano or "Mexican Railroad", is a private rail consortium that operates the largest (by mileage) railroad in Mexico. . In addition, because of the nature of our mining business, whose sales are 100% denominated in US dollars, we presented figures in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. under the heading "Applies to US GAAP" and subsequently in accordance with Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum GAAP under the heading "Applies to Mexican GAAP". Applies to US GAAP: G.Mexico consolidated results for the second quarter and for the first six months of 2001 standout for the higher efficiencies that allowed us to realize significant operating and administrative cost administrative cost Managed care A cost incurred by the 'business' end of a health care facility or university–eg, staffing and personnel costs, nursing home and hospital administration, insurance, and overhead expenses. Cf Indirect costs. savings at all of our mining and railroad railroad or railway, form of transportation most commonly consisting of steel rails, called tracks, on which freight cars, passenger cars, and other rolling stock are drawn by one locomotive or more. subsidiaries, complemented by receding energy costs, personnel reductions and the closure of some operations. The combined effect of these factors propelled cost savings to $97.8 million dollars in the second quarter which represent a 14.0% reduction in total costs when compared to the second quarter last year in terms of Generally Accepted Accounting Principles in the United States. For the first half of 2001, costs savings ascended to $142.5 million dollars and represent a 10.1% reduction over last year. It is important to highlight that these cost savings, together with the excellent results achieved at our railroad operations, entirely mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the effect of lower prices of the metals that we produce and sell. G.Mexico consolidated sales for the second quarter of 2001 amounted to $772.0 million dollars and represented a 9.9% decline when compared to those reported last year and, for the first six months ended June 30th, total sales amounted to $1,545.2 million dollars which represented an 8.1% decline. The decrease can be mainly attributed to the lower metal market prices which: in terms of zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. , decreased by 14%, by 12% in terms of silver, by 7% for gold and, an 11.5% decrease for molybdenum molybdenum (məlĭb`dənəm) [Gr.,=leadlike], metallic chemical element; symbol Mo; at. no. 42; at. wt. 95.94; m.p. about 2,617°C;; b.p. about 4,612°C;; sp. gr. 10.22 at 20°C;; valence +2, +3, +4, +5, or +6. , when compared to the same period last year. With respect to copper, our principal metal, prices decreased by 3.3% due to the slow down in the US economy during the period. However, during the second quarter, copper sales volume increased by 4.7% which, together with the cost savings mentioned above, helped mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the
effect of the lower copper price.Zinc mine production and sales volume at both Minera Mexico and Asarco were lower due to the closure of two high cost underground facilities in the case of Mexico - Velardena and Rosario Rosario (rôsär`yō), city (1991 pop. 1,095,906), Santa Fe prov., E central Argentina, a port on the Paraná River, on the eastern margin of the Pampa. - and the closure of a low grade shoot in our underground mines located in the state of Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , United States. Lead and silver sales also registered a decrease in volume sold due to the East Helena, Montana East Helena is a city in Lewis and Clark County, Montana, about five miles east of Helena, Montana. The population was 1,642 at the 2000 census. Geography East Helena is located at (46.589856, -111. , lead smelter temporary shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down . The smelter will remain closed until lead concentrate market conditions improve. In addition, gold and silver sales decreased significantly during the period in question due to a decrease in the purchases from third parities as well as an increase in inventories of refined gold and silver.
CONSOLIDATED METAL'S VOLUME SOLD
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 289,873 276,776 4.7 554,136 552,894 0.2
Zinc (MT) 45,896 50,761 (9.6) 94,172 100,041 (5.9)
Silver (Kg) 376,843 511,954 (26.4) 710,319 949,197 (25.2)
Gold (Kg) 2,234 3,155 (29.2) 4,786 6,716 (28.7)
Molybdenum (MT) 3,023 3,932 (23.1) 6,829 7,396 (7.7)
Lead (MT) 17,739 22,452 (21.0) 33,751 45,620 (26.0)
As is demonstrated bellow bellow one of the voices of cattle. Usually refers to the arrogant call of the bull used to announce territorial rights. Abnormalities of the voice include hoarseness as in rabies, or continuous repetition as in nervous acetonemia. See also low, moo. , consolidated sales suffered considerably from the lower market prices of our principal metals with the only exception of lead. The mining division (AMC) accounted for 84.0% of sales and was denominated in dollars and the remaining 16.0% corresponded to the railroad division and was denominated in pesos.
METAL'S MARKET PRICES
Three Months Ended: Six Months Ended:
June 30th June 30th Var. June 30th June 30 Var.
2001 2000 % 2001 2000 %
Copper US Cts./Lb. 75.2 80.3 (6.4) 78.6 81.3 (3.3)
Zinc US Cts./Lb. 42.4 51.4 (17.5) 44.3 51.4 (13.8)
Silver Dllrs./Oz 4.4 5.0 (12.0) 4.5 5.1 (11.8)
Gold Dllrs./Oz 267.7 280.2 (4.5) 265.6 285.2 (6.9)
Molybdenum US Dllrs./Lb 2.4 2.7 (11.1) 2.3 2.6 (11.5)
Lead US Cts./Lb 21.0 18.9 11.1 21.7 19.8 9.6
Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the three months ended June 30th of 2001 amounted to $99.0 million dollars and compares to $92.0 million dollars generated during the same period last year. The increase can be mainly attributed to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. measures and cost savings. In addition, for the six months ended June 30th of 2001, operating profit ascended to $135.6 million dollars and compares to 139.6 million generated last year, a small decrease once the low metal prices are taken into account. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the second quarter of 2001 amounted to $170.1 million dollars or 22.0% of sales and represented a 8.5% increase when compared to last year<180>s figure, thus reflecting the significant cost savings. For the six months ended June 30th of 2001, consolidated EBITDA amounted to $279.0 million dollars and compares with $272.1 million generated during the first six months of 2000. OTHER RELEVANT INFORMATION Investments Total capital investment for the second quarter of 2001 ascended to $143.4 million dollars and for the six months ended on June 30th of the present year, said investments amounted to $229.0 million dollars. These capital expenditures were funded primarily through the company's own cash flow and that of third parties. With respect to capital investments, we are about to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. operations at Cananea Cananea (from the Apache term for "horse meat") is a city in the northern Mexican state of Sonora. It is the seat of the municipality of the same name. The population of the town was 30,515 as recorded by the 2000 census. , during the next few weeks of 2001, of the new electrolytic e·lec·tro·lyt·ic adj. 1. Of or relating to electrolysis. 2. Produced by electrolysis. 3. Of or relating to electrolytes. e·lec plant with an annual capacity of 22,000 metric tones of copper cathodes and a total investment of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $50 million dollars.
Highlights (Expressed in Thousands of Mexican Pesos - Mexican GAAP)
FINANCIAL Three Months Ended on: Six Months Ended on:
MEXICAN GAAP June 30 June 30 Var. June 30 June 30 Var.
2001 2000 % 2001 2000 %
Net Sales 7,361,527 8,166,593 (9.9) 15,135,674 16,057,067 (5.7)
Operating
Profit(a) 667,551 601,796 10.9 963,037 1,106,015(12.9)
Operating
Cash Flow
(EBITDA) 1,580,082 1,462,854 8.0 2,838,405 2,848,094 (0.3)
Majority Net
Income(a) 796,735 (12,052) N.A. 560,892 1,041,113(46.1)
(a) For comparison purpose, these items do not include the
amortization of the excess book value over the cost of shares
generated by the Asarco acquisition.
Applies to Mexican GAAP: G.Mexico consolidated results for the second quarter and for the first six months of 2001 standout for the higher efficiencies that allowed us to realize significant operating and administrative cost savings at all of our mining and railroad subsidiaries, complemented by receding energy costs, personnel reductions and the closure of some operations. The combined effect of these factors propelled cost savings to $922.3 million pesos in the second quarter which represent a 13.7% reduction in total costs when compared to the second quarter last year in terms of Generally Accepted Accounting Principles in Mexico. For the first half of 2001, costs savings ascended to $911.7 million pesos that represents a 6.9% reduction. It is important to highlight that these cost savings, together with the excellent results achieved at our railroad operations, entirely mitigated the effect of lower prices of the metals that we produce and sell. G.Mexico consolidated sales for the second quarter of 2001 amounted to $7,361.5 million pesos and represented a 9.9% decline when compared to those reported last year and, for the first six months ended June 30th, total sales amounted to $15,135.7 million pesos which represented an 5.7% decline. The decrease can be mainly attributed to the lower metal market prices which: in terms of zinc, decreased by 14%, by 12% in terms of silver, by 7% for gold and, an 11.5% decrease for molybdenum, when compared to the same period last year. With respect to copper, our principal metal, prices decreased by 3.3% due to the slow down in the US economy during the period. However, during the second quarter, copper sales volume increased by 4.7% which, together with the cost savings mentioned above, helped mitigate the effect of the lower copper price. Zinc mine production and sales volume at both Minera Mexico and Asarco were lower due to the closure of two high cost underground facilities in the case of Mexico - Velardena and Rosario - and the closure of a low grade shoot in our underground mines located in the state of Tennessee, United States. Lead and silver sales also registered a decrease in volume sold due to the East Helena, Montana, lead smelter temporary shutdown. The smelter will remain closed until lead concentrate market conditions improve. In addition, gold and silver sales decreased significantly during the period in question due to a decrease in the purchases from third parities as well as an increase in inventories of refined gold and silver. As is demonstrated in the sales table, consolidated sales suffered considerably from the lower market prices of our principle metals with the only exception of lead. The mining division (AMC) accounted for 84.0% of sales and was denominated in dollars and the remaining 16.0% corresponded to the railroad division and was denominated in pesos. Operating profit for the three months ended June 30th of 2001 amounted to $667.6 million pesos and compares to $601.8 million pesos generated during the same period last year. The increase can be mainly attributed to the aforementioned measures and cost savings. In addition, for the six months ended June 30th of 2001, operating profit ascended to $963.0 million pesos and compares to $1,106.0 million generated last year, a small decrease once the low metal prices are taken into account. Operating cash flow (EBITDA) for the second quarter of 2001 amounted to $1,580.1 million pesos or 21.5% of sales and represented a 8.0% increase when compared to last year<180>s figure, thus reflecting the significant cost savings. For the six months ended June 30th of 2001, consolidated EBITDA amounted to $2,838.4 million pesos and compares with $2,848.1 million generated during the first six months of 2000. The consolidated integrated cost of financing in accordance with Mexican GAAP represented a $287.8 million peso gain during the first six months of 2001 due principally to the Mexican peso appreciation against the dollar by $765.5 million pesos, a $696.7 million peso gain on monetary position and, a net debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay cost of $1,174.4 million pesos. OTHER RELEVANT INFORMATION Investments Total capital investment for the second quarter of 2001 ascended to $143.4 million dollars and for the six months ended on June 30th of the present year, said investments amounted to $229.0 million dollars. These capital expenditures were funded primarily through the company's own cash flow and that of third parties. With respect to capital investments, we are about to initiate operations at Cananea, during the next few weeks of 2001, of the new electrolytic plant with an annual capacity of 22,000 metric tones of copper cathodes and a total investment of approximately $50 million dollars. Bulletin C-2 Beginning on January January: see month. 1st of 2001, in accordance with Generally Accepted Accounting Principles in Mexico (Mexican GAAP), the new accounting bulletin C-2 denominated "Financial Instruments" took effect. The bulletin establishes the criteria criteria (krītēr´ē  ),n. for the measurement, recognition and presentation in financial statements of financial instruments and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. . The impact of said instruments must be market to market and the result reflected in the integral cost of financing as an asset or liability. The company is presently evaluating the impact of the regulation on G.Mexico financial statements.
STATISTICS
GRUPO MEXICO CONSOLIDATED
Highlights (Expressed in Thousands of US Dollars - U.S. Gaap)
FINANCIAL Three Months Ended, Six Months Ended,
US GAAP June 30 June 30 Var. June 30 June 30 Var.
2001 2000 % 2001 2000 %
Net Sales 771,995 856,432 (9.9) 1,545,210 1,680,802 (8.1)
Operating
Profit 99,037 92,011 7.6 135,620 139,597 (2.8)
EBITDA 170,127 156,757 8.5 279,013 272,133
EBITDA
Margin 22.0% 18.3% 18.1% 16.2% 2.5
Consolidated Production Sales:
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 289,873 276,776 4.7 554,136 552,894 0.2
Zinc (MT) 45,896 50,761 (9.6) 94,172 100,041 (5.9)
Silver (Kg) 376,843 511,954 (26.4) 710,319 949,197 (25.2)
Gold (Kg) 2,234 3,155 (29.2) 4,786 6,716 (28.7)
Molybdenum (MT) 3,023 3,932 (23.1) 6,829 7,396 (7.7)
Lead (MT) 17,739 22,452 (21.0) 33,751 45,620 (26.0)
MINING DIVISION- AMERICAS MINING CORPORATION
Statistics - Minera Mexico (MM)
MM - MINE PRODUCTION
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 72,905 79,875 (8.7) 149,007 161,197 (7.6)
Zinc (MT) 39,159 41,372 (5.3) 74,794 85,273 (12.3)
Silver (Kg) 132,434 121,535 9.0 257,892 251,320 2.6
MM - PRODUCTION SOLD
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 94,932 97,664 (2.8) 183,526 186,751 (1.7)
Zinc (MT) 32,105 35,967 (10.7) 67,670 73,544 (8.0)
Silver (Kg) 175,676 191,785 (8.4) 316,624 329,378 (3.9)
MM - FINANCIAL (In Thousands of USD)
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Net Sales 239,159 272,308 (12.2) 482,232 525,906 (8.3)
Operating
Profit 23,725 32,285 (26.5) 48,213 66,853 (27.9)
EBITDA 45,175 51,673 (12.6) 90,472 106,683 (15.2)
EBITDA
Margin 18.9% 19.0% 18.8% 20.3%
Statistics - ASARCO
ASARCO - MINE PRODUCTION
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 60,191 70,236 (14.3) 114,251 140,973 (19.0)
Zinc (MT) 14,105 15,429 (8.6) 25,136 29,248 (14.1)
Silver (Kg) 18,313 24,531 (25.3) 28,653 48,724 (41.2)
ASARCO - PRODUCTION SOLD
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 110,161 117,855 (6.5) 212,830 235,402 (9.6)
Zinc (MT) 13,791 14,794 (6.8) 26,502 26,497 0.0
Silver (Kg) 182,964 317,659 (42.4) 348,520 605,717 (42.5)
ASARCO - FINANCIAL (In thousands of USD)
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Net Sales 236,677 325,416 (27.3) 502,366 638,091 (21.3)
Operating
Profit 33,776 1,877 1,699.5 3,536 (24,343) (114.5)
EBITDA
USD 42,494 11,491 269.8 23,697 (3,748) (732.3)
Margin
EBITDA 18.0% 3.5% 4.7% N.A.
Statistics - Southern Peru Copper Corporation (SPCC)
SPCC - MINE PRODUCTION
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 77,484 83,580 (7.3) 156,355 163,558 (4.4)
Silver (Kg) 25,624 31,768 (19.3) 48,537 58,824 (17.5)
SPCC - PRODUCTION SOLD
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Copper (MT) 87,995 80,635 9.1 168,703 163,890 2.9
Silver (Kg) 27,680 27,397 1.0 56,300 54,622 3.1
SPCC -FINANCIAL (Thousands of USD)
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Net Sales 162,835 157,021 3.7 325,254 320,143 1.6
Operating
Profit 19,848 29,268 (32.2) 48,366 56,015 (13.7)
EBITDA 38,608 47,855 (19.3) 87,951 93,240 (5.7)
EBITDA
Margin 23.7% 30.5% 27.0% 29.1%
RAILROAD DIVISION - GRUPO FERROVIARIO MEXICANO
Statistics - (GFM)
GFM - SALES FOR SERVICES (Thousands of USD)
3 Months 3 Months 6 Months 6 Months
Ended Ended Var Ended Ended Var
Jun/30/2001 Jun/30/2000 % Jun/30/2001 Jun/30/2000 %
Net Sales 145,318 142,205 2.2 266,377 281,368 (5.3)
Operating
Profit 24,285 20,771 16.9 39,425 38,943 1.2
EBITDA 45,536 37,853 20.3 79,844 73,682 8.4
EBITDA
Margin 31.3% 26.6% 30.0% 26.2%
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