Advertisement
Others Q3 2012 Q2 2012 Q3 2011Net sales ($ million) 188.5 226.6 (17%) 219.6 (14%)Operating income ($ million) 23.8 31.5 (24%) 27.7 (14%)Operating margin (% of sales) 13% 14% 13%
Net sales of other products and services decreased 14% year on year and 17% sequentially, reflecting lower sales of industrial equipment in Brazil, which also impacted operating income and margins.
Selling, general and administrative expenses, or SG&A, amounted to 17.3% of net sales in the third quarter of 2012, compared to 17.4% in the previous quarter and 18.5% in the third quarter of 2011.
Other operating income, net, amounted to US$44.2 million in the third quarter of 2012, compared to US$0.8 million in the previous quarter and US$1.6 million in the third quarter of 2011. In August, 2012, Confab, our Brazilian subsidiary, collected US$49 million from the Brazilian government, in interest and monetary adjustment over a tax benefit received in 1991.
Net interest expenses amounted to US$8.8 million in the third quarter of 2012, compared to US$7.0 million in the previous quarter and US$8.5 million in the third quarter of 2011.
Other financial results generated a loss of US$15.2 million during the third quarter of 2012, compared to a loss of US$16.5 million in the previous quarter and a gain of US$28.0 million during the third quarter of 2011. These results largely reflect gains and losses on net foreign exchange transactions and the fair value of derivative instruments and are partially offset by changes to our net equity position. During the third quarter of 2011, these gains were mainly attributable to the revaluation of the US dollar against the Brazilian real (+18.6%), as our Brazilian subsidiaries held a positive net financial position in US dollar in the quarter.
Equity in earnings of associated companies generated a gain of US$14.4 million in the third quarter of 2012, compared to a gain of US$11.1 million in the previous quarter and a gain of US$1.5 million in the third quarter of 2011. These gains were derived mainly from our equity investment in Ternium and reflected higher results at Ternium.
Income tax charges totaled US$136.5 million in the third quarter of 2012, equivalent to 24% of income before equity in earnings of associated companies and income tax, compared to 25% in the previous quarter and in the third quarter of 2011.
Results attributable to non-controlling interests amounted to gains of US$1.1 million in the third quarter of 2012, compared to losses of US$0.9 million in the previous quarter and to gains of US$40.5 million in the third quarter of 2011. Year on year, the reduction in gains attributable to non-controlling interests is due to the acquisition of all the non-controlling interests in Confab in the second quarter of 2012.
Cash Flow and Liquidity of 2012 Third Quarter
Net cash provided by operations during the third quarter of 2012 was US$491.4 million, compared to US$414.5 million in the previous quarter and US$336.3 million in the third quarter of 2011. Working capital increased by US$107.1 million during the third quarter of 2012, compared to a decrease of US$53.1 million in the previous quarter and a negligible increase in the third quarter of 2011. The increase in working capital in the third quarter of 2012, was mainly due to a decrease in trade payables, following the conclusion of several plant maintenance shutdowns.
