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SANTIAGO, Chile, Aug. 12 /PRNewswire-FirstCall/ -- Masisa S.A. (NYSE:MYS) announced today its consolidated financial results for the second quarter and six months ended June 30, 2005. The financial information presented below corresponds to Masisa S.A. (formerly Terranova S.A.), the surviving company of the merger between Terranova S.A. and the old Masisa S.A. Masisa S.A. is a forestry group with operations in Chile, the United States, Brazil, Argentina, Venezuela, and Mexico. The figures disclosed are stated in U.S. dollars and prepared in accordance with Chilean GAAP. Highlights -- Net sales for the semester increased 18%, year-over-year, amounting to US$354.0 million. -- Gross margin for the first semester of 2005 increased 17%, year-over- year, amounting to US$98.3 million. Gross margin as a percentage of sales for the first semester remains at 28% the same percentage reported during first semester of 2004. -- Operating income for first semester of 2005 increased 12%, year-over- year, amounting to US$47.6 million driven mainly by higher sales. -- Earnings per share for the first semester of 2005 was US$0.0043. Due to the merger of Terranova and old Masisa, this amount is not directly comparable with the earnings per share reported in the same period of 2004. Quarter Ended Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, 2004 2004 2004 2005 2005 (millions of US$, except per share data) Net Sales 155.1 175.5 174.5 178.1 175.9 Gross Profit 47.0 55.6 49.7 51.5 46.8 Operating Income 25.7 31.6 20.9 28.4 19.3 Net Income (1) 8.1 10.2 30.6 14.4 7.1 Net Earnings Per Common Share 0.0021 0.0026 0.0078 0.0029 0.0014 Net Earnings Per ADS (2) -- -- -- 0.14 0.07 Margins (3) Gross Profit Margin 30.3% 31.7% 28.5% 28.9% 26.6% Operating Margin 16.6% 18.0% 11.9% 15.9% 10.9% Net Income Margin 5.2% 5.8% 17.5% 8.1% 4.0% Change % (4) Net Sales -- 13.1% -0.6% 2.1% -1.3% Gross Profit -- 18.2% -10.7% 3.8% -9.3% Operating Income -- 23.1% -34.0% 36.0% -32.2% Net Income -- 26.2% 200.3% -52.8% -50.7% (1) Net Income as of March 31, 2005, is a pro-forma, considering the merger effective as of January 1, 2005. (2) One ADS is equivalent to 50 Common Shares. (3) As a percent of Quarter's Net Sales. (4) Compared to the previous quarter Due to rounding, numbers may not add up. Sales Net sales in the first semester of 2005 reached US$354.0 million, an increase of 18% or US$53.1 million compared to the same period of 2004, mainly due to price and volume sales increases on MDF Mouldings in the United States, as well as a price increase on MDF, principally in Venezuela, Brazil and Mexico. Net sales during the second quarter declined 1%, to US$175.9 million, compared to the first quarter of 2005. Operating Income Operating income for the first semester reached US$47.6 million, which when compared to the first semester of the previous year, represents an increase of 12%. However, compared to the first quarter 2005, operating income declined 32%. The main factors explaining the decrease in operating income in the second quarter 2005, compared to first quarter 2004 were: -- Extraordinary SG&A expenses in Chile in connection with the merger of Terranova and old Masisa. -- Higher cost of sales in Chile, Brazil and Argentina due to higher prices for wood, resin, energy, and the cost effects of the appreciation of the Brazilian currency. -- Decreased sales in the Mexican market with lower board and sawn wood physical volume sales, partially offset by higher board prices and higher OSB and MDF Mouldings physical volume sales in the United States. Non-operating Income Non-operating income decreased to a loss of US$18.6 million in the semester, compared to a loss of US$10.1 million in the same period of 2004. The decrease in non-operating income is due mainly to foreign exchange losses. Foreign exchange losses for the semester totaled US$2.7 million compared to a gain of US$8.9 million reported in the first semester of 2004. The change in the foreign exchange gain (loss), year over year, was mainly due to the effects of variations on the exchange rate in the company's debt indexed in UF (inflation adjusted Chilean rate currency). Note: This news release, as well as financial information presented below, correspond to Masisa S.A. (formerly Terranova S.A.), the surviving company of the merger by incorporation of old Masisa S.A. into and with Terranova S.A. on May 31, 2005. The exchange of common shares and ADSs of the old Masisa S.A. for common shares and ADSs of Masisa S.A. (formerly Terranova S.A.) occurred after the close of the market on August 4, 2005. Masisa's ADSs began trading on the New York Stock Exchange on August 5, 2005. The exchange ratios are, respectively, 2.56 common shares and 1.536 ADSs of Masisa S.A. (formerly Terranova S.A.) for each common share and ADS of the old Masisa S.A. To view the entire release, please go to Masisa's webpage: http://www.masisa.com/ For further information contact: Paul White / Emilio Pellegrini Investor Relations +011-56-2-707-8707 / Internet: http://www.masisa.com/ Melanie Carpenter / Peter Majeski i-advize Corporate Communications, Inc. +1-212-406-3692/41 DATASOURCE: Masisa S.A. CONTACT: Investors, Paul White, , or Emilio Pellegrini, , both of Masisa S.A., +011-56-2-707-8707; or Melanie Carpenter, +1-212-406-3692, or Peter Majeski, +1-212-406-3641, both of i-advize Corporate Communications, Inc., for Masisa S.A., or Web site: http://www.masisa.com/

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