TCRLA_Public/050223.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

           Wednesday, February 23, 2005, Vol. 6, Issue 38

                            Headlines

A R G E N T I N A

ABEL GONZALEZ: Verification Deadline Approaches
ACTION FANS: Asks Court for Reorganization
AGEA: Bonds Retain `BB' Rating
ALCRI PLUS: Reorganization Request Approved
AUTOPISTAS DEL SOL: S&P Issues `argB+' Ratings to Several Bonds

BILOBA S.A.: Enters Bankruptcy on Court Orders
BODEGAS DEL OESTE: Court OKs Creditor's Bankruptcy Request
CENTRAL PUERTO: Local Fitch Confirms Category 3 Rating on Shares
CONFECCIONES MELINA: Concludes Reorganization
EDENOR: Argentina S&P Maintains Default Ratings on Bonds

IEBA: $230M of Corporate Bonds Remain at Junk Level
ILUMINACION BUENOS AIRES: Claims Submission Nears End
MULTIMEDICAL S.A.: Court Orders Liquidation
PETROBRAS ENERGIA: To Get $200M Loan From Dutch Sister Company
PETROBRAS ENERGIA: Ends 4Q04 With BRL522 Million Gain

PROMOTORA DE COMUNICACIONES: Moves to Restructure Debt
TRANSENER: Government Schedules Public Hearing for March 18


B A R B A D O S

SUNBEACH COMMUNICATION: Belle Quits as Non-Executive Director


B R A Z I L

EMBRATEL: Moves Ahead to Implement Capital Increase Plan
TELEMAR: Prepares Unit for U.S. SEC Registration
UNIBANCO: Reports BRL375 Million Net Income in 4Q04


J A M A I C A

KAISER ALUMINUM: Bankruptcy Court OKs Extension of Exclusivity
KAISER ALUMINUM: Committees Approve Salary Hike for VP/CFO
KAISER ALUMINUM: Director Notifies Board of Intent to Resign


M E X I C O

GRUPO DESC: Operating Income Reaches US$89 Million in 2004


V E N E Z U E L A

EDC: Invites Shareholders to March 4 Meeting
PDVSA: 30 Execs Fired Due to Corruption Charges
PDVSA: Professor Says Company is Keeping Oil Profits Abroad
* VENEZUELA: To Make Good on Oil-Linked Debt Payment

     -  -  -  -  -  -  -  -                           

=================
A R G E N T I N A
=================

ABEL GONZALEZ: Verification Deadline Approaches
-----------------------------------------------
The verification of claims for the Abel Gonzalez S.A.
reorganization will end on April 6 according to Infobae.

Creditors with claims against the Company must present proof of
the liabilities to Ms. Clorinda Donato, the court-appointed
trustee, before the deadline. Creditors are also scheduled to
ratify the Company's completed settlement plan on October 24.

Court No. 4 of Buenos Aires' civil and commercial tribunal
handles the Company's case with assistance from Clerk No. 7.

CONTACT: Abel Gonzalez S.A.
         Malabia 2173
         Buenos Aires

         Ms. Clorinda Donato, Trustee
         Maipu 42
         Buenos Aires


ACTION FANS: Asks Court for Reorganization
------------------------------------------
Action Fans S.R.L., a restaurant operating in Buenos Aires, has
requested voluntary liquidation after failing to pay its
liabilities, says La Nacion. The petition, once approved by the
court, will allow the Company to discontinue its operations and
sell assets in order to pay its debts.

In its filing, the Company reported assets valued at US$30,000
and liabilities totaling US$110,991. The case is pending before
Court No. 24 of Buenos Aires' civil and commercial tribunal.
Clerk No. 48 assists the court on this case.

CONTACT: Action Fans S.R.L.
         Avenida Federico Lacroze 2206
         Buenos Aires


AGEA: Bonds Retain `BB' Rating
------------------------------
Fitch Argentina Calificadora de Riesgo S.A., the Argentine arm
of international ratings agency Fitch Ratings, maintains a
`BBarg' rating on corporate bonds issued by Arte Grafico
Editorial Argentino S.A. (AGEA), says the Comision Nacional de
Valores(CNV), Argentina's securities regulator.

The rating, which was determined based on the Company's
financial health as of September 30, 2004 affected the following
bonds:

- US$30.6 million worth of "Serie C -ON a Tasa Fija creciente"
with undisclosed maturity date;

- US$83.72 million worth of "Obligaciones Negociable SERIE B por
hasta U$S 83.72 MM (2011)" with undisclosed maturity date; and

- US$600 million worth of "obligaciones negociables" with
undisclosed maturity date.


ALCRI PLUS: Reorganization Request Approved
-------------------------------------------
Alcri Plus S.R.L. will begin reorganization following the
approval of its petition by Court No. 17 of Buenos Aires' civil
and commercial tribunal. The opening of the reorganization will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Ms. Marina Fernanda Tynik will oversee the reorganization
proceedings as the court-appointed trustee. She will verify
creditors' claims until April 21. Next, the validated claims
will be presented in court as individual reports on May 20.

The trustee is also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. This report will be presented
in court on July 5.

The Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on December 20.

CONTACT: Ms. Marina Fernanda Tynik, Trustee
         Avda Rivadavia 10444
         Buenos Aires


AUTOPISTAS DEL SOL: S&P Issues `argB+' Ratings to Several Bonds
---------------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
assigned an 'argB+' rating for the following corporate bonds
issued by Autopistas del Sol S.A.:

- US$112,334,466 worth of bonds described as "Obligaciones Neg.
con descuento con cotizacion a 5 anos de vencimiento, monto
original" with undated maturity.

- US$49,306,639 worth of bonds described as "Obligaciones Neg.
con descuento sin cotizacion a 5 anos de vencimiento, monto
original" with undated maturity.

-  US$215,225,419 worth of bonds described as "ONS a tasa de
interes escalonada creciente a 10 anos de vencimiento, monto
original" with undated maturity.

The ratings, posted by securities regulator Comision Nacional de
Valores(CNV) in its web site, were based on the Company's
financial standing as of September 30, 2004.

S&P explains that bonds with `argB+' ratings face exposure to
adverse business or economic conditions that could lead to an
issuer's inadequate capacity to meet its obligations.


BILOBA S.A.: Enters Bankruptcy on Court Orders
----------------------------------------------
Biloba S.A. enters bankruptcy protection after Court No. 20 of
Buenos Aires' civil and commercial tribunal ordered the
Company's liquidation. The order effectively transfers control
of the Company's assets to the court-appointed trustee who will
supervise the liquidation proceedings.

Infobae reports that the court selected Mr. Miguel Angel Ferro
as trustee. He will be verifying creditors' proofs of claims
until the end of the verification phase on April 29.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the Company's accounting
and business records. The individual reports will be submitted
on June 13 followed by the general report that is due on August
9.

Clerk No. 39 assists the court on this case.

CONTACT: Mr. Miguel Angel Ferro, Trustee
         Venezuela 2376
         Buenos Aires


BODEGAS DEL OESTE: Court OKs Creditor's Bankruptcy Request
----------------------------------------------------------
Bodegas del Oeste S.A. entered bankruptcy after Court No. 9 of
Buenos Aires civil and commercial tribunal approved a bankruptcy
motion filed by Banco Ciudad de Buenos Aires, reports La Nacion.
The Company's failure to pay US$44,365.09 in debt prompted the
creditor to file the petition.

Working with the city's Clerk No. 18, the Company assigned Mr.
Miguel Troisi as trustee for the bankruptcy process. The
trustee's duties include the authentication of the Company's
debts and the preparation of the individual and general reports.
Creditors are required to present their proofs of claims to the
trustee by May 24.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be based on
the results of the verification process.

CONTACT: Bodegas del Oeste S.A.
         Hipolito Irigoyen 900
         Buenos Aires

         Mr. Miguel Troisi, Trustee
         Cerrito 146
         Buenos Aires


CENTRAL PUERTO: Local Fitch Confirms Category 3 Rating on Shares
----------------------------------------------------------------
The Argentine arm of Fitch Ratings confirmed its Category 3
rating on shares in local thermo generator Central Puerto,
reports Business News Americas.

In a statement, Fitch explained that the rating reflects Central
Puerto's low cash generation capacity and the shares' high
liquidity.

Central Puerto suspended all capital and interest payments on
its due debt in February 2002 in order to safeguard its
operations and working capital and began a process of
renegotiating its debt.

France's Total owns 63.9% of Central Puerto.


CONFECCIONES MELINA: Concludes Reorganization
---------------------------------------------
The reorganization of Buenos Aires-based Confecciones Melina
S.A. has ended. Data revealed by Infobae on its Web site
indicated that the process was concluded after Court No. 24 of
Buenos Aires' civil and commercial tribunal, with assistance
from Clerk No. 48, homologated the debt agreement signed between
the Company and its creditors.


EDENOR: Argentina S&P Maintains Default Ratings on Bonds
--------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains the 'raD' rating on US$600 million worth of corporate
bonds issued by Edenor S.A. The rating was determined from the
Company's finances as of September 30, 2004.

Describing the bonds as "Programa Global de Obligaciones
Negociables", Argentine securities regulator Comision Nacional
de Valores (CNV) said that the issue would mature on November 5,
2006.

The ratings agency said that an obligation is rated `raD' when
it is in payment default, or the obligor has filed for
bankruptcy. The rating is used when interest or principal
payments are not made on the date due, even if the applicable
grace period has expired, unless Standard & Poor's believes that
such payments will be made during such grace period.

Edenor, a Buenos Aires electricity distributor, is a unit of
Electricite de France (EdF).

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          e-mail: to ofitel@edenor.com.ar

          Web Site: http://www.edenor.com.ar


IEBA: $230M of Corporate Bonds Remain at Junk Level
---------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains an `raD' on a total of US$230 million of corporate
bonds issued by Inversora Electrica de Buenos Aires S.A. (IEBA)

According to the CNV, the rating applies to US$130 million of
bonds described as" Obligaciones Negociables Simples no
convertibles en acciones", which will come due September 16 this
year.

The rating also affects US$100 million of " Obligaciones
Negociables Simples no convertibles en acciones" that expired on
Sep. 16, 2002.

The rating action is based on IEBA's financial status as of
September 30, 2004.

S&P said that an `raD' rating is assigned when it is in payment
default or if the obligor has filed for bankruptcy. The rating
may also be used when principal payments are not made on the due
date even if the applicable grace period has not expired, unless
the ratings agency believes that such payments will be made
during such grace period.


ILUMINACION BUENOS AIRES: Claims Submission Nears End
-----------------------------------------------------
The verification of claims for the liquidation case of
Iluminacion Buenos Aires S.A. will end on March 31 according to
Infobae. Creditors with claims against the bankrupt Company must
present proof of the liabilities to Mr. Miguel Angel Tregob, the
court-appointed trustee, before the deadline.

Court No. 25 of Buenos Aires' civil and commercial tribunal
handles the Company's case with the assistance of Clerk No. 49.
The bankruptcy will conclude with the liquidation of the
Company's assets to pay its creditors.

CONTACT: Mr. Miguel Angel Tregob, Trustee
         Lima 287
         Buenos Aires


MULTIMEDICAL S.A.: Court Orders Liquidation
-------------------------------------------
Court No. 5 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Multimedical S.A. after the Company
defaulted on its debt obligations, Infobae reveals. The
pronouncement will effectively place the Company's affairs as
well as its assets under the control of Ms. Edit Mildre
Ghiglione, the court-appointed trustee.

Ms. Ghiglione will verify creditors' proofs of claims until
April 11. The verified claims will serve as basis for the
individual reports to be submitted in court on May 23. The
submission of the general report should follow on July 5.

The city's Clerk No. 10 assists the court on this case that will
end with the disposal of the Company's assets in favor of its
creditors.

CONTACT: Ms. Edit Mildre Ghiglione, Trustee
         Paraguay 1225
         Buenos Aires


PETROBRAS ENERGIA: To Get $200M Loan From Dutch Sister Company
--------------------------------------------------------------
Petrobras Energia SA (PECO.BA), the Argentine unit of state-
owned Brazilian oil giant Petroleo Brasileiro (Petrobras), is
expecting a US$200-million loan from the parent's Company Dutch
subsidiary.

Dow Jones Newswires reports that the loan coming from Petrobras
Internacional Braspetro BV will be paid back over 10 years with
an annual interest rate of 7.2%.

The financing will be "destined toward paying back financial
obligations assumed on Oct. 4, 2002," Petrobras Energia said in
a filing to the local stock exchange.

CONTACT: Petrobras Energia Participaciones S.A.
         Edificio Perez Companc
         Maipu 1
         Buenos Aires, C 1084 ABA
         Argentina
         Phone: 54-11-4344-6000

         Web site: http://www.petrobrasenergia.com


PETROBRAS ENERGIA: Ends 4Q04 With BRL522 Million Gain
-----------------------------------------------------
Petrobras Energia Participaciones S.A. (Buenos Aires: PBE NYSE:
PZE) announces the results for the fourth quarter ended December
31, 2004.

The Company posted a P$522 million gain in 2004 quarter compared
to a P$143 million loss in 2003 quarter. Operating income for
2004 quarter totaled P$442 million, accounting for a P$312
million increase compared to 2003 quarter. This improvement was
mainly attributable to the following:

- 27.1% increase in the average oil price per barrel.

- Increase in Refining gross margin due to the rise in prices of
products which are not subject to the Price Stability Agreement,
both in the foreign and domestic markets.

- Increase in international prices for petrochemical products:
80%, 67% and 44% for styrene, polystyrene and fertilizers,
respectively.

In addition, 2004 quarter results were positively affected by
the following:

- P$268 million partial recovery of PESA tax loss carry forwards
for which allowances were provided, based on their expected
recoverability.

- P$45 million gain attributable to the valuation at fair value
of derivative financial instruments that do not qualify for
hedge accounting.

Sales for 2004 quarter increased 28.8% to P$1,952 million.

Gross profit for 2004 quarter was P$764 million, 37.7% higher
compared to 2003 quarter. Gross margin was 39.1% and 36.6% in
2004 and 2003 quarters, respectively.

The Company posted a P$678 million gain in 2004 fiscal year
ended December 31, 2004, a 78% increase compared to fiscal year
ended December 31, 2003.

Sales for 2004 fiscal year increased P$1,480 million (26.9%) to
P$6,974 million compared to 2003 fiscal year.

Gross profit for 2004 fiscal year increased 31.1% to P$2,764
million compared to 2003 fiscal year. Gross margin was 39.6% and
38.4% in 2004 and 2003 fiscal years, respectively.

Operating income for 2004 fiscal year increased 40.5% to P$1,731
million compared to 2003 fiscal year.

The Company's shareholders' equity increased 14% YoY to P$5,511
million as of December 31, 2004.

In 2004 quarter net sales increased P$437 million or 28.8% to
P$1,952 million. Net sales for 2004 quarter reflect P$122
million and P$145 million attributable to our share in the net
sales of CIESA and Distrilec, respectively, (net of interCompany
sales of P$2 million). Net sales for 2003 quarter reflect P$117
million and P$116 million attributable to our share in the net
sales of CIESA and Distrilec, respectively, (net of interCompany
sales of P$4 million). Without proportional consolidation, 2004
quarter net sales increased P$401 million or 31.2%. The rise in
oil price drove strong sales increases in the Petrochemical
(64.7%), Refining (37.3%) and Oil and Gas Exploration and
Production (20.4%) business segments.

Gross Profit

- Gross profit increased P$209 million or 37.7% to P$764 million
in 2004 quarter. The 2004 quarter gross profit reflects P$60
million and P$21 million attributable to our share in the gross
profit of CIESA and Distrilec, respectively. The 2003 quarter
gross profit reflects P$74 million and P$22 million attributable
to our share in the gross profit of CIESA and Distrilec,
respectively. Without proportional consolidation, gross profit
for 2004 quarter increased P$224 million or 48.8% to P$683
million, mainly as a result of the increase in gross profit for
the Oil and Gas Exploration and Production (P$116 million),
Refining (P$67 million) and Petrochemicals (P$29 million)
segments. Gross margin totaled 39.1% in 2004 quarter and 36.6%
in the comparable quarter of  2003.

Administrative and selling expenses

- Administrative and selling expenses rose to P$201 million or
28% in 2004 quarter. The 2004 quarter administrative and selling
expenses reflect P$4 million and P$21 million attributable to
our share in the administrative and selling expenses of CIESA
and Distrilec, respectively. The 2003 quarter administrative and
selling expenses reflect P$17 million and P$16 million
attributable to our share in the administrative and selling
expenses of CIESA and Distrilec, respectively. Without
proportional consolidation, administrative and selling expenses
increased to P$176 million or 41.9% in 2004 quarter. Such
increase was mainly due to (i) higher labor costs, institutional
advertising expenses and other expenses related to the merge
process in Argentina and (ii) higher labor costs in other
countries. The ratio of administrative and selling expenses to
sales was 10.3% in 2004 quarter and 10.4% in 2003 quarter.

Other Operating Income (Expense), Net

- Other operating income (expense), net accounted for P$119
million and P$91 million losses in 2004 and 2003 quarters,
respectively. Other operating income (expense), net for 2004
quarter reflects P$15 million and P$12 million losses,
attributable to our share in other operating income (expense),
net of CIESA and Distrilec, respectively. In 2003 quarter, other
operating income (expense), net reflects a P$12 million gain
attributable to our share in other operating income (expense),
net of CIESA, while no significant results were recorded in
Distrilec. Without proportional consolidation, other operating
expense, net accounted for P$92 million and P$79 million losses,
respectively, mainly attributable to the incidence of costs of
unused transportation capacity relating to the Ship or Pay
Contract with Oleoducto de Crudos Pesados S.A.

Operating income

- Operating income increased to P$442 million or P$312 million
in 2004 quarter. The 2004 quarter operating income reflects a
P$45 million gain and a P$12 million loss attributable to our
share in operating income of CIESA and Distrilec, respectively.
The 2003 quarter reflects a P$45 million gain attributable to
our share in the operating income of CIESA and a P$6 million
gain attributable to our share in the operating income of
Distrilec. Without proportional consolidation, operating income
moved up to P$409 million in 2004 quarter from P$79 million in
2003 quarter, mainly as a result of the increase in operating
income for the Oil and Gas Exploration and Production (P$241
million), Refining (P$71 million) and Petrochemicals (P$50
million) business segments.

Equity in Earnings of Affiliates

- Equity in earnings of affiliates accounted for a P$3 million
gain in 2004 quarter compared to P$77 million in the prior-year
quarter. Without proportional consolidation, equity in earnings
of Affiliates and Affiliates Under Joint Control accounted for
P$17 million and P$200 million gains in 2004 and 2003 quarters,
respectively. The 2003 quarter was positively affected by
variations in the recoverable value of utilities. In such
respect, the rise in the market value of listed shares of TGS
and Transener resulted in the reversal of the allowance for
valuation of these investments at realizable value, accounting
for a P$196 million gain. Estimate of the respective recoverable
value is subject to significant uncertainties which limit the
quality of the assumptions, estimates and evaluations inherent
to such determination. Accordingly, in the current situation the
market value of listed shares is the most objective method of
estimating the net realizable value of such holdings. The main
variations were the following:

TGS

In 2004 quarter, equity in earnings of TGS declined to P$5
million from P$32 million in 2003 quarter. In 2003 quarter, the
effect of the positive variation in the recoverable value of TGS
resulted in the reversal of allowances, accounting for a P$27
million gain. Excluding the effect of the reversal of
allowances, equity in earnings of TGS accounted for a P$5
million gain in both quarters.

TGS's total sales revenues increased to P$253 million or 11.2%
in 2004 quarter. Sales revenues for the regulated segment
increased to P$109 million or 2.2%, due to higher sales of firm
transportation and interruptible transportation services and the
execution of new contracts effective May 2004. Sales revenues
for the unregulated segment increased 19.1%, with a 20.7% rise
in revenues from the NGL production and marketing segment,
primarily due to higher international prices.
As regards the US dollar-denominated net borrowing position, the
behavior of the exchange rate resulted in a drop in financial
income (expense), accounting for a P$14 million financial
expense in 2004 quarter and a P$60 million financial expense in
the comparable quarter of 2003.

CIESA

In 2004 quarter, equity in earnings of CIESA fell to P$17
million down from P$131 million in 2003 quarter. In 2003
quarter, the effect of the positive variation in the recoverable
value of CIESA resulted in the reversal of allowances,
accounting for a P$128 million gain. Excluding the effect of the
reversal of allowances, equity in earnings of CIESA accounted
for a P$17 million gain in 2004 quarter and a P$3 million gain
in 2003 quarter.

As regards the US dollar-denominated net borrowing position, the
behavior of the exchange rate resulted in a reduction in
financial income (expense) in 2004 quarter, accounting for a
P$10 million financial expense in 2004 quarter and a P$14
million financial expense in the prior-year quarter. CIESA's
equity in earnings of TGS accounted for P$43 million and $23
million gains in 2004 and 2003 quarters, respectively.

Citelec / Transener

In 2004 quarter, equity in earnings of Citelec accounted for a
P$12 million loss, compared to a P$32 million gain in 2003
quarter. In 2003 quarter, the effect of the positive variation
in the recoverable value of Citelec resulted in the reversal of
allowances, accounting for a P$41 million gain. Excluding the
effect of the reversal of allowances, equity in earnings of
Citelec accounted for P$12 million and P$9 million losses in
both quarters, respectively.

The increase in losses in 2004 quarter is mainly attributable to
the 11.7% rise in operating costs to P$76 million up from P$68
million in 2003 quarter.

Empresa Boliviana de Refinacion (EBR)

In 2004 quarter, equity in earnings of EBR accounted for a P$10
million loss compared to a P$5 million gain in 2003 quarter. The
drop in results for 2004 quarter is primarily attributable to
bad receivables.

Refinor S.A.

In 2004 quarter, equity in earnings of Refinor rose to P$12
million from P$5 million in 2003 quarter. This significant
increase is mainly attributable to a higher contribution margin
since 2004 quarter sales rose 44%, in a proportion higher than
the increase in variable costs (37%). Gross sales for 2004
quarter were P$318 million compared to P$220 million in 2003
quarter. This increase is due to a combined effect: the 27% rise
in fuel prices as a result of the increase in international
prices, on the one hand, and the 19.4% increase in gas volumes
processed to 19.4 million cubic meters per day, on the other
hand.

Financial Income (Expense) And Holding Gains (Losses)

Financial income (expense) and holding gains (losses) reflect a
P$50 million loss in 2004 quarter compared to a P$295 million
loss in 2003 quarter. Financial income (expense) and holding
gains (losses) for 2004 quarter reflect a P$2 million gain
attributable to our share in the financial income (expense) and
holding gains (losses) of Distrilec. Financial income (expense)
and holding gains (losses) for 2003 quarter reflect P$37 million
and P$7 million losses attributable to our share in the
financial income (expense) and holding gains (losses) of CIESA
and Distrilec, respectively.

Without proportional consolidation, financial income (expense)
and holding gains (losses) fell, accounting for P$52 million and
P$251 million losses in 2004 and 2003 quarters, respectively.
This decline is mainly attributable to the 4.3% decline in the
future curve of crude oil prices in 2004 quarter, compared to
the 10.3% increase in 2003 quarter, which resulted in a P$201
million increase in gains attributable to the valuation at
market value of derivative instruments which do not qualify for
hedge accounting.


Other Income (Expense), net

- Other income (expense), net accounted for P$13 million and
P$110 million losses in 2004 and 2003 quarters, respectively.
Without proportional consolidation, other expenses, net
accounted for P$9 million and P$245 million losses in 2004 and
2003 quarters, respectively. Results for 2003 quarter mainly
reflect P$177 and P$37 million impairment charges relating to
operations in Ecuador and Rio Neuquen, respectively.

Income Tax

- Income tax accounted for P$159 and P$55 million gains in 2004
and 2003 quarters, respectively. The income tax charge for 2004
quarter reflects a P$3 million loss for our share in the income
tax of Distrilec. The income tax charge for 2003 quarter
reflects P$6 and P$2 million losses corresponding to our share
in the income tax of CIESA and Distrilec, respectively. Without
proportional consolidation, income tax accounted for P$162 and
P$63 million gains in both quarters, respectively. The 2004
quarter reflects the recognition of tax loss carry forwards for
which allowances were provided in the amount of P$268, partially
offset by the effect of the valuation at fair value of
derivative financial instruments in the amount of P$101 million.
The 2003 quarter reflects gains derived from the recognition of
deferred tax assets for which allowances were provided in the
amount of P$50 million, the effect of the valuation at fair
value of derivative financial instruments in the amount of P$43
million and losses derived from the recognition of revenues in
Venezuela in the amount of P$12 million.

Balance Sheet

The Consolidated General Balance Sheet as of December 31, 2004,
reflects the following amounts attributable to Affiliates Under
Joint Control:

- P$ 3,416 million for Property, Plant and Equipment.
- P$ 505 million for Short-Term Debt.
- P$ 1,446 million for Long-Term Debt.

Statement of Cash Flows

In the Statement of Cash Flows as of December 31, 2004, the 2004
quarter reflects the following amounts attributable to
Affiliates under Joint Control:

- P$ 46 million for depreciation
- P$ 29 million for acquisition of Property, Plant and Equipment
- P$ 222 million for cash at closing.

Oil and Gas Exploration and Production

- Net sales for 2004 quarter rose to P$879 million or 20%. This
increase derived primarily from the 27.1% rise in average sales
prices per barrel of oil equivalent (boe). Combined oil and gas
daily sales volumes fell to 156.5 thousand boe or 5.7% in 2004
quarter. In 2004 quarter, oil sales volumes decreased to 112.5
thousand bbl/d or 4.8% while gas sales volumes fell to 263.8
million cubic feet per day or 7.9%.

- In Argentina, sales rose to P$440 million or 7.6% in 2004
quarter, due to the 23.5% increase to P$59.4 in the average
sales price per boe. On the contrary, sales volumes fell to 80.5
thousand boe per day or 12.8%.

Oil sales increased to P$401 million or 7.2% in 2004 quarter as
a result of a 26% increase in the average sales price to P$91.1
per barrel in 2004 quarter up from P$72.1 per barrel in 2003
quarter. The significant rise in the international reference
price was mitigated by the tax on exports policy imposed by the
Argentine Government, used as reference for the domestic market.
Daily sales volumes declined to 47.8 thousand barrels or 15% in
2004 quarter, due to the fact that Argentine assets are mature
fields under production through secondary recovery with a
considerable natural decline.  

Gas sales increased to P$39 million or 11% in 2004 quarter,
mainly due to the 22% rise in average sales prices to P$2.17 per
thousand cubic feet in 2004 quarter up from P$1.78 per thousand
cubic feet in the comparable quarter of 2003. During 2004 fiscal
year, as a result of the implementation of the Natural Gas Price
Adjustment Mechanism (Esquema de Normalizacion de los Precios
del Gas Natural) provided under Decree 181/2004, the Secretariat
of Energy and Gas Producers agreed upon percentage and gradual
increases. On the other hand, the restrictions imposed on gas
exports by the Argentine Government had a negative impact. Daily
gas sales volumes fell to 196.5 million cubic feet  or 9%,
mainly due to Genelba shutdown for scheduled maintenance works.
Such effect was partially offset since a portion of those
volumes was delivered to Central Termica Buenos Aires.

Combined oil and gas sales outside of Argentina increased to
P$439 million or 36.8% in 2004 quarter. Total oil and gas sales
volumes increased to 76.0 thousand boe per day or 3.3%. Crude
oil average sales price increased to P$67.1 or 29.8% in 2004
quarter up from P$51.7 in the prior-year quarter.

In Venezuela, oil and gas sales increased to P$221 million or
34.8% in 2004 quarter. Crude oil average price per barrel
increased to P$50.5 or 27.4% in 2004 quarter from P$39.6 in 2003
quarter, in line with the rise in international reference
prices. Nevertheless, such increase was limited by the price
fixing system of third round agreements which provide decreasing
prices for increasing operating income. Gas average price
decreased to P$1.16 per thousand cubic feet or 35.9% in 2004
quarter, as a consequence of the reduction in the reference
price in Venezuela, which is regulated by the State.

Daily sales volumes of oil equivalent increased to 50.9 thousand
barrels or 6.3% in 2004 quarter. Drilling of new productive
wells in addition to the performance of workover activities
performed by the end of 2003 and early in 2004 at Oritupano
Leona and La Concepcion Oilfields allowed to increase production
levels.

In Ecuador, total oil sales for 2004 quarter rose to P$47
million or 14.6%. Crude oil daily sales volumes fell to 4.6
thousand barrels or 15%, since December 2004 production was
shipped together with January 2005 production so as to get a
better discount.

The average sales price rose to P$109 per barrel or 33.3% in
2004 quarter as a result of the increase in international
reference prices.

- Gross profit for 2004 quarter increased 35.4% or P$116 million
to P$444 million. Gross margin on sales increased to 50.5% in
2004 quarter from 44.9% in 2003 quarter. This rise in gross
profit mainly derived from the increase in oil international
prices mentioned above.

- Administrative and selling expenses increased to P$63 million
or 40.0% in 2004 quarter. This increase is attributable to
higher labor costs in Argentina and increased maintenance
expenses and payroll adjustments in Venezuela.

- Exploration expenses totaled P$2 million in 2004 quarter and
P$177 million in 2003 quarter. The 2003 quarter reflects the
charging to income of exploration investments of P$170 million
in Block 31 in Ecuador and in the San Carlos - Tinaco area in
Venezuela.

- Other operating income (expense), net for 2004 quarter
accounts for a P$91 million loss compared to a P$59 million loss
in 2003 quarter. The 2004 quarter mainly reflects a loss derived
from the unused transportation capacity relating to the Ship or
Pay Contract with OCP in Ecuador. During 2003 quarter, a
provision for environmental remediation was recorded.

Hedge of  Produced Crude Oil Price

Changes in the accounting measurement of derivative instruments
that do not qualify for hedge accounting are recognized in the
Income Statement under "Financial Income (Expense) and Holding
Gains (Losses)".

Liquid Hydrocarbon and Natural Gas Reserves

As of December 31, 2004, liquid hydrocarbon and natural gas
proved reserves, audited by Gaffney, Cline & Associates, totaled
732 MMboe (553 million barrels of oil and 1,077 billion cubic
feet of gas). This accounts for a 3.5% decline compared to
reserves certified as of December 31, 2003 (2.9% for liquid
hydrocarbons and 5.1% for natural gas).

During 2004 fiscal year, production totaled 59.9 MMboe and was
partially offset by a net addition of 34 MMboe as detailed
below:

- 14 MMboe were added through improvements resulting from
recoveries in production areas. The reduction in royalties in
Peru provided under Law 28109 "For the Promotion of Investment
in the Exploitation of Hydrocarbon Resources and Marginal
Reserves" had a great impact on such addition. As a result, new
development projects were incorporated.

- Through extensions in connection with known accumulations and
discoveries, 45 MMboe were added, mostly as a result of the
classification as proved reserves of discoveries and extensions
of proved areas in our assets in Ecuador. To a lesser extent and
as extensions in connection with producing fields, reserves in
the Argentine Austral Basin and in Venezuela were added.

- In addition, based on the performance of the different fields
and the projects implemented during 2004, negative technical
reviews totaled 25 MMboe, mainly attributable to an adjustment
in forecasts for secondary recovery projects in Argentina and
Venezuela.

Liquid hydrocarbons and natural gas account for 75% and 25%,
respectively, of total proved reserves. Sixty four per cent
(64%) of total proved reserves are located outside of Argentina.
This higher percentage compared to previous year is attributable
to the increase in reserves in Ecuador.

As of December 31, 2004, we had total oil and gas proved
reserves equal to 12.2 years of production at 2004 oil and gas
production levels.

Refining

- As from 2004 first quarter, allocation of product sales among
business units has been subject to a series of changes. As a
result, the Refining business segment commercializes oil
brokerage operations, which were previously commercialized by
the Hydrocarbon Marketing and Transportation business unit.
These operations accounted for P$5 million sales revenues in
2004 quarter.

- Operating income for 2004 quarter increased P$71 million to
P$60 million compared to a P$11 million loss in 2003 quarter.
Though a significant rise in crude oil prices was seen in 2004
quarter, such rise was offset by the new taxes imposed.
Furthermore, the increase in prices (both in the foreign and
domestic markets) of products which are not subject to the Price
Stability Agreement resulted in an improvement in average
contribution margin.

- Gross profit significantly increased to P$77 million in 2004
quarter and gross margin rose to 15.5% in 2004 quarter from 2.8%
in the prior-year quarter. With the purpose of optimizing
marketing margins, priority was given to products and
distribution channels with higher contribution. This strategy
allowed to absorb the 21.4% increase in the average cost of
processed crude oil (P$97.4 per barrel in 2004 quarter and
P$80.2 per barrel in 2003 quarter).

- Net sales for refinery products increased to P$497 million or
37.3% in 2004 quarter, boosted by significant price increases
and the incorporation of oil brokerage operations in the period
under review.

Sales average prices increased about 39% in 2004 quarter
compared to 2003 quarter. In this respect, the price of benzene,
paraffins, heavy distillates, diesel oil, gasoline, asphalts,
reformer plant byproducts, aromatics and medium distillates
increased 142%, 58%, 45%, 30%, 20%, 17%, 12%, 10% and 10%,
respectively, mainly as a result of the significant rise in
crude oil international prices.

Capitalizing on the competitive advantages derived from the
integration of its upstream and downstream operations and the
complementation with the activities performed by EG3, during
2004 quarter priority was given to the refining of a higher
volume of crude oil produced. This has helped move up the
business value chain and mitigate the distortive effects of the
export tax regime. Accordingly, in 2004 quarter crude oil volume
processed at the refinery increased 13.2% to 36,400 barrels per
day.

Sales volumes in 2004 quarter fell 2% versus 2003 quarter, due
to a 6% drop in domestic sales, partially offset by an increase
in exports, mainly attributable to increased cracking feedstock
sales. As regards domestic sales, the 2003 quarter reflects
specific resale operations (mainly diesel oil) for a volume of
57 thousand cubic meters.

Diesel oil sales volumes moved down 9.4% to 232 thousand cubic
meters in 2004 quarter, with a 15% decline in the domestic
market, partially offset by an increase in exports. Excluding
the 2003 quarter resale exports mentioned above, 2004 quarter
sales increased 16.6% boosted by higher sales to oil companies,
especially EG3. The new commercial mix, along with the growth of
the diesel oil domestic market, resulted in a decrease in the
market share to 3.4% in 2004 quarter from 5.1% in 2003 quarter.
Gasoline sales volumes rose 23.2% to 45 thousand cubic meters in
the domestic market in 2004 quarter, boosted by increased sales
to oil companies operating in Argentina, especially to EG3. The
Company's market share was 3.1% in both quarters.

Asphalts sales volumes grew 14.5% in 2004 quarter and the market
share moved up to 25.8% in 2004 quarter from 24.7% in 2003
quarter. Domestic market sales increased 56% due to a rise in
road construction which resulted in reduced exports, especially
to Paraguay and Bolivia.

Sales volumes for heavy distillates increased 23.0% in 2004
quarter as a result of higher cracking feedstock sales in the
export market, particularly Brazil.

Sales volumes for the reformer plant byproducts fell 26.8% in
2004 quarter, mainly due to lower LPG exports. Aromatics sales
volumes declined 11.1% while paraffins sales volumes fell 20.7%,
primarily due to lower exports of paraffin solvents.

Petrochemicals

- Regarding the international context, in 2004 quarter the
styrenics business was characterized by high international
prices both of raw materials and finished products. In this
respect, styrene and polystyrene prices increased approximately
80% and 67% in 2004 quarter compared to 2003 quarter. Though the
price of benzene increased 114% in 2004 quarter compared to 2003
quarter, the spread for styrene and polystyrene increased 86%
and 37%, respectively.

Regarding the fertilizers business, urea prices rose 44%, from
an average of US$155 per ton in 2003 quarter to US$223 per ton
in 2004 quarter as a result of an increased demand.

- Operating income for 2004 quarter rose to P$95 million or
111%, due mainly to the increase in gross profit and the
recognition of tax benefits for Innova operations.

- In Argentina, styrenics sales increased to P$225 million or
76% in 2004 quarter primarily due to the rise in prices and to
ethylbenzene sales to Innova within the context of business
complementation broadened by the start-up of the San Lorenzo
ethylene plant.

Average sales prices were 58% higher in 2004 quarter, with 94%,
64% and 32% increases in the styrene, polystyrene and rubber
lines of business, respectively.

Styrenics sales volumes totaled 54.5 thousand tons in 2004
quarter, 11% higher compared to 2003 quarter, mainly as a result
of higher ethylbenzene export volumes to Innova.

Reflecting the Argentine market recovery, changes were adopted
in the sales channels prioritizing positioning in the domestic
market over exports.

Styrene sales volumes in 2004 quarter remained in line with
volumes recorded in 2003 quarter, with a 24% rise in domestic
sales and a 30% decline in exports, particularly to Chile and
Uruguay. Polystyrene and Bops sales volumes in 2004 quarter were
3% lower compared to 2003 quarter. In 2004 quarter domestic
sales volumes remained in line with volumes for 2003 quarter,
while exports fell 6%, mainly to Chile and Uruguay (polystyrene)
and the United States and Europe (bioriented polystyrene).

Synthetic rubber sales volumes in 2004 quarter were in line with
2003 quarter volumes, with a change in the sales mix. Domestic
sales grew an average of 11%, due to an increased demand for
products derived from substitution of imported manufactured
products. Exports were 9% lower compared to 2003 quarter, mainly
to Brazil, Chile and Peru.

Innova sales in Brazil increased to P$253 million or 81.4% in
2004 quarter, mainly due to higher sales prices as a result of
the increase in international prices. In such respect, styrene
and polystyrene prices increased 96% and 78%, respectively, in
2004 quarter.

Sales volumes remained unchanged. The 2004 quarter sales
strategy was focused on the domestic market which offered higher
margins.

Fertilizers sales in Argentina increased to P$159 million or
56.3% in 2004 quarter, as a consequence of the combined effect
of (i) a 31% growth in sales volumes as a result of an increased
demand for nutrient mixes and (ii) the 21% price increase in
line with the international reference price.

- Gross profit rose to P$117 million or 33% in 2004 quarter.
Gross margin on sales fell to 19.3% in 2004 quarter from 23.9%
in 2003 quarter, reflecting the impact of the increase in
international prices, mainly benzene.

As regards the styrenics business in Argentina, gross profit
increased to P$45 million or 28.6% in 2004 quarter. Gross margin
on sales decreased to 20% in 2004 quarter down from 27.3% in
2003 quarter, mainly as a result of the impact of the increase
in the price of benzene and higher fixed production costs due to
the incorporation of San Lorenzo Ethylene Plant.

Regarding styrenics in Brazil, gross profit rose to P$39 million
or 30% in 2004 quarter. Gross margin on sales fell to 15.3% in
2004 quarter from 21.4% in 2003 quarter as a consequence of the
increase in raw materials, especially benzene.

As regards fertilizers in Argentina, gross profit increased to
P$33 million or 43.5% in 2004 quarter. Gross margin decreased to
20.8% in 2004 quarter from 22.5% in 2003 quarter. The rise in
gross profit was attributable to significant sales volumes and
improved prices, while the decrease in gross margin reflects
higher costs of imported products for resale, raw material, and
the increase in the gas rate.

- Administrative and selling expenses totaled P$36 million in
2004 quarter and P$29 million in the prior-year quarter. This
increase was attributable, among other things, to higher freight
costs for ethylbenzene exports, higher freight and logistics
expenses in the fertilizers business and, to a lesser extent,
increased labor costs and the appreciation of the Real against
the US dollar in Brazil which had an impact on fixed expenses in
2004 quarter compared to 2003 quarter.

- Other operating income (expense), net recorded a P$14 million
gain in 2004 quarter compared to a P$14 million loss in 2003
quarter. The 2004 quarter gain is attributable to the collection
of tax benefits granted by the Rio Grande do Sul State, Brazil,
to companies settled in such state. The 2003 quarter loss is
mainly due to the impact of provisions for environmental
remediation.

Hydrocarbon Marketing and Transportation

Breakdown of operating income for Affiliates under Joint Control
included in the table above in relation to the proportional
consolidation of CIESA is as follows:

- As from the first quarter of 2004, allocation of product sales
among business units was subject to a series of changes. As a
result, the Hydrocarbon Marketing and Transportation business
unit sells the gas produced in Argentina by the Company and the
liquids obtained from gas processing, which products are
transferred from the Oil and Gas Exploration and Production
business segment at market prices. In addition, the business
segment's operations include gas and LPG brokerage services. Oil
brokerage operations are commercialized by the Refining business
segment.

Sales revenues significantly increased to P$96 million in 2004
quarter, due to the marketing changes mentioned above. As a
consequence, gross profit increased P$3 million in 2004 quarter
compared to 2003 quarter.

In 2004 quarter, sales revenues for gas and liquids produced by
the Company were P$42 million and P$47 million, respectively.
Sales volumes for the gas produced by the Company in Argentina
totaled 181.8 million cubic feet per day, and liquids sales
volumes totaled 61.8 thousand tons.

Gas and LPG brokerage services accounted for sales revenues of
P$7 million and P$31 million in 2004 and 2003 quarters,
respectively.

- In 2004 and 2003 quarters, operating income was P$52 million
and P$45 million, respectively. Operating results reflect a P$45
million gain in both quarters, attributable to the proportional
consolidation of CIESA. Excluding such effects, operating income
totaled P$7 million in 2004 quarter, while no income was
recorded in 2003 quarter.

- Other operating income (expense), net totaled P$8 million and
P$3 million gains in 2004 and 2003 quarters, respectively. In
2003 quarter, income derived from advisory services provided to
TGS's technical operator. As from July 2004, within the
framework of the Agreement entered into with Enron, such
function was assigned to Petrobras Energia.

Electricity

Breakdown of operating income for Affiliates under Joint Control
included in the table above in relation to the proportional
consolidation of Distrilec is as follows:

Net sales of electricity generation increased to P$64 million or
14.3% in 2004 quarter, mainly boosted by a 46.9% improvement in
generation prices, partially offset by a 23.5% decline in energy
sales as a result of major maintenance works carried out at
Genelba Power Plant during 2004 quarter. The Company's
competitive advantages resulting from being an integrated energy
Company and from the joint operation of thermal and
hydroelectric generation plants allowed it to capitalize on
market opportunities and significantly minimize the plant
unavailability during the major maintenance works mentioned
above.

The increase in energy prices was primarily attributable to:

(i) higher demand for energy within a context of lower water
flow contribution at the different basins and gas supply
restrictions, which resulted in energy deliveries by less
efficient machines

(ii) the passing through of increased gas costs to sales prices
as a result of the path of prices implemented during 2004
quarter, and

(iii) higher compensation for guaranteed supply to the
electricity market, since the Secretariat of Energy guarantees a
price in excess of market price for guaranteed availability of
generation companies.

Net sales attributable to Genelba Power Plant increased to P$50
million or 4.2% in 2004 quarter. The significant improvement in
generation prices allowed to reverse the effects of scheduled
maintenance works which resulted in a 29.5% decline in energy
sales to 969 GWh in 2004 quarter down from 1,374 GWh in the
comparable quarter of 2003. Accordingly, both Genelba plant
factor and availability factor fell to 60.3% from 91.2% and to
65.7% from 93.1%, respectively.  The average price of energy
delivered increased to P$51.7 per MWh or 46% in 2004 quarter
from P$35.4 per MWh in 2003 quarter. Payment of additional
compensation for guaranteed supply to the electricity market
reflected increased sales of P$8 million and P$4 million in 2004
and 2003 quarters, respectively.

Net sales attributable to Pichi Picun Leufu Hydroelectric
Complex rose to P$13 million or 62.5% in 2004 quarter, due to
the combined effect of a significant improvement in sales prices
and higher generation volumes. The average sales price increased
to P$46.7 per MWh or 47.3% in 2004 quarter from P$31.7 per MWh
in 2003 quarter, due to the market reasons mentioned above and
the implementation of a dynamic and flexible policy in terms of
the mix of spot and futures sales. During 2004 quarter, energy
delivered rose to 279 GWh or 9% from 256 GWh in 2003 quarter,
mainly due to the use of water stored in the upper reservoirs of
the Comahue Basin's power plants so as to substitute thermal
supply which was not available due to fuel supply problems.

- Gross profit for the generation business increased to P$27
million or 50% in 2004 quarter, mainly driven by improved prices
in the wholesale electricity market.

- Other operating income (expense), net is mainly attributable
to income from advisory services to Edesur S.A.'s technical
operator which totaled P$1 million in 2004 quarter and P$7
million in 2003 quarter.

Outlook

A new year starts for Petrobras Energia offering great prospects
on the horizon as a result of 2004 efforts and achievements.
Such horizon is also supported by external factors - such as
high commodities prices in the international market - and by a
more stable domestic scenario in economic terms and better
prices for energy products. But, above all, a renewed and
strengthened Petrobras Energia appears on the horizon.

The fact is that the Company has integrated four companies that
will operate as one, thus centralizing its hydrocarbon
production, refining and marketing activities. This aimed at
securing a single management and an extended synergy among
businesses. At the conclusion of the corporate reorganization
process involving Petrobras Group companies in Argentina,
Petrobras Energia will emerge with fully optimized competitive
capabilities.

Efforts continue to optimize the portfolio by integrating new
projects with excellent long term growth and profitability
expectations.

Petrobras Energia plans to make significant investments in oil
and gas exploration and production to achieve its production
growth and reserve replacement targets, mainly in Argentina,
Venezuela and Ecuador. Investments will be directed to areas
where the Company is already operating and to new on-shore and
off-shore opportunities, with increased investments in
exploration, pursuing more aggressive growth.

In Argentina, as a result of the addition of new assets
belonging to Petrobras' companies and incorporated into
Petrobras Energia, reserves and production prospects for the
year 2005 significantly increased.

As regards exploration activities, the offshore areas along the
maritime coasts of Argentina are worth mentioning as the place
where Petrobras Energia will leverage Petrobras' experience as a
world leader in deep-water exploration and production
activities.

In Venezuela, efforts will focus on drilling and workover of oil
producing wells, mainly in Oritupano Leona and La Concepcion
operations, and maintenance of existing facilities.

In Ecuador, works relating to the start up of the development
project for Block 31 will be performed, with first production
expected in the first half of 2006.

In Peru, as a result of the enactment of the "Law for the
Promotion of Investment in the Exploitation of Hydrocarbon
Resources and Marginal Reserves Nationwide", a more favorable
context is foreseen for the development of hydrocarbon reserves
at Lote X.

As regards the Refining business, current trends are expected to
continue, with the diesel oil and gasoline markets reflecting a
relative recovery compared to previous year, mainly boosted by
the growth of gasolines with higher octane ratings. This trend
reverses the performance in recent years. The refinery will
continue operating at close to maximum capacity.

In the Petrochemicals business segment, a growth scenario is
foreseen with increased international margins on styrene and
polystyrene. Domestic demand for all the business products is
expected to grow. The Brazilian market might see a demand
shrinkage during the first months of the year due to scheduled
shutdown of cooling equipment manufacturing plants and a certain
economic deceleration due to interest rate rise expectations and
the consequent decline in credit facilities. In the fertilizers
business, forecasts suggest that urea international prices will
track higher than the historical average. As a result, the
business will continue to add significant value to the Company's
natural gas.

Increases in gas prices are foreseen for the year 2005, driven
by the Decree which provides a path of prices for natural gas
and by an increased demand for hydrocarbons.

In the Electricity segment, a rise in energy prices is foreseen
as a result of the passing through to prices of higher gas
costs. Moreover, the demand for energy is expected to continue
growing, though at a slower pace.

As regards utility companies, significant steps are expected to
be taken during 2005 to restore the economic and financial
balance of such companies. In the light of the letters of intent
recently subscribed by the UNIREN with several companies in the
energy sector, further progress is expected in the renegotiation
of utility contracts. In addition, and as a key piece for
utility companies to be commercially viable, continued progress
is expected toward the restructuring of CIESA and Transener's
financial debt.


PROMOTORA DE COMUNICACIONES: Moves to Restructure Debt
------------------------------------------------------
Court No. 1 of Buenos Aires' civil and commercial tribunal is
currently reviewing the merits of a reorganization petition
filed by Promotora de Comunicaciones Colonia S.A. Reorganization
will allow the Company to avoid bankruptcy by negotiating a
settlement with its creditors.
   
La Nacion recalls that the Company filed the petition following
cessation of debt payments on June 1 last year. The Company has
assets of US$305,590.83 and liabilities totaling
US$1,132,124.42.

The city's Clerk No. 2 assists the court in resolving this case.

CONTACT: Promotora de Comunicaciones Colonia SA
         Avenida Santa Fe 1970
         Buenos Aires


TRANSENER: Government Schedules Public Hearing for March 18
-----------------------------------------------------------
The Argentine Economy and Planning ministries will hold a public
hearing on March 18 to discuss proposed interim contracts with
power transporter Transener and its Buenos Aires subsidiary
Transba, reports Dow Jones Newswires.

The meeting will be held at 1200 GMT in the city of Olavarria in
Buenos Aires province.

Transener and Transba, which handle all the high-voltage
electricity in Argentina, signed transitional agreements with
the government earlier this month, completing an intermediate
step on the way to new, long-term contracts.

Reports have it that Transener agreed to a rate increase of 31%
and investments of ARS32 million ($1=ARS2.9175) in upgrades for
this year, with industrial users taking on the brunt of the rate
hikes while residential clients remain unaffected.

Transener recently launched an offer to restructure US$520
million in debt. The Company, which defaulted on its obligations
in 2002 amid Argentina's economic crisis, is offering to swap
defaulted obligations for new bonds, cash and equity.

Argentine oil and gas Company Petrobras Energia (PECO.BA) and
local investment group Dolphin Fund Management hold equal stakes
in Citelec, Transener's holding Company.

CONTACT:  Paseo Colon 728 6th Floor
          (1063) Buenos Aires
          Republica Argentina
          Tel: (54-11) 4342-6925
          Fax: (54-11) 4342-7147
          Email: info-trans@transx.com.ar
          Web site: http://www.transener.com.ar



===============
B A R B A D O S
===============

SUNBEACH COMMUNICATION: Belle Quits as Non-Executive Director
-------------------------------------------------------------
The Board of Sunbeach Communications Inc., Barbados' largest
dial-up Internet Service Provider, has announced that Mr.
Glendon Stevenson Belle has resigned as a Non-Executive director
of the Company

The board revealed Mr. Harold Morley (60) has been appointed as
a Non-Executive director.

According to information from the Barbados Daily Nation, Belle
was general manager of City of Bridgetown Co-operative Credit
Union (COB), the second largest credit union in the island whose
own members invested $1 million in Sunbeach when it went public
in 2003.

COB was also to have been a major partner with Sunbeach in the
launch of its proposed cellular service.

Belle cited as one of the reasons for his resignation the
failure of managing director Michael Wakley and finance director
John Moir to follow through on the commitment given to
shareholders to resign from the board if they failed to secure
the US$52 million required to get the cellular service off the
ground.

Belle said his decision, which was supported by the credit union
was a "matter of principle" and "necessary".

On September 28, Sunbeach shares were suspended from trading by
the Barbados Stock Exchange and on the Alternative Investment
Market of the London Stock Exchange because of serious doubts
raised by its auditors about the Company's ability to continue
as a going concern.

The last unaudited financial published by the Company in January
showed that Sunbeach registered a loss of $817,069 even though
its Internet service performed well.

Sunbeach Communications provides dial-up Internet services to
businesses and individuals in Barbados and the Eastern
Caribbean. The Company is expanding its services to include
cellular phone service.

CONTACT:  SUNBEACH COMMUNICATIONS, INC.
          San Remo Belmont Road
          St. Michael, Barbados
          Phone: 246-430-1569
          Fax: 246-228-6330



===========
B R A Z I L
===========

EMBRATEL: Moves Ahead to Implement Capital Increase Plan
--------------------------------------------------------
Embratel Participacoes S.A. ("Embrapar"), in compliance with the
provisions of paragraph 4 of article 157 of Law #6.404/76 and to
CVM Instruction #358/02, communicates to its shareholders and to
the public in general that the Brazilian Securities and Exchange
Commission (CVM), through Deliberation #479, has authorized
Embrapar's management to resume its capital increase process,
which was temporarily suspended.

As a result of this decision, the Company will proceed with the
capital increase. The Company will now submit to its Board of
Directors a revised schedule for the offering, which, when
approved, will be followed by a new notice to shareholders and
an amended Form F-3 to be filed with the SEC and its translation
simultaneously disclosed to the Brazilian market.

CONTACT: Embratel Participacoes S.A.
         Rua Regenta Feijo
         166 sala 1687-B Centro
         Rio de Janeiro, 20060-060
         Brazil
         Phone: 5521-519-6474
         Website: http://www.embratel.net.br


TELEMAR: Prepares Unit for U.S. SEC Registration
------------------------------------------------
Tele Norte Leste Participacoes S.A. (NYSE: TNE), released
additional information regarding the spin-off of its subsidiary
Contax Participacoes (Contax), which was approved on December
29, 2004. TNE announced that, in addition to preparations for
the trading of its shares at the Bolsa de Valores de Sao Paulo
(Bovespa), Contax is also preparing the necessary information to
register the preferred shares with the United States Securities
and Exchange Commission (SEC), in order to initiate an ADR
Program.

Once the registration processes are completed in each country,
Contax shares will be distributed to shareholders of TNE in
Brazil and the Contax ADRs made available to holders of the TNE
ADR. Contax shares will then start trade at the Bovespa and its
ADRs will start trade at the over-the-counter market in the
United States.

At a date closer to the conclusion of the aforementioned
registration process, TNE and CONTAX will issue a new press
release indicating: the date on which Contax shares will be
transferred to TNE shareholders and ADR holders; the date such
securities will start trading at the Bovespa and the U.S.
market; as well as the effective "ex-dates" for TNE shares and
ADRs.

CONTACT: TNE - Investor Relations
         Mr. Roberto Terziani
         E-mail: invest@telemar.com.br
         Phone: 55 21 3131 1208
        
         Mr. Carlos Lacerda
         E-mail: carlosl@telemar.com.br
         Phone: 55 21 3131 1314
         Fax: 55 21 3131 1155

         The Global Consulting Group
         Mr. Kevin Kirkeby
         E-mail: kkirkeby@hfgcg.com
         Phone: 1-646-284-9416
         Fax: 1-646-284-9494


UNIBANCO: Reports BRL375 Million Net Income in 4Q04
---------------------------------------------------
Unibanco - Uniao de Bancos Brasileiros S.A. and Unibanco
Holdings S.A. released Thursday consolidated financial results
under Brazilian GAAP for the year 2004.

Profitability

- For 4Q04, net income reached R$375 million, posting a growth
of 14.7% Q-o-Q. In 2004 Unibanco reached a net income of R$1,283
million, reflecting a 22.0% growth compared to the same period
of last year. Stockholders' equity in December 2004 stood at
R$8,106 million, representing a 13.3% increase when compared to
December 2003. Annualized return on average equity (ROAE) stood
higher than 20% in the quarter.

Assets, Funding and Capital Adequacy

- Unibanco's consolidated total assets reached R$79,350 million
on December 31, 2004, representing an increase of 14.0% when
compared to December 31, 2003. Of this total, R$31,796 million
were loans, R$16,604 million were marketable securities, issued
primarily by the federal government and derivative financial
instruments, and R$14,377 million were interbank investments.

- In December 2004, the Company began to include in its loan
portfolio all the installments of credit card sale from Unicard
and Fininvest. Consolidated loan portfolio, including other
credits, stood at R$31,796 million in December 2004, an increase
of 7.0% and 14.7% Q-o-Q and Y-o-Y, respectively. Loans to
individuals were up 23.2% Y-o-Y and 9.6% Q-o-Q. Total corporate
loan portfolio posted 5.5% growth in the quarter and 10.3%
growth in the year. For comparison purposes the following
adjustments were performed: in the portfolio of September, 2004
the installment credits were included and the portfolio of
Credicard was excluded. In December 2003, in addition to the
adjustments of September, the HiperCard's portfolio (Company
acquired in March, 2004) was included in the balance.

- At the end of December 2004, the balance for the consolidated
allowance for loan losses reached R$1,669 million, representing
5.2% of the portfolio. This allowance was composed of:

1. R$573 million according to Resolution 2682, related to
overdue credits;

2. R$745 million according to risk parameters of Resolution
2682, related to falling due credits;

3. R$351 million based on more conservative percentages than
those required by the Regulatory Authority.

- As of December 2004, the balance of loans classified as AA
represented 39.9% of total, while D-H loan portfolio represented
9.0% of total.

- As of December 31, 2004, Unibanco's overall funding reached
R$95,636 million, including R$32,979 million in mutual funds and
assets under management. Core deposits, including Superpoupe - a
time deposit designed for retail clients, with a larger spread
than that of regular time deposits - presented in December, 2004
a 25.0% growth Y-o-Y. The growth highlights the initiatives of
the bank towards improving its funding mix in 2004.

- The BIS ratio stood at 16.3%, well above the minimum required
by the Brazilian Central Bank of 11%.

- The fixed asset ratio, in December, 2004, stood at 39.5%, with
an impressive improvement due to incorporated companies goodwill
write-off, mainly Banco Bandeirantes.

Results Highlights

- The financial margin before provision for loan losses,
adjusted by the net impact on investments abroad, reached
R$6,417 million in 2004, an increase of 6.6% compared to
previous year. The financial margin before provision, by the
same criteria, stood at R$1,766 million in the quarter, 5.4%
above the previous quarter.

- Financial margin increased from 8.7% in 2003 to 9.0% in 2004.

- Total fees reached R$851 million in 4Q04 and amounted to
R$3,241 million in the year, an increase of 14.0% Y-o-Y. The
ratio of fee revenue over administrative and personnel expenses,
which measures recurrent revenues and expenses, increased from
62.1% in 2003 to 64.1% in 2004.

- In 2004, personnel and administrative expenses were impacted
by the acquisitions of the period and by the efficiency
improvement actions, which include the discontinuation of
Banco1.net and the incorporation of its activities by the
retail, the conversion of instore branches into Fininvest stores
and the redesign of the overseas platform, besides other
initiatives to outsource non-core activities.

- Total personnel and administrative expenses presented an
increase of 4.4% Q-o-Q and 10.5% YoY-Y.

- In 4Q04 Unibanco sold its stakes in credit card issuer
Credicard and in credit card processor Orbitall. The results of
this sale were entirely absorbed by the amortization of goodwill
of incorporated companies and by non-recurring operating
provisions for restructuring, credits and fiscal contingencies.
The price of the sale was equal to a multiple of 17.1 times the
combined earnings. The transaction was settled in cash, yielding
cash inflow of R$1.7 billion.

Net Income and Stockholders' Equity

Unibanco

In 4Q04, Unibanco reached R$375 million net income, posting a
14.7% growth compared to 3Q04. In 2004, Unibanco posted a
R$1,283 million net income, 22.0% above the previous year.
Stockholders' equity, in December 2004, stood at R$8,106
million, representing a 13.3% increase in the year. Annualized
return on average equity (ROAE) exceeded 20% in 4Q04.

Unibanco Holdings

Unibanco Holdings' net income for 2004 reached R$708 million,
corresponding to R$0.85 per share. Stockholders' equity at
period-end reached R$4,819 million and ROAE stood at 15.6%,
affected by tax provisions (PIS and COFINS) over revenues of
interest on capital stock. Book value per share reached R$5.81
at period-end.

The sale of Credicard and Orbitall

In 4Q04 Unibanco sold its equity stakes in credit card issuer
Credicard and in credit card processor Orbitall. The price of
the sale was equivalent to 17.1 times the combined earnings of
the companies and 10.4 times the combined stockholders' equity
of the companies. The transaction was settled in cash, yielding
cash inflow of R$1.7 billion up to the end of December 2004.

The 33.3% equity stake in Credicard was acquired by the other
partners in the Company, Itau and Citibank, which now hold each
a 50% ownership. In a Company announcement dated February 1,
2005, it was announced by the shareholders that the credit card
base of Credicard will be split between the partners and that
the joint management of the Company will come to an end in 2005.
In the credit card segment, through its wholly owned
subsidiaries, Unibanco has 8.0 million cards, in addition to 9.5  
million private label cards. The 33.3% equity stake in Orbitall
was acquired by Itau. Unibanco was not a client of Orbitall,
once it is self sufficient in the processing of its credit cards
base and private label cards.

The results of this sale were entirely absorbed by the
amortization of goodwill of incorporated companies and by non-
recurring operating provisions for restructuring, credits and
fiscal contingencies, as shown in the Financial Statements, in
the Extraordinary Items line.

In the 4Q04, Credicard and Orbitall contributed with R$19
million to Unibanco's net income. Unibanco maintained its share
in Redecard that contributed with R$32 million to the result of
the quarter.

Assets

Unibanco's consolidated total assets reached R$79,350 million on
December 31, 2004, an increase of 14.0% when compared to
December 31, 2003. The drop of 5.6% in the quarter is mostly
explained by the fact that Unibanco acted as dealer upon request
of the Central Bank on September 30, 2004, trading an amount of
R$4,0 billion. The same occurred on December 31, but to a lesser
extent.

Marketable Securities

Trading securities and Securities Available for Sale Trading
securities are acquired with the purpose of being actively and
frequently traded. Unrealized gains and losses due to market
value adjustments are recognized in the income statement.
Securities available for sale can be traded as a result of
interest rate fluctuations, changes in payment conditions or
other factors. Securities available for sale are adjusted at
market value, recorded in a separate stockholders' equity
account.

Securities Held to Maturity

Unibanco classifies as held to maturity those securities it has
the intention and the financial capability to keep in the
portfolio until maturity. They are accounted for at their
acquisition cost plus accrued interests. The market value of
such securities amounted to R$5,072 million on December 31,
2004. The weighted average spread of this portfolio, funded by
third parties, was 5.29% per annum as of December 2004.

Loan Portfolio

Total loans increased 13.9% in the year and 3.7% in the quarter.
In December, 2004, the Company began to include in its loan
portfolio all the installments of credit card sales (installment
credit)1. In addition, the loan portfolio as of December 2004
already reflects the Credicard's sale.

For comparison purposes, the following adjustments were
performed: in the portfolio of September 2004, the installment
credits were included and the portfolio of Credicard was
excluded. In December 2003, in addition to the same adjustments
of September, the HiperCard's portfolio (Company acquired in
March, 2004) was included in the balance. The following pro-
forma analysis reflects the above-mentioned adjustments.

Loans to retail segment posted 28.6% growth Y-o-Y and 10.9% in
the quarter. The highlights were the growth in the HiperCard
portfolio of 23.0% in the quarter, the growth in the SME
portfolio of 17.9% in the quarter and 52.7% in the year and the
growth in the consumer finance companies of 13.1% in the quarter
and 32.1% in the year. Loans to individuals were up 23.2% Y-o-Y
and 9.6% Q-o-Q.

Total corporate loan portfolio posted 5.5% growth in the quarter
and 10.3% growth in the year. Even considering the Dollar
depreciation, of 7.1%, large corporate loans increased 2.4% in
the quarter. The balance of US dollar indexed corporate loans
portfolio was kept fairly stable, from R$5,391 million (US$1,886
million) as of September 2004 to R$5,344 million (US$2,013
million) as of December 2004. In this way, total loan portfolio
reached R$31,796 million as of December 2004, posting 7.0% and
14.7% growth in the last three and twelve months, respectively.

Allowance and Provisions for Loan Losses

As of December 2004, the balance for the consolidated allowance
for loan losses reached R$1,669 million, representing 5.2% of
the portfolio, composed of:

- R$573 million according to Resolution 2682, related to overdue
credits;

- R$745 million according to risk parameters of Resolution 2682,
related to falling due credits;

- R$351 million based on more conservative percentages than
those required by the Regulatory Authority.

With the sale of Credicard and the consequent loan portfolio
elimination, the balance for the consolidated allowance for loan
losses dropped by R$119 million.

As of December 2004, the balance of loans classified as AA
represented 39.9% of total, while D-H loan portfolio represented
9.0% of total. The allowance for loan losses over the balance of
loans with principal or interest past due for 60 days or longer
(non-accrual portfolio) reached 131.2%, versus 115.1% in the
previous year. As of December 2004, the ratio of non-accrual
portfolio over the total loan portfolio reached 4.0%, posting an
evolution both in the quarter and in 12-month period.

Funding

As of December 31, 2004, Unibanco's overall funding reached
R$95,636 million, including R$32,979 million in mutual funds and
assets under management. Funds and portfolios managed by UAM -
Unibanco Asset Management reached R$32,979 million by the end of
December 2004, up 22.4% when compared to December 2003.

Core deposits, including Superpoupe - a time deposit designed
for retail clients, with a larger spread than that of regular
time deposits - presented in December 2004 a 25.0% growth Y-o-Y.
The growth highlights the initiatives of the bank towards
improving its funding mix in 2004.

In 4Q04 funding in domestic currency reached R$49,909 million,
with a 19.4% growth Y-o-Y. Funding in foreign currency posted a
4.8% drop in the last twelve months, amounting to R$12,748
million at the end of December 2004, mainly due to the Real
appreciation during the period.

In December 2004, Unibanco issued US$150 million in subordinated
debt with 5 year-term, at 6-month Libor + 2.0%. Banca Nazionale
Del Lavoro (BNL) is the creditor and the issue is part of a
credit line negotiated with BNL by the time of the acquisition
of BNL's Brazilian subsidiary.

In the same month, Unibanco launched, through its Grand Cayman
subsidiary, a Reais denominated issue in the amount equivalent
to US$75 million, with an 18-month term and half-yearly interest
payments, maturing on June 14, 2006. The operation offers a
coupon in Reais at a fixed rate of 17.9% a year. Unibanco acted
as the Lead Manager and Sole Book Runner. That was the first
operation in Reais, at a fixed rate, carried out by Unibanco.

In February 2005, the bank launched a Reais denominated issue,
in the amount of US$125 million, with a 5-year term and half-
yearly interest payments. The issue offers a coupon in Reais,
pegged to the IGPM Inflation Index plus 8.9% per year. Yield was
priced at 26 bps below the interpolated sovereign yield curve.
That was the first issue of a Brazilian bank tied to an
inflation index. Unibanco's goal was to create an alternative
and differentiated source of funding, as well as to offer to its
clients in the country competitive funding pegged to the IGPM.

Capital Adequacy and Fixed Assets Ratios

The BIS ratio stood at 16.3%, above the minimum required by the
Brazilian Central Bank of 11%. The fixed asset ratio, in
December 2004, stood at 39.5%, with an impressive improvement
due to incorporated companies goodwill write-off, mainly Banco
Bandeirantes.

PERFORMANCE OVERVIEW

The Brazilian Economy

4Q04 was marked by the ongoing implementation of the monetary
policy adjustment initiated by the Central Bank in 3Q04, with
the Selic interest rate rising from 16.25% to 17.75% per year,
which reflects the monetary authority's greater concern with
current inflation. The inflation rate in the last quarter of the
year, as measured by the IPCA consumer price index, reached
2.0%, higher than the 3Q04 accrued total of 1.94%. The year's
total inflation, as per the IPCA, reached 7.6%, higher than the
defined target of 5.5%, but lower than the 8.0% ceiling of the
inflation target range. Additionally, after four years,
inflation receded within the limits defined by the inflation
target system.

Industrial output, according to the IBGE (Brazilian Institute of
Geography and Statistics), rose by 8.3% in 2004, Y-o-Y.
Industrial output dynamics have shown a gradual increase in the
contribution to growth among those sectors that are dependent on
the recovery of real income levels and a loss of steam among
those sectors that are more credit-sensitive.

Despite the appreciation of the real vis a vis the US dollar,
4Q04 exports resulted in monthly trade balance surpluses that
were still fairly high, although slightly below those of the
previous quarter. During this period, the trade balance was
positive by US$8.6 billion, raising Brazil's accrued 12-month
trade surplus from US$32.2 billion in September to US$33.7
billion at the end of 2004, once again, an all-time high.

Buoyant exports, increasing consolidation of the fiscal policy
and improvement of the indicators of both external and domestic
solvency, helped lower Brazil's perceived sovereign risk. By the
end of 4Q04, the Embi-Brazil indicator, at 383 basis points, was
17.8% lower than the figure at the end of the preceding quarter.

Nonetheless, the private sector's rate of foreign debt rollover
continued to be modest - pointing to a voluntary process of
corporate foreign debt reduction. The low rollover rate did not
impair the liquidity of the foreign exchange market, as the
commercial flow continued to be strong during this period. The
US dollar devalued by 7.1% vs. the real during 4Q04 and posted a
total devaluation of 8.1% vs. the end of 2003.

Ongoing fiscal austerity allowed the achievement of the fiscal
target of 4.5% of GDP in 2004, closing the year at 4.6% of GDP.
As in previous quarters, the significant results achieved by
public accounts have been enough to keep the debt/GDP ratio
trending down. At the end of December, this ratio stood at
51.8%, vs. 53.7% in September and 57.2% at the end of 2003.

Results

Net income in 4Q04 stood at R$375 million, up 14.7% when
compared to previous quarter. In 2004, Unibanco reached a net
income of R$1,283 million, up 22.0% when compared to the same
period of last year.

The financial margin before provision for loan losses, adjusted
by the net impact on investments abroad, reached R$6,417 million
in 2004, an increase of 6.6% compared to previous year. The
financial margin before provision, by the same criteria, stood
at R$1,766 million in the quarter, 5.4% above the previous
quarter. Total average assets, not including permanent assets,
were kept fairly stable in the quarter. Therefore, financial
margin increased from 8.8% in 3Q04 to 9.3% in 4Q04. In 2004,
financial margin was 9.0%, versus 8.7% in the previous year.

Investments abroad reached R$1,6 billion and R$2,0 billion at
the end of December 2004 and September 2004, respectively.
During the course of the year, investments abroad were reduced
by dividend payment.

Fees from Services Rendered

Total fees reached R$851 million in 4Q04 and amounted to R$3,241
million in the year, an increase of 14.0% Y-o-Y. Banking fees
reached R$445 million in 4Q04 and R$1,662 million in 2004,
representing an increase of 8.9% Y-o-Y. Fee revenues from the
credit card business reached R$248 million in 4Q04 and R$841
million in the year, growing 34.1% when compared to 2003. Fees
from asset management reached R$98 million and R$385 million in
4Q04 and in 2004, respectively, presenting a growth of 22.6% Y-
o-Y . Fee revenues over personnel and administrative expenses
(recurrent revenues and expenses) increased from 62.1% in 2003
to 64.1% in 2004.

Personnel and Administrative Expenses

In 2004, personnel and administrative expenses were impacted by
the acquisitions of the period and by the efficiency improvement
actions, which include the discontinuation of Banco1.net and the
incorporation of its activities by the retail, the conversion of
in-store branches into Fininvest stores and the redesign of the
overseas platform, besides other initiatives to outsource non-
core activities.

The growth in the Conglomerate's points of service, initiated in
the second half of 2003 including the acquisitions occurred in
the first half of 2004, resulted in the accretion of 1,400
employees to the commercial department of the bank. The internal
restructuring intensified in the second half of 2004 resulted in
a reduction of 217 employees when compared to December 2003. The
Group's workforce comprised a total of 27,408 professionals in
December 2004, versus the figure of 29,025 as of June 2004.

In 2004, personnel expenses changes are mostly explained by the
impact of the "Collective Wage Agreement" (R$126 million),
restructuring process of the Company (R$55 million), organic
growth of the branches sales force and the new Fininvest stores
(R$33 million), acquisitions of HiperCard, BNL, Creditec (R$41
million), and expenses related to Credicard and Orbitall (R$22
million).

In the quarter, personnel expenses changes were influenced most
by the "Collective Wage Agreement" of 8.5% in September 2004
R$22 million), severance expenses (R$11 million), and the
aggregate wage reduction (R$7 million) - a consequence of the
restructuring process, besides the expenses drop in Credicard
and Orbitall.

In 2004, other administrative expenses increased R$240 million
(8.6%) mainly because of the acquisitions of HiperCard, BNL,
Creditec and Tricard, which amounted to R$103 million,
readjustments of public utilities tariffs, rental and software
maintenance contracts, real estate rental (R$63 million),
mailing expenses, and marketing expenses (R$38 million), organic
growth related expenses (R$12 million), and increased expenses
related to the implementation of non-recurring projects (R$21
million).

In the 4Q04, the expenses presented a growth of R$40 million
(increase of 5.1%) versus 3Q04 due to the seasonal increase in
volumes and end-of-year events. The following items also
contributed to this growth: higher marketing expenses, cash and
documents transportation, expenses with projects implementation,
which deal with the outsourcing of documents processing.

Businesses Highlights

Retail

The Retail segment continued with the implementation of the new
organizational design, aiming to increase profitability and
efficiency, and to maintain its businesses growth. Retail
involves the following areas:

- Commercial bank transactions for individuals;
- Commercial bank transactions for companies with annual sales
up to R$150 million;
- Credit Cards;
- Consumer Finance; and
- Car and heavy vehicles financing.

Branches Network

Unibanco ended 2004 with 1,275 branches, in-store and corporate-
site branches. The highlight of the period was the balance of
R$1,625 million in the Superpoupe's portfolio, which registered
a growth of 57.8% Q-o-Q. "Superpoupe" is a time deposit
certificate, launched in May 2004, with lower funding costs than
a regular time deposit certificate.

The Consumer Companies

Unibanco's Consumer Companies are responsible for the credit
card and consumer finance segments. They are formed by Unicard,
Fininvest, PontoCred (a partnership established with Globex,
controlling Company of Ponto Frio department store chain),
LuizaCred (a partnership with Magazine Luiza department store
chain), HiperCard, Redecard (a partnership established with
Citibank, Itau and MasterCard), and by the partnerships with
Tricard and Sonae.

CREDIT CARD COMPANIES

Unicard

Unicard's credit card business had net earnings of R$36 million
in 4Q04, up 33.3% Q-QoQ, and had annualized ROAE of 53.3% in the
period. During the whole year of 2004, earnings reached R$126
million. The 2004 ROAE was 45.6%. Revenues, measured in terms of
volume of purchases and withdrawals made by the customers,
reached R$2,042 million in 4Q04, up 18.6% over 3Q04 and 32.9%
above 4Q03 figures. Loan portfolio reached R$1,694 million in
the quarter, 18.1% above the previous quarter and 23.4% above
2003. In December 2004, the number of cards issued stood at 4.8
million, up 9.1% when compared to December 2003.

HiperCard

HiperCard, the credit card business that started in the Bompreco
supermarket chain, and was acquired by Unibanco in March 2004,
had net earnings of R$52 million in 4Q04, up 44.4% Q-o-Q. ROAE
was 139.9% in the quarter. In December 2004, HiperCard's loan
portfolio stood at R$1,100 million. In December 2004, the
Company had around 70 thousand affiliated stores and 2.7 million
cards issued.

Redecard

Redecard equity income was R$32 million in 4Q04, posting a
growth of 39.1% when compared with 3Q04 (including Consorcio
Redecard revenues). The 2004 ROAE was 215.2%. Revenues amounted
to R$15.8 billion in 4Q04, 24.1% above 3Q04, and there were 236
million transactions during the last quarter of 2004.

CONSUMER FINANCE COMPANIES

Fininvest

Fininvest contributed with R$61 million equity income in 4Q04,
an increase of 35.6% Q-o-Q. Annualized ROAE was 52.0%. In 2004,
equity income reached R$197 million, up 23.9% Y-o-Y. The Company
ended 4Q04 with R$1,598 million in credit portfolio, a 13.1%
growth when compared with 3Q04 and 31.1% over the last 12
months. Revenues in the quarter reached R$1,379 million, a 19.8%
growth Q-o-Q and up 42.6% when compared with 4Q03. Fininvest
ended 2004 with 253 stores and over 11 thousand points-of-sale.
Over the year, 142 new stores were opened, of which 49 in the
last quarter, increasing the distribution network in the
Southeast region.

LuizaCred

LuizaCred, a Fininvest subsidiary, posted equity income of R$3
million in 4Q04, with annualized ROAE of 65.8% for the period.
In 2004, LuizaCred had earnings of R$24 million, 50.0% above the
previous year. Revenues reached R$303 million in 4Q04, a 60.3%
growth Q-o-Q and up 62.9% comparing with 4Q03. The Company ended
December 2004 with a 1.4 million-client base and R$469 million
in loan portfolio, an increase of 47.0% over the last 12 months.
The Company is present at 250 Magazine Luiza's points of sale,
including 48 Lojas Arno points of sale.

PontoCred

PontoCred posted net income of R$16 million in 4Q04, up 33.3% Q-
o-Q. Annualized ROAE in the period was 40.8%. Accumulated
earnings for 2004 was R$51 million, a 37.8% growth when compared
with 2003. At the end of December 2004, the balance of the loan
portfolio stood at R$917 million, an increase of 27.9% in 12
months. The total number of customers reached 3.6 million in
December 2004. PontoCred is present at 339 Ponto Frio's points
of sale.

Auto Financing

The auto financing business includes Unibanco Financeira,
Consorcio Rodobens, Consorcio Nacional Ford and Banco Dibens, a
partnership with Grupo Verdi, and offers cars, trucks and buses
financing. In 2004, auto finance business posted net managerial
income of R$45.3 million and ended the period with a R$3.7
billion loan portfolio, up 31.2% Y-o-Y.

Blockbuster

BWU Com. e Entretenimento Ltda., Blockbuster Video's master
franchisee in Brazil, opened 16 new stores in 2004, ending the
year with 130 stores, of which 120 are wholly-owned and 10 are
sub-franchisees. The Company posted gross revenues of R$160.2
million. The growth in revenues of comparable stores (which were
opened in 2003) was of 11.4%. The Company EBITDA reached R$21.4
million in 2004, which represents an increase of 20% over 2003
and income of R$7.8 million.

Unibanco Capitalizacao

The annuity business of Unibanco Capitalizacao ended 2004 with
revenues of R$454 million, up 15.8% Y-o-Y. In 4Q04, revenues
were up 20.8% when compared with 2003, reaching R$215 million.
Unibanco Capitalizacao's earnings reached R$40.5 million in 4Q04
and R$105.7 million in 2004. Of this amount, the annuity
business represented R$21,0 million in 4Q04 and R$70.2 million
in 2004.

Wholesale

In 4Q04, the Wholesale segment consolidated its relationship
strategy with clients, maintaining its differentiated service
and reducing its structure in about 25%, percentage equivalent
to a hundred employees. Clients started being served on a
regional level with access to new products such as derivatives
linked products. Unibanco also took part as a coordinator in the
most important capital markets transactions of the period.

In the next Shareholders' Meeting, it will be proposed the
election of Joao Dionisio Amoedo to its Board of Directors. The
executive functions of Joao Dionisio in the Wholesale will be
under the responsibility of Demosthenes Madureira de Pinho Neto.
Mr. Pinho Neto will lead both the Wholesale and the Wealth
Management areas. The Proprietary Trading will be independently
managed from the Wholesale and Wealth Management areas.

The period's highlights include the following:

Foreign Trade Finance

On December 31st, 2004, Unibanco had a US$1.6 billion balance in
foreign trade finance transactions. This amount resulted from
import, export and international financing warranties.

Syndicated Loans

Unibanco led a FGTS on lending transaction for Copasa -
Companhia de Saneamento do Estado de Minas Gerais, with an
amount of R$256.8 million. The bank also concluded a transaction
with Votorantim Metais Ltda., NEXI Insured Syndicated Loan
Facility, which amounted to US$109 million. That funding was
originated from a bank consortium led by The Bank of Tokyo
Mitsubishi in 4Q04.

BNDES

Unibanco was the first on the BNDES.exim ranking with an amount
of R$857 million disbursed in 2004. As a financial agent for the
BNDES (Brazilian National Social and Economic Development Bank),
Unibanco disbursed R$1.6 billion and reached third place in the
general BNDES ranking.

Financial advisory

- to CCR, for the total acquisition of Viaoeste S/A (a road
concession) for R$726 million.

- to Cemig, in the capital increase of up 40% (R$144 million) of
Gasmig S/A, originally 100% controlled by Cemig and Gaspetro
S/A.

- to Grupo Rede, on the sale of 100% of the capital of Rosal
Energia S/A, which owns UHE Rosal, to Cemig for R$134 million.

Capital Markets

- Unibanco was the Leading Coordinator and joint bookrunner of
the public offering of DASA - Diagnosticos da America S.A., the
largest private diagnostic medicine Company and the first one in
the field of healthcare to be traded on the stock market in
Latin America. The transaction amounted to R$437 million.

- The bank also led the 2nd Issue of Promissory Notes, amounting
to R$ 200 million, of the Securities Program structured for the
basic sanitation Company of the state of Sao Paulo (Companhia de
Saneamento Basico do Estado de Sao Paulo - SABESP) and of the
1st tranche of this program, amounting to R$ 600 million.

Insurance and Private Pension Plans

The insurance and private pension plans businesses, including
extended warranty, posted net earnings of R$8 million in 4Q04.
In line with the conglomerate's decision to accelerate
amortization of goodwill of totally incorporated companies, the
insurance Company amortized the gross amount of R$103 million in
4Q04. This amount represents the goodwill amortization of Trevo,
the insurance company from Banco Bandeirantes. Net income
adjusted by the amortization of this goodwill reached R$76
million in 4Q04, up 35.7% YoY. Annualized ROAE for insurance,
private pension and extended warranty transactions was 23.7% in
4Q04, based on adjusted net earnings.

4Q04's consolidated revenues for insurance, private pension
plans and extended warranty amounted to R$1,025 million, 24.2%
above 2003 figure.

Unibanco's insurance and pension plan companies ranked fourth in
consolidated terms, according to Superintendencia de Seguros
Privados - SUSEP (Private Insurance Regulatory Body), ANAPP -
Associacao Nacional de Previdencia Privada (National Association
of Private Pension Funds) and ANS - Agencia Nacional de Saude
Suplementar (National Supplementary Health Agency), with an 8.0%
market share (November 2004 data). Insurance and private pension
consolidated technical reserves, plus extended warranty
allowance for risks, amounted to R$5,533 million at the end of
the year.

Insurance

Insurance and extended warranty net premiums written reached
R$662 million in 4Q04, up 19.5% over 4Q03.

Operating profits reached R$24 million in 2004 due to: changes
in the portfolio mix, focusing on high profitability products;
pricing policy based on a strict risk management; and focus on
operational efficiency.

The ratio between administrative expenses and net premiums
written reduced from 9.8% in 2003 to 9.3% in 2004. The combined
ratio, that measures the operational efficiency of the insurance
companies, was 97.3% in 4Q04 and 98.8% in 2004. The extended
combined ratio, which includes financial revenues, reached 86.3%
in 4Q04 and 87.1% for the year.

According to the latest industry data released by SUSEP as of
November 2004, the Company maintained the leadership in the
property risks, D&O (Directors & Officers), aviation,
petrochemical risks, product transportation, and extended
warranty, the latter based on own estimates. The extended
warranty business, formed by Garantech, posted net earnings of
R$9 million in 4Q04, with revenues of R$132 million,
approximately three times above 4Q03.

Insurance technical reserves, plus allowance for extended
warranty risks, amounted to R$1,886 million at the end of 4Q04.

In 4Q04, AIG Warranty and Garantech Garantias e Servicos Ltda.,
both of which act in the extended warranty segment, were unified
and became a single Company: Unibanco AIG Warranty S/A. Unibanco
AIG owns 70% of the new Company.

Private Pension Plans

Unibanco AIG Previdencia posted net earnings of R$55 million in
2004, up 14.6% Y-o-Y. Revenues for the quarter reached R$363
million, up 33.9% Y-o-Y. In 2004, revenues reached R$1,518
million, a 24.5% growth when compared to the previous year.

Unibanco AIG Previdencia ranked fourth in pension plan revenues
up to November 2004, with 8.4% market share, according to
ANAPP's official data. As for the sale of corporate pension
plans, also according to ANAPP's data for November 2004,
Unibanco AIG Previdencia ranked second in terms of accumulated
sales for the year, with a volume of R$823 million. The Company
services 1,231 corporate clients and 733 thousand individual
customers, of which 217 thousand come from corporate clients.

Technical reserves for pension plan stood at R$3,647 million at
the end of 4Q04. In 4Q04, there was an equity adjustment, net of
tax effects, of R$53 million, due to changes on insurance
reserves over both paid benefits and benefits to be paid. This
revision aim to update the Company's reserves to the most recent
tables of mortality, preventing from future exigencies.

Wealth Management

Unibanco Asset Management (UAM) ended December 2004 with R$33.0
billion in assets under management and custody, up 22.4% Y-o-Y.
The year 2004 accounted for positive flow of R$1.9 billion,
mainly from the corporate, institutional and private segments.

UAM generated equity income of R$19 million in 2004, an increase
of 18.9%. In December 2004, UAM's market share was 4.8%,
compared with 4.6% in December 2003. In December 2004, the
Private Banking business posted an increase of 9.9% Y-o-Y in the
volume of assets under management. In the industry global
ranking published by ANBID in December 2004, Unibanco's Private
Bank holds the 2nd position, with a market share of 9.3%.

Human Resources

Unibanco ended 2004 with 27,408 employees, versus 29,025 in June
2004. In 2004, approximately R$24 million were invested in
several corporate education initiatives that focused on
training, perfecting and developing employees skills,
contributing to an organizational culture geared towards
innovation.

One of the main focuses of training was improving the quality of
the management of people through the development of managers and
of leadership competencies. More than 2,000 managers took part
in Module I of the program - Performance and Recruitment
Management - and 470 managers have already completed Module II -
Communication and Leadership Styles.

For the past six years, in association with Fundacao Dom Cabral,
Unibanco has been offering an MBA program, which has trained
more than 150 professionals. The MBA abroad program, for
managerial staff chosen by means of a judicious selection
process, was the object of a R$2 million investment in 2004 and
has benefited 36 executives since 1996.

Clique Conhecimento (Click Knowledge), an online training and
capability-building tool, available through the Corporate
Portal, recorded more than 227,000 visits in 2004, with more
than 33,000 participations in several training programs.

One of the ways of recognizing employee commitment and
outstanding performance is the Stock Option Purchase Plan. At
December 31, 2004, 229 of the organization's executives were
eligible for this plan.

Futuro Inteligente (Intelligent Future), the new private pension
fund program for employees, was introduced in July 2004 and
included a sign-up bonus for all participants, whether
pensioners or actively employed. By December 31, it already had
more than 6,600 participants.

In 2004, the Valor Economico newspaper elected Unibanco the 3rd
best Brazilian Company with more than 15,000 employees in terms
of people management. The newspaper's research was carried out
in association with the Hay Group, a consulting Company
specializing in organizational climate management and research.

Unibanco AIG

Seguros e Previdencia ranked 5th among companies with 1,001 to
2,000 professionals.

Corporate Governance

Secondary Offer of Units

In February 2005, Commerzbank and BNL sold, by means of a
secondary public distribution, 45,897,387 Units, representing
6.6% of Unibanco's capital. The transaction amounted to R$718
million, at a price of R$ 15.65 per Unit. 9.09% of the sales
were distributed via retail, whereas institutional investors
acquired the balance. The deal was carried out only in the
Brazilian market. The float of Units posted an increase of 70.3%
in Brazil and of 11.5% in total, as compared to December 2004.

Unibanco in the IBrX-50 index

On September 1st, 2004, the Unit (Bovespa: UBBR11) became part
of the IBrX50 Index, initially with 2.724% weight in the
theoretical portfolio. In the new portfolio, effective from
January to April 2005, this weight was increased to 2.926%.

The IBrX-50 index comprises the 50-best classified stocks
according to a negotiability index, calculated by Bovespa, and
that have a trading floor presence of at least 80%, measured in
the last twelve months. The inclusion of the Units in the IBrX
50 portfolio is another step to increase their liquidity in the
Brazilian market.

Transparency - IR Website

In January 2005, for the second consecutive year, Unibanco
Investor Relations (IR) website was awarded the Top1 prize as
the best among Banks & Financial Services by technical criteria.
It was also ranked second best in Latin America in the overall
Top 5 Award ranking, promoted by MZ Consult, with the support of
JP Morgan, KPMG and Linklaters. It was the 6th year in a row
that Unibanco's IR website was awarded Top5. This year, the
number of companies that signed up for the contest increased
63%, reaching 426 companies from 42 countries. The IR website is
instrumental in the communication between Unibanco and the
capitals market.

Social Responsibility

Unibanco carries out its social activities geared towards
external communities, mainly by means of two institutes:
Unibanco Institute and Moreira Salles Institute. Besides that,
in its relationship with internal community and related parts,
Unibanco daily exercises corporate citizenship, environmental
care, education development, fight against prejudice and
incentives to voluntary work.

The Unibanco Institute

The Unibanco Institute - responsible for the execution of the
Social Responsibility activities of Unibanco - focuses on
education, preferably on actions that support the social
inclusion of underprivileged teenagers and young adults, as well
as environmental education activities.

In 4Q04, the Unibanco Institute, together with the Junior
Achievement Association, trained 3,140 youngsters from the
public school system. The objective of this initiative is to
awaken an entrepreneurial spirit among students aged 10 to 19,
strengthening their ethical principles and offering them a
realistic view of companies and business. As a side effect, it
prevents these youngsters from being marginalized.

While still in 4Q04, the Unibanco Institute had some 350 youths
graduate from its Program for Preparation for Work. This
project's target audience consists of low-income youths who are
given the opportunity of developing their knowledge, skills and
attitudes in the face of the job market's challenges and of
learning professional disciplines such as telemarketing, office
routines and information technology. Communication and
expression activities, theatre and sensitization are also
included in the program, which hinges on the belief that
technical capabilities and emotional maturity are indispensable
tools for youths to advance toward professional inclusion.

The Moreira Salles Institute (IMS)

Below, the chief highlights of the Moreira Salles Institute in
2004.

- More than 180 thousand people visited the IMS cultural centers
and their exhibitions, a figure 26% higher than the 2003 one.

- 34 exhibitions of fine arts and visual arts were held.

- 38,933 students took part in 2,211 guided visits to the
exhibitions.

- 105 art education activities and movie and theatre sessions
were provided by IMS for children and teenagers.

- More than 3.6 million people attended movie sessions in the
Espaco Unibanco / Unibanco Arteplex chain of theatres.

- A new movie theater complex, Unibanco Arteplex Curitiba,
opened in November. The new complex has five theatres and can
seat 757 people.

- Roughly 100 thousand visitors, largely students from the
public school system, visited the exhibition "Sao Paulo 450
years: the image and memory of the city in the collection of the
Moreira Salles Institute". This tribute to the anniversary of
the city of Sao Paulo also involved the publication of a special
issue of the Cadernos de Fotografia Brasileira on Sao Paulo.

- A special edition of the Cadernos de Literatura Brasileira on
Clarice Lispector, the writer, was also launched.

- A rare collection of music that includes, among other precious
pieces, the first recordings ever produced in Brazil, was made
available, free of charge, in the Institute's website
(www.ims.com.br). The digitization of this musical collection
belonging to IMS was also completed in 2004 and the recordings
will be available on the Internet as from the beginning of 2005,
encompassing more than 30 thousand pieces of music.

To view financial statements:
http://bankrupt.com/misc/Unibanco.pdf

CONTACT: Unibanco
         Av. Eusebio Matoso 891-15
         Sao Paulo, SP 05423-901
         Phone: (55 11) 3097- 1980
         Fax: (55 11) 3813-6182 / 3097-4830
         E-mail: investor.relations@unibanco.com



=============
J A M A I C A
=============

KAISER ALUMINUM: Bankruptcy Court OKs Extension of Exclusivity
--------------------------------------------------------------
On February 11, 2005, the U.S. Bankruptcy Court of the District
of Delaware (the "Court") approved an extension of exclusivity
for Kaiser Aluminum Corporation, its wholly owned subsidiary,
Kaiser Aluminum & Chemical Corporation ("KACC") and all of
KACC's subsidiaries, other than Alpart Jamaica Inc., Kaiser
Jamaica Corporation, Kaiser Alumina Australia Corporation and
Kaiser Finance Corporation, through June 30, 2005. On the same
date, the Court approved an extension of exclusivity for Alpart
Jamaica Inc., Kaiser Jamaica Corporation, Kaiser Alumina
Australia Corporation and Kaiser Finance Corporation through
April 30, 2005.

CONTACT:  Kaiser Aluminum Corp.
          5847 San Felipe
          Suite 2500
          P.O. Box 572887
          Houston, TX 77257-2887
          USA
          Website: http://www.kaiseral.com
          Phone: 713-267-3777

          Officers:
          Jack A. Hockema, CEO
          John T. La Duc, CFO
          John Wm. Niemand II, Sec't.


KAISER ALUMINUM: Committees Approve Salary Hike for VP/CFO
----------------------------------------------------------
On February 15, 2005, the Compensation Policy Committees (the
"Committees") of the Boards of Directors of Kaiser Aluminum
Corporation and KACC increased the annual base salary of Kerry
A. Shiba, Vice President and Chief Financial Officer of the
Company and KACC, to $270,000 retroactive to January 1, 2005.
The Committees also increased (retroactive to January 1, 2005)
Mr. Shiba's target under KACC's long-term incentive and short-
term incentive programs to $258,000 and $95,000, respectively.
The long-term incentive program is a cash-based program under
which participants are eligible to receive an award based on the
attainment by the Company of sustained cost reductions above a
stipulated threshold for the period 2002 through emergence from
bankruptcy. The short-term incentive program is a cash-based
program under which participants are eligible to receive an
award annually based on the Company achieving certain thresholds
of adjusted earnings.  


KAISER ALUMINUM: Director Notifies Board of Intent to Resign
------------------------------------------------------------
On February 15, 2005, James T. Hackett, a director of Kaiser
Aluminum Corporation (the "Company") and KACC, formally notified
the Board of Directors of the Company and KACC of his intention
to resign his positions as a director of each Company as of
February 28, 2005. Mr. Hackett's resignation from each of the
Company's and KACC's Board of Directors is not because of a
disagreement with the Company and/or KACC on any matter relating
to the Company's or KACC's operations, policies or practices.  



===========
M E X I C O
===========

GRUPO DESC: Operating Income Jumps 145.2% in 2004
-------------------------------------------------
HIGHLIGHTS

Accumulated 2004

- Sales surpassed US $2 billion, and increased 13% when compared
to 2003.
- Exports grew 12.5% compared to 2003.
- Operating income increased 145.2% versus 2003, reaching US$ 89
million.
- EBITDA grew 26.0% compared to accumulated 2003, to US$ 198
million.
- Net debt decreased 31.5%, from US $990 million to US $678
million.

4Q04

- Sales and exports increased 16.5% and 10.6% versus 4Q03.
- Operating income increased 680.1% compared to 4Q03.
- EBITDA reached US $45 million, representing an increase of
35.2%, compared to 4Q03.

DESC, S.A. de C.V. (BMV: DESC) announced Monday its unaudited
results for the fourth quarter (4Q04) and twelve-months of 2004.
Except as noted, all figures were prepared according to
generally accepted accounting principles in Mexico (Mexican
GAAP). Unless otherwise noted, the results in this report are
being compared to adjusted 4Q03 and twelve-month 2003 figures,
which are pro forma since they exclude Desc's aluminum wheel,
adhesive and sealant businesses as well as the sold real estate
properties (Chiluca) in order to make them comparable to 4Q04
and twelve-month 2004 results. Management believes that
investors can better evaluate and analyze Desc's historical and
future business trends on a comparative basis if they consider
results of operations without these divested businesses. In
addition, 4Q03 results have been restated in constant pesos as
of December 2004, as well as in dollars.

SALES AND EXPORTS

4Q04 sales increased 16.5%, compared to 4Q03, reaching US $539
million, while figures for the twelve month 2004 versus 2003
periods increased 13.0%, reaching US $2.059 billion. These
increases are a result of improved volumes and prices.

Total exports for 4Q04 reached US $236 million, an increase of
10.6% compared to 4Q03. This was mainly due to higher export
sales in the sectors. Exports for the twelve months of 2004
increased 12.5% compared to the same period of 2003, due to
improved results from all the exporting sectors; 6.9% higher in
the Automotive Sector, 23.0% higher in the Chemical Sector and
8.9% in the Food Sector.

OPERATING INCOME

Consolidated operating income in dollars for 4Q04 increased
680.1% compared to 4Q03, reaching US $21 million. Strict
controls applied by the Company brought the operating expense to
sales ratio down from 18% in the twelve-month 2003 period to 15%
in the twelve-month 2004 period, thus reaching the objectives
established with the market, as well as Desc's efforts to offset
raw material price increases with improvements in productivity
and price increases (Automotive and Chemical Sectors). It is
important to mention the significant recovery in the Company's
operating margin, which increased from 0.6% in 4Q03, to 3.9% in
4Q04.

EBITDA

EBITDA for 4Q04 was US $45 million, an increase of 35.2%
compared to 4Q03. For the accumulated 2004 period, EBITDA
reached US $198 million, 26.0% higher than the figure for 2003.
These results reflect the improvements in most of the sectors,
mainly the Chemical and Food Sectors. In addition, it
demonstrates that results have stabilized throughout the year,
despite significant increases in the prices of some raw
materials, mainly steel, natural gas, butadiene and styrene.

NET INCOME

Consolidated net income in dollars for 4Q04, reached US $2
million. This was mainly due to the improvement in operating
income, lower interest expenses and lower taxes. For the twelve-
month 2004 period, the Company reported a loss of US $17
million, which is significantly lower than the US $207 million
loss reported for the twelve-month 2003 period. The 2004 result
was mainly attributable to certain non-recurring charges,
including the application of Boletin C-15.

DEBT STRUCTURE

During 4Q04, Desc's net debt declined US $25 million compared to
3Q04, from US $703 million to US $678 million, representing a
decrease of 3.6%. For the twelve-month period of 2004, the net
debt decreased 31.5%, or US $312 million, from US $990 million
to US $678 million, mainly as a result of the capital increase,
the improvements in the operating cash flow, important efforts
to control working capital, lower taxes and lower financial
expenses.

As of December 31, 2004, the total debt mix was 59% dollar-
denominated, 11% peso-denominated and 30% in UDIS. The debt
profile at the close of 4Q04 was 95% long-term and 5% short-
term. The average cost of debt was 5.65% for the dollar-
denominated debt and 11.56% for the peso-denominated debt,
compared to 5.19% and 8.24%, respectively in 4Q03.

The leverage ratio experienced a positive trend, going from
4.96x in 4Q03 to 3.43x in 4Q04, mainly due to the decrease in
debt and the improvements in EBITDA. The interest coverage ratio
also experienced improvements, going from 2.91x during 4Q03 to
3.42x in 4Q04.

KEY EVENTS

ADR DELISTING

The Company successfully concluded the process for delisting its
American Deositary Receipts ("ADRs") from the New York Stock
Exchange ("NYSE") and deregistered from the SEC ("Securities and
Exchange Commission"). As a result, as of January 6, 2005, the
Company is no longer obligated to file certain forms and
documents with the SEC, including the annual report (Form 20-F),
as well as other periodic reports (Form 6-K).

RE-INSTATEMENT INTO THE IPC

In January 2005, the Mexican Stock Exchange informed Desc that
its Series B share had been included in the IPC Index for the
February 2005-January 2006 period.

SALE OF CONSTANT VELOCITY JOINT BUSINESS

On February 1, 2005, the Company announced the sale of its 51%
stake in Velcon to GKN Industries. The total value of the
transaction was approximately US $86 million. The constant
velocity joint business is facing strong worldwide competition,
mainly from the Japanese Company NTN.

The funds obtained from the transaction will mainly be used to
continue lowering the Company's debt levels, lowering leverage
levels and financial costs, thus strengthening Desc's financial
structure and allowing it to grow and focus on businesses with
greater potential to generate value and growth.

This transaction is very positive from an economic point of
view, since it generated an attractive multiple for the industry
and also generates an extraordinary income of approximately US
$30 million.

Finally, it is important to mention that with this transaction,
Desc's net debt will decrease to US $615 million, leaving a debt
ratio of 3.1x, both figures of which are pro forma.

RESULTS BY SECTOR

Automotive Sector

During 4Q04, sales increased 10.1% compared to 4Q03, mainly due
to higher requirements from the Tractor Project related to the
cardan shaft, forge, axle and semi-axle businesses, as well as
the volume increases in the gear business with Dana related to
the X5 platform for BMW. This increase was possible despite the
decrease in vehicle production in Mexico during 2004 of 1.0%,
which mainly affected the Big 3 (General Motors, DaimlerChrysler
and Ford.)

For the twelve-month 2004 period, sales increased 8.3% compared
to the same period of the previous year, mainly as a result of
higher demand from the Tractor Project.

Operating income is not comparable because depreciation was
modified due to the application of Boletin C-15, which
establishes the recognition and accounting of the deterioration
of long-term assets, including these as fixed assets and
intangibles including goodwill.

The EBITDA decrease of 34.3% reflects the fact that despite the
strict expense controls, during 2004 cost of sales went from
82.6% to 85.9%, mainly due to the increases in the price of
steel and expenses for transportation and logistics. Expenses
decreased from 13.9% for the twelve-month 2003 period to 10.7%
for the 2004 period, with respect to sales.

It is important to mention that in 2004, the Company won
contracts for a total of US $263 million, that start production
in 2004 to 2007, mainly in the transmission, rim, axle, stamping
and cardan shaft businesses.

The sale for new businesses reflected on 2004 is of US $42
million, and from the period 2005 to 2008 the annual average
sale of this concept is of approximately US $227 million, from
this number an approximate amount of US $20 million has to be
subtracted due to platforms that conclude.

CHEMICAL SECTOR

Sales in 4Q04 reached US$216 million, an increase of 31.5%
compared to sales in 4Q03, due primarily to price increases in
all of the businesses and in-line with market conditions; and to
a lesser extent due to improved volumes in practically all of
Desc's businesses as a result of an increase in domestic
consumption and higher export levels.

Sales for the twelve-month 2004 period increased 22.6% with
respect to the same period of the previous year primarily due to
two effects, an increase in prices derived from the increase in
the price of raw materials and greater volume in all the
businesses.

Operating income for the twelve-month 2004 period was US$27
million, a figure 156.3% greater than the twelve-month 2003
period. In 4Q04, operating income was US$8 million, 65.7%
greater than 4Q03. This improvement was due to an increase in
margins as a result of Desc being able to mitigate to a greater
extent the increase in the costs of raw materials, combined with
stricter controls of operating expenses, which decreased from
16.2% during the January - December 2003 period to 13.9% in the
January - December 2004 period with respect to sales, and an
increase in sales volumes which were not possible during
previous quarters due to market conditions with the consequence
being a decrease in operating margins.

The main raw material costs increased between 30% and 70%
compared to 4Q03 due to the volatility of oil prices which
translated into increases in the principle derivatives and the
scarcity of butadiene monomer that increased the cost of sale
from 82.2% in the January - December 2003 period to 82.7% in the
January to December 2004 period.

FOOD SECTOR

Branded Products

During 4Q04 sales increased 6.0% with respect to 4Q03, while
sales for the twelve-month 2004 period increased 5.3% with
respect to the same period of 2003. These increases were due to
higher sales volumes and greater market shares in all product
lines, most notably: "Del Fuerte" brand tomato paste increasing
its market share from 63.2% in 2003 to 65.2% in 2004, Smucker's
with an increase of market share from 11.1% in 2003 to 12.6% in
2004, an excellent performance in powered beverages "Zuko"
increasing its market share from 4.9% in 2003 to 10.9% in 2004,
as well as an increase in prices, primarily in tuna, and in the
remaining categories above the rate of inflation. The above has
compensated for the rise in packaging and oil costs, as well as
the scarcity of fish (tuna).

Another positive factor was the launch of Project "Revolution"
regarding Tetra-Recart packaged vegetables which conserve
nutritional properties and do not contain preservatives in order
to give the Company a competitive advantage in the market.

In the U.S. branded products business ("La Victoria"), the
institutional and supermarket channels registered excellent
performances in 4Q04 thanks to the turn-around of the North
American economy, as well as an improved product mix with better
pricing and margins.

4Q04 operating income and EBITDA had important increases of
128.8% and 59.3%, respectively, in comparison to 4Q03. This is
attributable to improved sales, improved costs and expense
controls combined with greater efficiency indices at the plants,
the use of fresh tomatoes in place of tomato paste and better
tuna sales, which compensated for the increases in raw materials
and packaging.

For the twelve month 2004 period, the increases were 100.8% and
42.0% with respect to the twelve month 2003 period due to
increases in market share and greater sales volume.

Pork Business

During 4Q04 sales registered an increase of 23.9% with respect
to 4Q03 due to better pork prices, as well as greater export
sales, which continued throughout all of 2004. Sales for the
twelve-month 2004 period were US$164 million, a figure 23.6%
greater when compared to the twelve-month 2003 period.

Pork prices continued their upward trend during 4Q04, increasing
18.2% compared to the previous year, which has resulted in an
excellent rebound in operating margin from 7.9% in 4Q03 to 14.5%
in 4Q04, as well as a 128.2% improvement in EBITDA generation
during 4Q04 compared to 4Q03 and a 305.4% improvement during the
twelve-month 2004 period compared to the same period of 2003.

Another positive effect was the improved sales in the export
market due to higher demand from Japan.

REAL ESTATE SECTOR

Sales in 4Q04 reached US$24 million, which represented an
increase of 55.1% compared to 4Q03 primarily due to greater
sales in the Punta Mita project.

Sales for 4Q04 were distributed as follows:

         Punta Mita            65.2%
         Bosques de Santa Fe   29.5%
         Others                5.3%

During the quarter, Desc registered an operating loss of US$1
million and an EBITDA of US$1 million, which were better figures
than those obtained during 4Q03. Sales for the twelve-month 2004
period registered an increase of 5.5% with respect to sales
during the same period of 2003 fundamentally due to the good
acceptance of the Punta Mita project. Furthermore, operating
income and EBITDA from the January - December 2004 period had an
important increase of 612.6% and 229.0%, respectively, in
comparison to the January - December 2003 period.

The market reacted positively to the Punta Mita project in 2004
as sales for this project increased 171.0% compared to sales in
2003 due to the growing interest in luxury developments
primarily on the part of the North American market. At the close
of 2004, Bosque de Santa Fe had sold 91% of the available
single-family homes.

At the close of 2004, the Arcos Bosques complex had sold 70% of
the available offices in Building North C. In addition, Desc
sold the remaining two lots for the development of buildings
within the complex.

To view financial statements:
http://bankrupt.com/misc/DESC.pdf

CONTACT: Ms. Marisol Vazquez-Mellado
         Mr. Jorge Padilla
         Phone: (5255) 5261 8044
         E-mail: investor.relation@desc.com.mx



=================
V E N E Z U E L A
=================

EDC: Invites Shareholders to March 4 Meeting
--------------------------------------------
C.A. La Electricidad de Caracas has invited its shareholders to
an Ordinary General Shareholder Meeting to be held on March 04,
2005. This Assembly will consider:

1. Year end 2004 Results.

2. Elections of the primary and alternate members of the Board
of Directors for the 2005-2006 period, as well as the members of
the External Directors Committee, the Counselor, and
commissioner for the same period.

3. Approval of a maximum limit of circulation of commercial
papers.

4. Approval of the amount and tenor of bonds, obligations or
other securities regulated by the capital market law.

5. Proposal for a dividend payment.

C.A. La Electricidad de Caracas y Companias Filiales (EDC) is an
affiliate of The AES Corporation (AES). EDC provides electricity
mainly to the Caracas Metropolitan Area and is the largest
private utility in Venezuela. Each share of EDC is transacted in
the Bolsa de Valores de Caracas (Caracas Stock Exchange). EDC
American Depositary Receipts (ADRs) are dealt in U.S. "over-the-
counter" market under the symbol "ELDAY."

AES is a leading global power Company, with 2004 sales of $9.5
billion. AES delivers 45,000 megawatts of electricity to
customers in 27 countries through 113 power facilities and 17
distribution companies. Our 30,000 people are committed to
operational excellence and meeting the world's growing power
needs.

CONTACT: C.A. La Electricidad de Caracas
         Avenida Vollmer
         Caracas, Venezuela

         Scarlett Alvarez
         Directora: Relaciones con Inversionistas
         Tel: 0212 502-2950
         E-mail: edcinversionistas@aes.com


PDVSA: 30 Execs Fired Due to Corruption Charges
-----------------------------------------------
Around 30 executives of state oil Company Petroleos de Venezuela
have been sacked for alleged corruption, reports Dow Jones
Newswires.

"We are reviewing cases of corruption and we are firing managers
and supervisors for engaging in practices outside of
regulation," PDVSA President Rafael Ramirez was quoted as saying
over the weekend.

"It is inadmissible for corrupt managers to be selling jobs," he
added.

The dismissals are reportedly a follow up to hearing complaints
from workers. Last November, Ramirez, who is also the country's
oil minister, is believed to have held a closed door meeting
with workers in the El Menito PDVSA building.

Analysts say Ramirez is responding to President Hugo Chavez
Frias' clamp down on corruption. Ramirez is tackling the age-old
problem of selling job positions by foremen and trade union
officials.

"PDVSA is making a qualitative leap in its administrative
practices and we have made an important step in stopping
sabotage."

PDVSA Director Luis Vierma indicated there could be additional
dismissals in the coming days.


PDVSA: Professor Says Company is Keeping Oil Profits Abroad
-----------------------------------------------------------
Economist and Central University professor Jose Guerra accused
PDVSA of keeping profits from oil export revenues in overseas
accounts instead of giving them to the central bank as it is
supposed to do by law, reports Business News Americas.

Guerra said PDVSA received US$32.5 billion in oil export
revenues last year, but the Central Bank says its expenses only
amounted to US$29.3 billion, leaving US$3.52 billion in profits
that should have been handed over to the Bank but were not.

PDVSA is bound by law to exchange all of the US dollars it
receives from oil export revenues for bolivars from the Central
Bank, after deducting contributions to President Hugo Chavez's
social development funds.


* VENEZUELA: To Make Good on Oil-Linked Debt Payment
----------------------------------------------------
Reversing its earlier decision, Venezuela's government says it
will pay as much as US$329,300 in delayed oil-linked debt
obligations, according to Dow Jones Newswires.

Standard & Poor's ratings agency recently downgraded Venezuela's
debt standing to "selective default" for missing the payment
expected for Oct. 15, 2004. S&P had estimated the delayed
obligations at US$35 million.

The government initially suggested a number of administrative
problems had led the government to miss that payment, but later
said that probably no money could be owed after all.

Government officials now are saying a payment will be made once
bondholders take the required steps to demand the money. The
government and J.P. Morgan, the bank adviser on the matter, have
determined that a maximum of US$329,300 could be paid in coming
weeks, but the figure isn't official yet, according to a finance
ministry spokesman.



                            ***********


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