Grupo Simec Announces Results Of Operations For The First Qu

|Apr 30|magazine23 min read

GUADALAJARA, Mexico, April 30, 2020 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM, BMV: SIMEC-B) ("Simec") announced today its results of operations for the three-month period ended March 31, 2020.

Comparative first quarter of 2020 vs. first quarter of 2019

Net Sales
The net sales of the company decreased derived from a less sales price. Sales passed from Ps. 9,503 million in the first quarter of 2019 to Ps. 8,500 million in the same period of 2020. Shipments of steel finished goods increased 5% from 591 thousand tons in the first quarter of 2019 compared to 622 thousand tons in the same period of 2020. Total sales outside of Mexico in the first quarter of 2020 decreased 14% to reach Ps. 4,096 million compared to Ps. 4,783 million in the same period of 2019. The Mexican sales decreased 7% from Ps. 4,720 million in the first quarter of 2019 to Ps. 4,404 million in the same period of 2020. The keep in sales can be explained due to a higher volume shipped in 5% compared with the same period of 2019. The average sales price per ton of steel finished goods decreased 15% in the first quarter of 2020 compared with the same period of 2019.

Cost of Sales
The cost of sales decreased from Ps. 8,406 million in the first quarter of 2019 to Ps. 6,960 million in the same period of 2020. Cost of sales as a percentage of net sales in the first quarter of 2020 and 2019 represented 82% and 88% respectively. The average cost of sales per ton of steel finished goods decreased 21% in the first quarter of 2020 compared to the same period of 2019.

Gross Profit
The gross profit of the company increased 40% from Ps. 1,097 million in 2019 to Ps. 1,540 million in the same period of 2020. Gross profit as a percentage of net sales in the first quarter of 2020 and 2019 represented 18% and 12% respectively. The decrease in gross profit is due to a higher average cost of the raw materials in the first quarter of 2020 compared with the same period of 2019.

General, Sales and administrative Expenses
General, selling and administrative expenses increased 39%, from Ps. 311 million in the first quarter of 2019 to Ps. 431 million in the same period of 2020 and representing 3% of net sales in 2019 compared to 5% for the period 2020.

Other Expenses (Income) net
The company recorded other income net of Ps. 102 million in the first quarter of 2020 compared to other expenses net of Ps. 67 million in the same period of 2019.

Operating Income
The operating income increased from Ps. 853 million for the first quarter of 2019 compared to Ps. 1,211 million in the same period of 2020. Operating income as a percentage of net sales was 14% in the first quarter of 2020 compared to 9% in the same period of 2019. The decrease in operating income is due to a higher production cost and cost of sales in the first quarter of 2020 compared with the same period of 2019.

EBITDA
The EBITDA of the Company was of 1,127 million for the first quarter of 2019, as a result of a net income of Ps. 425 million, less minority stake of Ps. 41 million, less income taxes of Ps. 21 million, plus comprehensive financial cost of Ps. 490 million, plus depreciation of Ps. 274 million to Ps 1,526 million in the same period of 2020 as a result of a net income of Ps. 1,914 million, less minority stake of Ps. 19 million, plus income taxes of Ps. 578 million, less comprehensive financial cost of Ps. 1,262 million, plus depreciation of Ps. 315.

Comprehensive Financial Cost 
The Comprehensive financial cost in the first quarter of 2020 represented a net income of Ps. 1,262 million compared with an expense of Ps.490 million in the same period of 2019. Net interest was an income of Ps. 44 million in the first quarter of 2020 compared with a net income of Ps. 13 million in the same period of 2019. At the same time, Simec registered an exchange rate of Ps. 1,218 million in the first quarter of 2020 compared with an exchange loss of Ps. 503 million in the same period of 2019.

Income Taxes
Income Taxes recorded an expense of Ps. 578 million in the first quarter of 2020 (including the income of Ps. 12 million of deferred income taxes) compared to an income of Ps. 21 million in the same period of 2019 (including the benefits of Ps. 21 million of deferred income taxes).

Net Income (loss)
As a result of the foregoing, net income increases 350% to Ps. 1,914 million in the first quarter of 2020 from Ps. 425 million in the same period of previous year.

Financial Situation, Liquidity and Capital Resources
As of March 31, 2020, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 7.3 million (accrued interest on March 31, 2020 was U.S. $689 or Ps. 16.7 million).  As of March 31, 2019, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.8 million (accrued interest on March 31, 2019 was U.S. $656 or Ps. 12.9 million).

Comparative first quarter of 2020 vs. fourth quarter of 2019

Net Sales
The net sales of the company increased 16% comparing Ps. 7,315 million in the fourth quarter of 2019 to Ps. 8,500 million in the first quarter of 2020. The tons sales increased 9%, from 570 thousand tons in the fourth quarter of 2019 compared to 622 thousand tons in the first quarter of 2020. Total sales outside of Mexico in the first quarter of 2020 increased 17% from Ps. 3,497 million on the last quarter of 2019 compared to Ps. 4,096 million in the first quarter of 2020. The Mexican sales increased 15% from Ps. 3,818 million in the fourth quarter of 2019 to Ps. 4,404 million in the first quarter of 2020. The increase mainly due to a greater volume shipped, better average sales price per ton, increased 6%, in the first quarter of 2020 compared with the fourth quarter of 2019.

Cost of Sales
Cost of sales increased 7% from Ps. 6,494 million in the fourth quarter of 2019 to Ps. 6,960 million in the first quarter of 2020. Cost of sales as a percentage of net sales in the first quarter of 2020 represented 82% and in the last quarter of 2019 cost of sales represented 89%. The average cost of finished steel products in the first quarter of 2020 decreased 2% compared to the fourth quarter of 2019 as a result of an increased on the cost of raw materials.

Gross Profit
Gross profit of the company for the first quarter of 2020 increased to Ps. 1,540 million in 2020 from Ps. 821 million in the last quarter of 2019. Gross profit as a percentage of net sales in the first quarter of 2020 was 18% and for the last period of 2019 was 11%. The increase in gross profit is due to a better average sales price and volume of shipments on the first quarter of 2020 compared with the last quarter of 2019.

General, Sales and administrative Expenses
General, selling and administrative expenses decreased to Ps. 431 million in the first quarter of 2020 compared to Ps. 475 million in the fourth quarter of 2019, representing 5% for the period of the first quarter 2020 and 6% for the period of the fourth quarter 2019.

Other Expenses (Income) net
The company recorded other net income of Ps. 102 million in the first quarter of 2020 compared to other net expenses of Ps. 136 million in the fourth quarter of 2019.

Operating Income
Operating income increased 477% to Ps. 1,211 million for the first quarter of 2020 compared to Ps. 210 million in the last quarter of 2019. Operating income as a percentage of net sales was 14% in the first quarter of 2020, compared to 3% in the last quarter of 2019. The increase in operating income is due to the increase in production and volume of shipments, in the first quarter of 2020 compared with the fourth quarter of 2019.

EBITDA
The EBITDA of the Company was of 475 million for the fourth quarter of 2019, as a result of a net loss of Ps. 2,629 million, less minority stake of Ps. 143 million, plus income taxes of Ps. 3,097 million, less comprehensive financial cost of Ps. 115 million, plus depreciation of Ps. 265 million to Ps 1,526 million in the first quarter of 2020 as a result of a net income of Ps. 1914 million, less minority stake of Ps. 19 million, plus income taxes of Ps. 578 million, less comprehensive financial cost of Ps. 1,262 million, plus depreciation of Ps. 315.

Comprehensive Financial Cost 
Comprehensive financial cost in the first quarter of 2020 represented a net income of Ps. 1,262 million compared with a net income of Ps. 115 million in the fourth quarter of 2019. Net interest income of the first quarter of 2020 was of Ps. 44 million compared with an interest net income of Ps. 447 million in the last quarter of 2019. Likewise, an exchange profit of 1,218 million was recorded in the first quarter of 2020 against an exchange loss of Ps. 332 million in the last quarter of 2019.

Income Taxes
Income Taxes recorded an expense of Ps. 578 million in the first quarter of 2020 (including Ps. 12 million of deferred income taxes) compared with an expense of Ps. 3,097 million in the fourth quarter of 2019 (including Ps. 50 million of deferred expense taxes).

Net Income (loss)
As a result of the foregoing, the net income of the first quarter of 2020 is of Ps. 1,914 million compared net loss Ps. 2,629 million of the fourth quarter 2019.

Quarter






(millions of pesos)

1Q'20

1Q '19

4Q '19

1Q´20 vs
1Q´19

1Q´20 vs
4Q '19

Sales

8,500

9,503

7,315

(11%)

16%

Cost of Sales

6,960

8,406

6,494

(17%)

7%

Gross Profit

1,540

1,097

821

40%

88%

Selling, General and Adm. Expenses

431

311

475

39%

(9%)

Other Income (Expenses), net

102

67

(136)

52%

(175%)

Operating Profit

1,211

853

210

42%

477%

EBITDA

1,526

1,127

475

35%

221%

Net Income

1,914

425

(2,629)

350%

(173%)

Sales Outside Mexico

4,096

4,783

3,497

(14%)

17%

Sales in Mexico

4,404

4,720

3,818

(7%)

15%

Total Sales (Tons)

622

591

570

5%

9%

Cost per Ton

11,190

14,223

11,393

(21%)

(2%)

    

Product

Thousands of Tons

Jan-Mar 2020

Million

of Pesos     Jan-Mar 2020

Average Price per Ton

Jan-Mar

2020

Thousands of Tons

Jan-Mar

2019

Million of Pesos     Jan-Mar

2019

Average Price per Ton

Jan-Mar

2019

Thousands of 
Tons 

Oct-Dec

2019

Million of

Pesos

Oct- Dec 2019

Average Price per Ton  Oct-Dec

2019

Commercial Profiles

398

4,780

12,010

363

5,001

13,777

379

4,273

11,274

Special Profiles

224

3,720

16,682

228

4,502

19,746

191

3,042

15,927











Total

622

8,500

13,666

591

9,503

16,080

570

7,315

12,833

Any forward-looking information contained herein is inherently subject to various risks, uncertainties and assumptions which, if incorrect, may cause actual results to vary materially from those anticipated, expected or estimated. The company assumes no obligation to update any forward-looking information contained herein.  

Contact: Sergio Vigil González
Mario Moreno Cortez
Grupo Simec, S.A.B. de C.V.
Calzada Lázaro Cárdenas 601
44440 Guadalajara, Jalisco, México
52 55 1165 1025
52 33 3770 6734

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SOURCE Grupo Simec, S.A.B. de C.V.