2014

Grupo Simec Announces Results of Operations For The First Nine Months of 2013

GUADALAJARA, Mexico, Oct. 25, 2013 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the nine-month period ended September 30, 2013.

Comparative first nine months of 2013 vs. first nine months of 2012

Net Sales
Net sales of the Company decreased 20% from Ps. 23,418 million in the first nine months of 2012 to Ps. 18,836 million in the nine months of 2013. Shipments of finished steel products decreased 9% from 1,742 thousand tons in the first nine months of 2012 to 1,580 thousand tons in the first nine months of 2013. Total sales outside of Mexico in the first nine months of 2013 decreased 23% to Ps. 8,910 million compared to Ps.11,608 million in the first nine months of 2012. Mexican sales decreased 16% from Ps. 11,810 million in the first nine months of 2012 to Ps. 9,926 million in the first nine months of 2013.  The decrease in sales for the first nine months of 2013 compared to the first nine months of 2012, is due to the combined of worst average sales price approximately of 11% and decrease in the volume of shipments of 162 thousand tons.

Cost of Sales
Cost of sales decreased 15% from Ps. 19,953 million in the first nine months of 2012, to Ps. 16,964 million in the first nine months of 2013. Cost of sales as a percentage of net sales represented 90% in the first nine months of 2013 while in the first nine months of 2012 represented 85%. Cost of sales decreased approximately 6% in the first nine months of 2013 over the same period of 2012 due to the minor volume shipment.

Gross Profit
Gross profit of the Company for the first nine months of 2013 decreased 46% from Ps. 3,465 million in the first nine months of 2012, to Ps. 1,872 million in the first nine months of 2013. Marginal profit as percentage of net sales in the first nine months of 2013 was of 10% while in the first nine months of 2012 was of 15%. The gross profit between both periods is given by a decrease in the average sales price and a lower volume of shipments between both periods.

General, Selling and Administrative Expense
Selling, general and administrative expense increased 2%, from Ps.866 million in the first nine months of 2012 to Ps. 883 million in the same period 2013, selling, general and administrative expense represented 5% of the net sales of the first nine months of 2013 and 4% of net sales in the first nine months of 2012.

Other Income (Expenses,) net
The Company recorded other income net for Ps. 9 million during the first nine months of 2013 while in the same periods of 2012 the other expense net by this concept was of Ps. 5 million.

Operating Income
Operating income decreased 62% from Ps. 2,594 million for the first nine months of 2012 compared to Ps. 998 million in the first nine months of 2013. Operating income as percentage of net sales was 5% in the first nine months of 2013 compared to 11% in the same period of 2012. The decrease in operating income is due to a decrease in the selling price and decrease in volume of finish good shipments.

Ebitda
The Ebitda of the first nine months of 2013 decreased 45% compared to first nine months of 2012, due to a decrease in the average sales price and to a minor volume shipments. The Ebitda passed of Ps. 3,329 million in the first nine months of 2012 to Ps. 1,843 million in the first nine months of 2013.

Comprehensive Financial Cost 
Comprehensive financial cost for the first nine months of 2013 represented an expense of Ps. 159 million compared with of Ps. 214 million of expense for the first nine months of 2012. The comprehensive financial cost is comprised by the exchange loss of Ps.132 million in the first nine months of 2013 compared with an exchange loss of Ps. 214 million in the first nine months of 2012 due to the slip in the exchange rate of the Ps. against the dollar of 1% in the first nine months of 2013. Also record a net expense interest of Ps. 26 million for the first nine months of 2013, compared with a net income interest of Ps.0.5 million in 2012.

Income Taxes
The Company recorded an income of Ps. 247 million for the net income tax during the first nine months of 2013, (includes a deferred income tax of Ps. 141 million) compared with an income of Ps. 35 million of income tax for the first nine months of 2012 (includes a deferred income tax of Ps. 35 million).

Net Income
As a result of the foregoing, the Company recorded a decrease in net income of 42% to pass of Ps. 2,353 million in the first nine months of 2012 to Ps. 1,366 million of the same period of 2013.

Liquidity and Capital Resources

As of September 30, 2013, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.0 million (accrued interest on September 30, 2013 was U.S. $520,000, or Ps. 6.8 million).  As of December 31, 2012, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 3.9 million (accrued interest on December 31, 2012 was U.S. $500,000, or Ps. 6.5 million).

Comparative third quarter of 2013 vs. second quarter of 2013

Net Sales
Net sales of the Company increased slightly to pass of Ps. 6,182 million during the second quarter of 2013 to Ps. 6,211 million in the third quarter of 2013. Shipments of finished steel products increased from 522 thousand tons in the second quarter of 2013 to 527 thousand tons in the third quarter of the same year. Total sales outside of Mexico in the third quarter of 2013 increased 1% to get to Ps. 2,941 million compared to Ps.2,898 million of the second quarter of the same year. Mexican sales show a decrease of from Ps. 3,284 million in the second quarter of 2013 to Ps. 3,270 million in the third quarter of the same year. The average selling price remained in the third quarter of 2013 compared to the second quarter of the same year.

Cost of Sales
Cost of sales increased from Ps. 5,506 million in the second quarter of 2013 to Ps. 5,736 million in the third quarter of 2013. Cost of sales as a percentage of net sales represented 92% for the third quarter of 2013 compared to 89% for the second quarter of the same year, the average cost of sales by ton record an increase between both quarters of 3%, due mainly to increase of raw materials.

Gross Profit
Gross profit of the Company for the third quarter of 2013 decreased 30% to pass of Ps. 676 million in the second quarter of 2013 to Ps. 475 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2013 was of 8% compared to 11% in the second quarter of the same year. The decreased in the gross profit in the third quarter of 2013 is caused by the cost of sales.

General, Selling and Administrative Expense
Selling, general and administrative expense increase 8%, of Ps. 265 million in the second quarter of 2013 and Ps. 286 million in the third quarter of the same year, and as percentage of net sales represented 4% for the second quarter compared to 5% for the third quarter of the same year.

Other (Expenses) Income, net 
The Company recorded other expense net for Ps. 0.5 million during the third quarter of 2013 compared to other income net for Ps. 12 million in the second quarter of 2013.

Operating Income
Operating income de of Ps. 423 million in the second quarter of 2013 compared to Ps. 188 of the third quarter of the same year. Operating income as percentage of net sales was 7% for the second quarter compared to 3% for the third quarter of the same year. The decrease in operating income is due mainly to an increase in the cost of sales and in the general, sell and administrative expense of the third quarter.

Ebitda
The Ebitda in the third quarter of 2013 show a decrease of 32% compared to the second quarter of the same year, this is due to previously mentioned. The Ebitda, of the third quarter was of Ps. 472 million versus Ps. 692 million in the second quarter of 2013.

Comprehensive Financial Cost 
Comprehensive financial cost of the Company in the third quarter of 2013 represented an income of Ps. 65 million compared with an expense of Ps. 6 million for the second quarter of 2013. The comprehensive financial cost is comprised for: the net interest expense of Ps. 26 million in the third quarter of 2013 compared to net interest expense of 1 million in the second quarter of the same year. Also we record a net exchange income net of Ps. 91 million in the third quarter of 2013 compared a net exchange loss of Ps. 5 million in the second quarter of the same year.

Income Taxes
The Company have been recorded an income of Ps. 144 million of income tax during the third quarter of 2013, (includes a deferred income tax of Ps.60 million) compared with the Ps. 85 million of income for the second quarter of the same year, (includes a deferred income tax of Ps. 54 million).

Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 509 million in the third quarter of 2013 compared to a net income of Ps. 551 million for the second quarter of 2013.

Comparative third quarter of 2013 vs. third quarter of 2012

Net Sales
Net sales of the Company decreased 13% from Ps. 7,153 million during the third quarter of 2012 to Ps. 6,211 million in the third quarter of 2013. Sales in tons of finished steel decreased from 558 thousand tons in the third quarter of 2012 compared with 527 thousand tons in the third quarter of 2013. Sales outside of Mexico in the third quarter of 2013 decreased 8% from Ps. 3,188 million in the third quarter of 2012 to Ps. 2,941 million in the third quarter of 2013. Mexican sales decreased 18% from Ps. 3,965 million in the third quarter of 2012 to Ps. 3,270 million in the third quarter of 2013. The average sales price decreased approximately 8% in the third quarter of 2013, compared to the same period of the 2012.

Cost of Sales
Cost of sales decreased 6% in the third quarter of 2013 compared to the third quarter of 2012 from Ps. 6,093 million in the third quarter of 2012 to Ps. 5,736 million in the third quarter of 2013. With respect to sales, the cost of sales of the third quarter of 2013 represented 92% compared to 85% for the third quarter of 2012. The average cost of raw materials used to produce steel products decreased 0.3% in the third quarter of 2013 versus the third quarter of 2012, due to decrease of raw materials.

Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2013 amount to Ps. 475 million compared to Ps. 1,060 million in the third quarter of 2012, this represented a decrease of 55% between both periods. Gross profit as a percentage of net sales for the third quarter of 2013 was 8% compared to 15% of the third quarter of 2012. The decrease in gross profit is due mainly for a less volume of shipments and less average sales price of the third quarter of 2013 compared with the third quarter of 2012.

General, Selling and Administrative Expense
The selling, general and administrative expense increased 10% in the third quarter of 2013 from Ps. 261 million in the third quarter of 2012 to Ps. 286 million in the third quarter of 2013. Selling, general and administrative expense as a percentage of net sales represented 5% for the third quarter of 2013 compared to 4% of the third quarter of 2012.

Other Income (Expenses), net
The company recorded other income net of Ps. 0.5 million in the third quarter of 2013 compared with other expense net of Ps. 3 million for the third quarter of 2012.

Operating (Loss) Income
Operating income amounted to Ps. 188 million in the third quarter 2013 compared to Ps. 802 million in the third quarter of 2012, this represent 77% of decrease between both quarters. The operating income as a percentage of net sales in the third quarter of 2013 was 3% and 11% in the third quarter of 2012. The decrease in the operating income is due to a less volume of shipments and less average sales price effective in the third quarter of 2013 compared to the same period of 2012.

Ebitda
The Ebitda of the third quarter of 2013 decreased 54%  in the third quarter of 2013 from Ps 1,033 million in the third quarter of 2012 to Ps. 472 million of the same period of 2013, this is due to the above explained in the operating income.

Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2013 represented a net income of Ps. 65 million compared with an expense of Ps. 187 million for the third quarter of 2012. The comprehensive financial cost is comprised for: the net interest expense of Ps. 26 million in the third quarter of 2013, compared to a net interest expense of Ps. 1 million for the same period of 2012. Also record an exchange gain of Ps. 91 million in the third quarter of 2013 and an exchange loss of Ps. 187 million in the third quarter of 2012.

Income Taxes
The company recorded an income for income tax for Ps. 144 million in the third quarter of 2013, (includes a deferred income tax of Ps. 60 million) compared to an expense of Ps. 14 million for income tax for the third quarter of 2012, (includes a deferred income tax of Ps. 29 million).

Net Income (Loss)
As a result of the foregoing, the Company net income was of Ps. 509 million in the third quarter of 2013 compared to a net income of Ps. 576 million for the same period of the 2012.

(million of pesos)

3Q '13


3Q '12


Year 13 vs
 '12

Sales

18,836


23,418


(20%)

Cost of Sales

16,964


19,953


(15%)

Gross Profit

1,872


3,465


(46%)

Selling, General and Administrative Expense

883


866


2%

Other Income (Expenses), net

9


(5)


(280%)

Operating Profit

998


2,594


(62%)

EBITDA

1,843


3,329


(45%)

Net income 

1,366


2,353


(42%)

Sales Outside Mexico

8,910


11,608


(23%)

Sales in Mexico

9,926


11,810


(16%)

Total Sales (Tons)

1,580


1,742


(9%)

 

Quarter






(millions of pesos)

3Q'13

2Q '13

3Q '12

3Q´13 vs
2Q´13

3Q´13 vs
3Q '12

Sales

6,211

6,182

7,153

0%

(13%)

Cost of Sales

5,736

5,506

6,093

4%

(6%)

Gross Profit

475

676

1,060

(30%)

(55%)

Selling, General and Adm. Expenses

286

265

261

8%

10%

Other Income (Expenses), net

0

12

3

(104%)

(115%)

Operating Profit

188

423

802

(56%)

(77%)

EBITDA

472

692

1,033

(32%)

(54%)

Net Income

509

551

576

(8%)

(12%)

Sales Outside Mexico

2,941

2,898

3,188

1%

(8%)

Sales in Mexico

3,270

3,284

3,965

0%

(18%)

Total Sales (Tons)

527

522

558

1%

(6%)

 

Product

Thousand of
Tons

Jan-Sep 2013

Million of
Pesos
Jan-Sep
2013

Average
Price per
Ton

Jan-Sep

2013

Thousand
of Tons

Jan-Sep
2012

Million of
Pesos     
Jan-Sep
2012

Average
Price per
Ton

 Jan-Sep

2012

Commercial Profiles

671

6,504

9,703

755

8,482

11,244

Special Profiles

909

12,332

13,562

987

14,936

15,130






















Total

1,580

18,836

11,925

1,742

23,418

13,447








 

Product

Thousand of
Tons

Jul-Sep 2013

Million of
Pesos
Jul-Sep
2013

Average
Price per
Ton

Jul-Sep
2013

Thousand
of Tons

Apr-Jun
2013

Million of
Pesos
Apr-Jun
2013

Average
Price per
Ton

Apr-Jun
2013

Thousand of
Tons
Jul-Sep
2012

Million of
Pesos
Jul-Sep
2012

Average
Price per
Ton
Jul-Sep
2012

Commercial Profiles

213

2,014

9,438

246

2,380

9,675

 

254

2,818

11,119

Special Profiles

314

4,197

13,370

276

3,802

13,775

 

304

4,335

14,251































Total

527

6,211

11,779

522

6,182

11,843

558

7,153

12,857

 

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 Gonzalez
Mario Moreno Cortez
Grupo Simec, S.A.B. de C.V.
Calzada Lazaro Cardenas 601
44440 Guadalajara, Jalisco, Mexico
52 55 1165 1025
52 33 3770 6734

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



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