Grupo Simec Announces Results Of Operations For The First Six Months Of 2015

Jul 23, 2015, 17:38 ET from Grupo Simec, S.A.B. de C.V.

GUADALAJARA, Mexico, July 23, 2015 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the sixth-month period ended June 30, 2015.

Comparative first six months of 2015 vs. first six months of 2014

Net Sales Net sales of the Company maintained from Ps. 13,204 million in the first half of 2014 to Ps. 13,204 million in the first half of 2015. Shipments of finished steel products increased 5% from 1,066 thousand tons in the first half of 2014 to 1,118 thousand tons in the first half of 2015. Total sales outside of Mexico in the first half of 2015 decreased 11% to Ps. 5,879 million compared to Ps. 6,598 million in the first half of 2014. Mexican sales increased 11% from Ps. 6,606 million in the first half of 2014 to Ps. 7,324 million in the first half of 2015. Sales were flat for the first half of 2015 compared to the first half of 2014, is due to the combined of decreased in the average sales price of 5% and increase in the volume of shipments approximately of 52 thousand tons that represent a 5%.

Cost of Sales Cost of sales decreased 5% from Ps. 12,071 million in the first half of 2014, to Ps. 11,476 million in the first half of 2015. Cost of sales as a percentage of net sales represented 87% in the first half of 2015 while in the first half of 2014 represented 91%. Cost of sales decreased due to the higher volume shipment and the price of certain raw materials.

Gross Profit Gross profit of the Company for the first half of 2015 increased 53% from Ps. 1,133 million in the first half of 2014, to Ps. 1,728 million in the first half of 2015. Gross profit as percentage of net sales in the first half of 2015 was of 13% while in the first half of 2014 was of 9%. The gross profit between both periods is given by a higher volume of shipments and improved costs of certain raw materials.

Selling, General and Administrative Expense Selling, general and administrative expense increased 15%, from Ps. 555 million in the first half of 2014 to Ps. 641 million in the same period 2015, selling, general and administrative expense represented 5% of the net sales of the first half of 2015 and 4% of net sales in the first half of 2014.

Other Income (Expenses,) net The Company recorded other income net for Ps. 8 million in the first half of 2015 million compared to Ps. 9 million in the same period of 2014.

Operating Income Operating income increased 87% from Ps. 587 million for the first half of 2014 compared to Ps. 1,095 million in the first half of 2015. Operating income as percentage of net sales was 8% in the first half of 2015 compared to 4% in the same period of 2014. The increase in operating income is due to the average cost of production.

Ebitda The Ebitda of the first half of 2015, increased in Ps 574 million or 53% compared to first half of 2014, due to the higher volume shipment and a decrease in the average cost of production. The Ebitda passed of Ps. 1,084 million in the first half of 2014 to Ps. 1,658 million in the first half of 2015.

Comprehensive Financial Cost Comprehensive financial cost for the first half of 2015 represented an income of Ps. 69 million compared with of Ps. 28 million of expense for the first half of 2014. The comprehensive financial cost is comprised by the exchange gain of Ps. 74 million in the first half of 2015 compared with an exchange loss of Ps. 13 million in the first half of 2014. Also the Company recorded a net expense interest of Ps. 5 million for the first half of 2015 compared with a net expense interest of Ps.15 million in 2014.

Income Taxes The Company recorded an expense of Ps. 502 million for the net income tax during the first half of 2015, (comprised for a current income tax of Ps. 503 million and an income for deferred income tax of Ps. 1 million) compared with an income of Ps. 35 million of income tax for the first half of 2014 (comprised for a current income tax of Ps. 15 million and an income for deferred income tax of Ps. 50 million).

Net Income As a result of the foregoing, the Company recorded an increase in net income of 18%  to pass of Ps. 722 million in the first half of 2014 to Ps. 853 million of the same period of 2015.

Comparative second quarter of 2015 vs. first quarter of 2015

Net Sales Net sales of the Company decreased 9% in the second quarter of 2015 compared to the first quarter of the same period, to pass of Ps. 6,897 million during the first quarter of 2015 to Ps. 6,307 million in the second quarter of 2015. Shipments of finished steel products decreased 5% from 573 thousand tons in the first quarter of 2015 to 545 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the second quarter of 2015 decreased 13% to get to Ps. 2,733 million compared to Ps. 3,146 million of the first quarter of the same year. Mexican sales show a decrease of 5% from Ps. 3,751 million in the first quarter of 2015 to Ps. 3,573 million in the second quarter of the same year. The sales outside of Mexico did not develop better in the second quarter of 2015 compared to the first quarter of the same year.

Cost of Sales Cost of sales decreased 9% from Ps. 6,022 million in the first quarter of 2015 to Ps. 5,454 million in the second quarter of 2015. Cost of sales as a percentage of net sales represented 87% for the first quarter of 2015 compared to 86% in the second quarter of the same year, the average cost of sales by ton record a decrease between both quarters of 9%.

Gross Profit Gross profit of the Company for the second quarter of 2015 decreased 3% to pass of Ps. 875 million in the first quarter of 2015 to Ps. 853 million in the second quarter of same year. Gross profit as a percentage of net sales represented 13% for the first quarter of 2015 compared to 14% in the second quarter of the same year. The gross profit in the second quarter of 2015 is caused by a better average cost of sales.

Selling, General and Administrative Expense Selling, general and administrative expense increase 35%, from Ps. 273 million in the first quarter of 2015 to Ps. 368 million in the second quarter of the same year, and as percentage of net sales represented 6% in the second quarter of 2015 compared to 4% of the first quarter of the same year.

Other (Expenses) Income, net The Company recorded other income net for Ps. 5 million during the second quarter of 2015 compared to other income net for Ps. 3 million in the first quarter of 2015.

Operating Income Operating income decreased 19%, of Ps. 605 million in the first quarter of 2015 compared to Ps. 490 of the second quarter of the same year. Operating income as percentage of net sales was 9% for the first quarter compared to 8% for the second quarter of the same year. The operating income is due mainly to an increase in the selling general and administrative expenses of the second quarter 2015.

Ebitda The Ebitda in the second quarter of 2015 show a decrease of 11% compared to the first quarter of the same year, due to previously mentioned. The Ebitda, of the second quarter was of Ps. 782 million versus Ps. 876 million in the first quarter of 2015.

Comprehensive Financial Cost Comprehensive financial cost of the Company in the second quarter of 2015 represented an income of Ps. 50 million compared with an income of Ps. 19 million for the first quarter of 2015. The comprehensive financial cost is comprised for the net interest expense, of Ps. 1 million in the second quarter of 2015, while in the first quarter was of Ps. 4 million. Also we record a net exchange gain of Ps. 51 million in the second quarter of 2015 compared a net exchange gain of Ps. 23 million in the first quarter of the same year.

Income Taxes The Company have been recorded an expense of Ps. 236 million of income tax during the second quarter of 2015, (comprised for an income by current income tax of Ps. 228 million and an expense for deferred tax of Ps. 8 million) compared with the Ps. 267 million of expense for the first quarter of the same year, (comprised for a current income tax of Ps. 275 million and of an income for deferred tax of Ps. 8 million).

Net Income As a result of the foregoing, the Company recorded a decrease of 7% from a net income of Ps. 441 million in the first quarter of 2015 compared to a net income of Ps. 412 million for the second quarter of 2015.

Liquidity and Capital Resources As of June 30, 2015, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.7 million (accrued interest on June 30, 2015 was U.S. $570,000, or Ps. 8.9 million).  As of December 31, 2014, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.4 million (accrued interest on December 31, 2014 was U.S. $556,000, or Ps. 8.2 million).

Comparative second quarter of 2015 vs. second quarter of 2014

Net Sales Net sales of the Company decreased 5% from Ps. 6,622 million during the second quarter of 2014 to Ps. 6,307 million in the second quarter of 2015. Sales in tons of finished steel increased 2% from 536 thousand tons in the second quarter of 2014 compared with 545 thousand tons in the second quarter of 2015. Sales outside of Mexico in the second quarter of 2015 decreased 20% from Ps. 3,423 million in the second quarter of 2014 to Ps. 2,733 million in the second quarter of 2015. Mexican sales increased 12% from Ps. 3,199 million in the second quarter of 2014 to Ps. 3,573 million in the second quarter of 2015. The decrease in sales in the second quarter of 2015 compared to the second quarter of 2014 is due to a decrease in the average sales price of 6% and an increase in the volume of shipments approximately of 9 thousand of tons.

Cost of Sales Cost of sales decreased 9% in the second quarter of 2015 compared to the second quarter of 2014 from Ps. 6,014 million in the second quarter of 2014 to Ps. 5,454 million in the second quarter of 2015. With respect to sales, the cost of sales of the second quarter of 2015 represented 86% compared to 91% for the second quarter of 2014. The average cost of sales by ton of steel products decreased 11% in the second quarter of 2015 versus the second quarter of 2014, due to the cost of certain raw materials.

Gross (Loss) Profit Gross profit of the Company for the second quarter of 2015 amount to Ps. 853 million compared to Ps. 608 million in the second quarter of 2014, this represented an increase of 40% between both periods. Gross profit as a percentage of net sales for the second quarter of 2015 was 14% compared to 9% of the second quarter of 2014. The increase in gross profit is mainly due to a lower average cost of sales and a higher volume of shipments in the second quarter of 2015 compared with the second quarter of 2014.

Selling, General and Administrative Expense The selling, general and administrative expenses increased 31% in the second quarter of 2015 from Ps. 281 million in the second quarter of 2014 to Ps. 368 million in the second quarter of 2015. Selling, general and administrative expense as a percentage of net sales represented 6% in the second quarter of 2015 compared to 4% of the second quarter of 2014.

Other Income (Expenses), net The company recorded other income net of Ps. 5 million in the second quarter of 2015 compared with other income net of Ps. 6 million for the second quarter of 2014.

Operating (Loss) Income Operating income amounted to Ps. 490 million in the second quarter 2015 compared to Ps. 333 million in the second quarter of 2014, this represent 47% of increase between both quarters. The operating income as a percentage of net sales in the second quarter of 2015 was 8% and 5% in the second quarter of 2014. The increase in the operating income is due to a better average cost of sales in the second quarter of 2015 compared to the same period of 2014.

Ebitda The Ebitda of the second quarter of 2015 increased compared to the same period of 2014 in 34% from Ps 582 million in the second quarter of 2014 to Ps. 782 million of the same period of 2015, this is due to the above explained in the operating income.

Comprehensive Financial Cost Comprehensive financial cost of the Company for the second quarter of 2015 represented a net income of Ps. 50 million compared with an expense of Ps. 10 million for the second quarter of 2014. The comprehensive financial cost is comprised for the net interest expense of Ps. 1 million in the second quarter of 2015, compared to a net interest expense of Ps. 10 million for the same period of 2014. Also record an exchange gain of Ps. 51 million in the second quarter of 2015 and an exchange loss of Ps. 0 million in the second quarter of 2014.

Income Taxes The company recorded an accrual for expense tax of Ps. 236 million in the second quarter of 2015, (comprised for an expense by current income tax of Ps. 228 million and an expense for deferred tax of Ps. 8 million) compared to an accrual of Ps. 34 million for income tax for the second quarter of 2014, (comprised for an income by current income tax of Ps. 7 million and an income for deferred tax of Ps. 27 million).

Net Income (Loss) As a result of the foregoing, the Company recorded a net income of Ps. 412 million in the second quarter of 2015 compared to Ps. 396 million for the second quarter of 2014, a decrease of 4% between both quarters.

(millions of pesos)

1H '15

1H '14

Year 15 vs  '14

Sales

13,204

13,204

0%

Cost of Sales

11,476

12,071

(5%)

Gross Profit

1,728

1,133

53%

Selling, General and Administrative Expense

641

555

15%

Other Income (Expenses), net

8

9

(11%)

Operating Profit

1,095

587

87%

EBITDA

1,658

1,084

53%

Net income 

853

722

18%

Sales Outside Mexico

5,879

6,598

(11%)

Sales in Mexico

7,324

6,606

11%

Total Sales (Tons)

1,118

1,066

5%

 

Quarter

(millions of pesos)

2Q '15

1Q '15

2Q '14

2Q '15vs 1Q '15

2Q '15 vs 2Q '14

Sales

6,307

6,897

6,622

(9%)

(5%)

Cost of Sales

5,454

6,022

6,014

(9%)

(9%)

Gross Profit

853

875

608

(3%)

40%

Selling, General and Adm. Expenses

368

273

281

35%

31%

Other Income (Expenses), net

5

3

6

67%

(17%)

Operating Profit

490

605

333

(19%)

47%

EBITDA

782

876

582

(11%)

34%

Net Income

412

441

396

(7%)

4%

Sales Outside Mexico

2,733

3,146

3,423

(13%)

(20%)

Sales in Mexico

3,573

3,751

3,199

(5%)

12%

Total Sales (Tons)

545

573

536

(5%)

2%

 

Product

Thousands of Tons

Jan-Jun 2015

Millions of Pesos Jan-Jun 2015

Average Price per Ton

Jan-Jun

2015

Thousands of Tons

Jan – Jun 2014

Millions of Pesos Jan- Jun 2014

Average Price per Ton

 Jan-Jun

2014

Commercial Profiles

583

5,637

9,669

432

4,150

9,606

Special Profiles

535

7,567

14,144

634

9,054

14,281

Total

1,118

13,204

11,810

1,066

13,204

12,386

 

Product

Thousands of Tons

Apr-Jun 2015

Millions of Pesos Apr-Jun 2015

Average Price per Ton

Apr-Jun

2015

Thousands of Tons

Jan – Mar

2015

Millions of Pesos Jan- Mar

2015

Average Price per Ton

Jan-Mar

2015

Thousands of Tons Apr-Jun

2014

Millions of Pesos Apr-Jun 2014

Average Price per Ton Apr-Jun

2014

Commercial Profiles

283

2,747

9,706

300

2,890

9,633

222

2,113

9,518

Special Profiles

262

3,560

13,588

273

4,007

14,678

314

4,509

14,360

Total

545

6,307

11,572

573

6,897

12,037

536

6,622

12,354

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.



RELATED LINKS

http://www.gsimec.com.mx