Grupo Simec Announces Results of Operations for the First Three Months of 2010
GUADALAJARA, Mexico, April 28 /PRNewswire-FirstCall/ -- Grupo Simec, S.A.B. de C.V. (AMEX: SIM) ("Simec") announced today its results of operations for the three-month period ended March 31, 2010.
Comparative first quarter 2010 vs. first quarter 2009
Net Sales
Net sales increased 26% to Ps. 6,393 million in the first quarter 2010 compared to Ps. 5,081 million in the same period 2009. Shipments of finished steel products increased 19% to 604 thousand tons in the first quarter 2010 compared to 506 thousand tons in the same period 2009. Total sales outside of Mexico in the first quarter 2010 increased 52% to Ps. 3,380 million compared to Ps. 2,222 million in the same period 2009, while total Mexican sales increased 5% from Ps. 2,859 million in the first quarter 2009 to Ps. 3,013 million in the same period 2010. The increase in sales can be explained due to major shipments during the first quarter 2010, compared to the same period of 2009 (a 98 thousand tons increase). The average price of steel products increased 5.4% in the first quarter 2010 compared with the same period of 2009.
Direct Cost of Sales
Direct cost of sales increased 28% to Ps. 5,269 million in the first quarter 2010 from Ps. 4,111 million in the same period 2009. Direct cost of sales as a percentage of net sales represented 81% in the first quarter 2009 compared to 82% in the same period 2010. The average cost of raw materials used to produce steel products in the first quarter of 2010 increased 7% compared to the same period of 2009.
Marginal Profit
Marginal profit in the first quarter 2010 was Ps. 1,124 million compared to Ps. 970 million in the same period 2009, an increase of 16%. Marginal profit as a percentage of net sales in the first quarter 2010 was 18% compared to 19% in the same period 2009. The increase in marginal profit is due to major shipments of 19% during the first quarter 2010 compared with the same period of 2009.
Operating Expenses
Operating expenses fell 12% to Ps. 512 million in the first quarter 2010 compared to Ps. 585 million in the same period 2009, and represented 8% and 12% of net sales in the first quarter 2010 and the same period of 2009 respectively.
Operating Income
Operating income increased 59% to Ps. 612 million for the first quarter 2010 compared to Ps. 385 million in the same period 2009. Operating income as a percentage of net sales was 10% in the first quarter 2010 compared to 8% in the same period 2009. The increase in operating income is due to major shipments of 19% during the first quarter 2010 compared with the same period of 2009.
Comprehensive Financial Cost
Comprehensive financial cost in the first quarter 2009 represented an income of Ps. 60 million compared with an expense of Ps. 24 million in the same period 2010. Net interest expense was Ps. 4 million in the first quarter 2009 compared with a gain of Ps. 3 million in the same period 2010. At the same time, we registered an exchange gain of Ps. 64 million in the first quarter 2009 compared with an exchange loss of Ps. 27 million in the same period 2010, reflecting a 4.55% revaluation of the peso versus the dollar in the first quarter 2010 compared to the same period of 2009.
Other Expenses (Income) net
The company recorded other income net of Ps. 2 million in the first quarter 2009 compared to other income net of Ps. 10 million in the same period 2010.
Income Taxes
Income Taxes recorded a provision of Ps. 7 million in the first quarter 2009 (including the provision of Ps. 167 million of deferred income taxes) compared to Ps. 21 million in the same period of 2010 (including the benefits of Ps. 2 million of deferred income taxes).
Net Income
As a result of the foregoing, net income increased 31% to Ps. 577 million in the first quarter 2010 from Ps. 440 million in the same period 2009.
Liquidity and Capital Resources
As of March 31, 2010, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 3.7 million (accrued interest on March 31, 2010 was U.S. $425,189, or Ps. 5.3 million). As of December 31, 2009, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest on December 31, 2009 was U.S. $418,176).
Comparative first quarter 2010 vs. fourth quarter 2009
Net Sales
Net sales increased 26% from Ps. 5,056 million in the fourth quarter 2009 to Ps. 6,393 million in the first quarter 2010. Sales in tons of finished steel increased 14% to 604 thousand tons in the first quarter 2010 compared with 531 thousand tons in the fourth quarter 2009. The total sales outside of Mexico for the first quarter 2010 increased 18% to Ps. 3,380 million compared with Ps. 2,864 million for the fourth quarter 2009. Total Mexican sales increased 37% from Ps. 2,192 million in the fourth quarter 2009 to Ps. 3,013 million in the first quarter 2010. Prices of finished products sold in the first quarter 2010 increased 11% compared to the fourth quarter 2009.
Direct Cost of Sales
Direct cost of sales was similar in the fourth quarter 2009 from Ps. 5,279 million to Ps. 5,269 million in the first quarter 2010. With respect to sales, in the first quarter 2010, the direct cost of sales represents 82% compared to 104% for the fourth quarter 2009. The average cost of raw materials used to produce steel products decreased 12% in the first quarter 2010 versus the fourth quarter 2009, primarily as a result of decreases in the price of scrap and certain other raw materials.
Marginal (Loss) Profit
Marginal profit for the first quarter 2010 increased to Ps. 1,124 million compared with the loss profit of Ps. 223 million in the fourth quarter 2009. The marginal profit as a percentage of net sales for the first quarter 2010 was 18% compared with a loss of 4% for the fourth quarter of 2009. The increase in marginal profit is due to the decrease in the cost of raw materials used to produce steel products and increase of shipments.
Operating Expenses
Operating expenses increased to Ps. 512 million in the first quarter 2010 versus Ps. 505 million in the fourth quarter 2009. Operating expenses as a percentage of net sales represented 8% during the first quarter 2010 and 10% the fourth quarter 2009.
Operating (Loss) Income
Operating income was Ps. 612 million in the first quarter 2010 compared to Ps. 728 million of operating loss in the fourth quarter 2009. The operating income as a percentage of net sales in the first quarter 2010 was 10% compared to a operating loss of 14% in the fourth quarter 2009. The increase in operating income is due to the decrease in the cost of raw materials used to produce steel products and the major shipments in the first quarter 2010.
Comprehensive Financial Cost
Comprehensive financial cost for the first quarter 2010 represented an expense of Ps. 24 million compared with an expense of Ps. 38 million for the fourth quarter 2009. Net interest income was Ps. 3 million in the first quarter 2010 compared with Ps. 7 million of net interest income in the fourth quarter 2009. At the same time we registered an exchange loss of Ps. 27 million in the first quarter 2010 compared with an exchange loss of Ps. 45 million in the fourth quarter 2009.
Other Expenses (Income) net
The company recorded other income net of Ps. 10 million in the first quarter 2010 compared with other income net of Ps. 27 million for the fourth quarter 2009.
Income Taxes
Income Taxes for the first quarter 2010 was an expense of Ps. 21 million compared to Ps. 727 million of income for the fourth quarter 2009.
Net Income (Loss)
As a result of the foregoing, net income was Ps. 577 million in the first
quarter 2010 compared to Ps. 12 million of net loss in the fourth quarter
2009.
(Millions of pesos) 1Q '10 1Q '09 4Q '09 1Q'10 vs. 1Q'10 vs.
1Q'09 4Q'09
Sales 6,393 5,081 5,056 26% 26%
Cost of Sales 5,269 4,111 5,279 28% 0%
Gross Profit 1,124 970 (223) 16% 604%
Operating Expenses 512 585 505 (12%) 1%
Operating Profit 612 385 (728) 59% 184%
EBITDA 870 660 36 32% 2,317%
Net Profit 577 440 (12) 31% 4,908%
Sales outside Mexico 3,380 2,222 2,864 52% 18%
Sales in Mexico 3,013 2,859 2,192 5% 37%
Total sales (tons) 604 506 531 19% 14%
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.
SOURCE Grupo Simec, S.A.B de C.V.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article