Grupo Simec Announces Results of Operations for the Twelve Month Period Ended December 31, 2012

GUADALAJARA, Mexico, April 11, 2013 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations Audited for the twelve-month period ended December 31, 2012 and December 31, 2011.

Twelve-Month Period Ended December 31, 2012 compared to Twelve-Month Period Ended December 31, 2011

Net Sales

Net sales increased 1% by the combination of higher sales of Special Bars "SBQ", shipments of less finished steel products by 1% and the average sales price per ton of 2% compared the same period of 2011, the sale rose from Ps. 29,270 millions in the twelve-month period ended December 31, 2011 to Ps. 29,524 millions in the same period of 2012. Shipments of finished steel products decrease 1% to 2 million 262 thousand tons in the twelve-month period ended December 31, 2012 compared to 2 million 288 thousand tons in the same period of 2011. Total sales outside of Mexico in the twelve-month period ended December 31, 2012 decreased 12% to Ps. 13,774 million compared with Ps.15,654 millions  in the same period of 2011. Total sales in Mexico increased 16% from Ps. 13,616 millions in the twelve-month period ended December 31, 2011 to Ps. 15,750 millions in the same period of 2012.  The increase in sales is due to the increase of the average sales price of 2%.

Cost of Sales

Cost of sales increased 2% from Ps. 25,563 millions in the twelve-month period ended December 31, 2011 to Ps. 25,960 millions in the same period of 2012. Cost of sales as a percentage of net sales in the twelve months ended on December 31 of 2012 and 2011, cost of sales represented 88% on both periods. The average cost of finished steel produced in the twelve-month period ended December 31, 2012 compared to the same period of 2011 increased approximately 3% by higher sales of SBQ steel.

Gross Profit

Gross profit of the Company in the twelve-month period ended December 31, 2012 was of Ps. 3,564 million compared to Ps. 3,707 millions in the same period of 2011. Gross profit as a percentage of net sales represented 12% in the twelve-month period ended December 31, 2012and 13% in the same period of 2011. The decrease in the gross profit is due to a cost of sales major over the products shipped   in 2012, compared with the same period of 2011.

Operating Expenses

Selling, general and administrative expenses increased 17% from Ps. 1,050 millions in the twelve-month period ended December 31, 2011 to Ps. 1,228  million in the same period of  2012, representing 4% respect of net sales in both periods.

Other Expenses (Income) net

The company recorded other net expenses of Ps. 114 millions in the twelve-month period ended December 31, 2011 compared to other incomes net of Ps. 181 millions in the same period of 2012.

Operating Income

Operating income decreased 1% from Ps. 2,543 million for the twelve-month period ended December 31, 2011 to Ps. 2,517 millions in the same period of 2012. Operating income as a percentage of net sales was 9% in the twelve-month period ended December 31, 2011, and 8% in the same period of  2012. The decrease in operating income is due to an increase in selling, general and administrative expenses.

EBITDA

The EBITDA of the Company increase 1% from Ps. 3,493 millions in the twelve-month prior ended December 31, of 2011, to Ps. 3,529 millions in the same period of 2012.

Comprehensive Financial Cost 

Comprehensive financial cost in the twelve-month period ended December 31, 2012 represented a net expense of Ps. 509 million compared with a net income of Ps. 584 millions in the same period of 2011. The net interest was an income of Ps 1 million in 2012 compared with a net interest of Ps. 2 millions in the twelve-month period ended December 31, 2011. As a result, we registered a net exchange loss of Ps. 510 millions in the twelve-month period ended December 31, 2012 compared with a net exchange gain of Ps. 582 millions in the same period of 2011, reflecting a 7% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2012 compared to December 31, 2011.

Income Taxes

The Company have recorded an expense net income tax of Ps. 54 millions in the twelve-month period ended December 31, 2012 (including the expense of deferred income tax of Ps. 70 millions) compared with an expense net of Ps. 149 millions in the same period of 2011 (including the expense tax deferred of Ps. 236 millions).

Net Income (loss) (After Minority Interest)

As a result of the foregoing, net income decreased by 28% from Ps. 2,892 millions in the twelve-month period ended December 31, 2011 to a net income of Ps. 2,070 millions in the same period of 2012. 

Liquidity and Capital Resources

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, Ps. 3.9 million (accrued interest on December 31, 2012 was U.S. $499,837 or Ps. 6.5 millions).  As of December 31, 2011, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 4.2 million (accrued interest on December 31, 2011 was U.S. $472,824, or Ps. 6.6 millions).

Comparative fourth quarter 2012 vs third quarter 2012

Net Sales

Net sales decreased 15% from Ps. 7,153 millions in the third quarter of 2012 to Ps. 6,106 million for the fourth quarter of 2012. Sales in tons decreased from 558 thousand ton in the third quarter of 2012 to 520 thousand ton in the fourth quarter of the same period a decrease of 7%. Total sales outside of Mexico for the fourth quarter of 2012 decreased 32% from Ps. 3,188 millions in the third quarter to Ps. 2,166 millions in the four quarter of 2012. Sales in Mexico diminish to 3,940 million in the fourth quarter of 2012 compared Ps. 3,965 millions in the third quarter of 2012 an decrease of 1%. Prices of finished products sold in the fourth quarter of 2012 decreased approximately 8% compared to the third quarter of the same period.

Cost of Sales

Cost of sales was of Ps. 6,007 millions in the fourth quarter of 2012 compared to Ps. 6,093 million for the third quarter of 2012. With respect to sales, in the fourth quarter of 2012, the cost of sales represented 98% for the fourth quarter of 2012 while for the third quarter of 2012 was of 85%. The average cost of sales by ton increased 6% in the fourth quarter of 2012 versus the third quarter of 2012.

Gross Profit

Gross profit of the Company for the fourth quarter of 2012 decreased 91% to Ps. 99 million compared to Ps. 1,060 millions in the third quarter of 2012. The gross profit as a percentage of net sales for the fourth quarter was of 2% and 15% for the third quarter of 2012.

Operating Expenses

Selling, general and administrative expenses increased 39% to Ps. 362 millions in the fourth quarter of 2012 compared to Ps. 261 million for the third quarter of 2012. Selling, general and administrative expenses as a percentage of net sales represented 6% during the fourth quarter of 2012 4% for the third quarter of 2012.

Other Expenses (Income) net

The company recorded other net income of Ps. 187 millions in the fourth quarter of 2012 compared to other net income of Ps. 3 million for the third quarter of 2012.

Operating (Loss) Income

Operating loss was of Ps 76 million in the fourth quarter of 2012 compared to an operating income of Ps. 802 millions in the third quarter of 2012. The operating loss as a percentage of net sales in the fourth quarter of 2012 represented -4% while the operating income for the third quarter of 2012 represented 11%.

EBITDA

The EBITDA was Ps. 1,033 millions in the third quarter of 2012 compared to Ps. 200 million for the fourth quarter of 2012 due to the above explained.

Comprehensive Financial Income (Cost)

Comprehensive financial cost for the fourth quarter for 2012 was a net loss of Ps. 295 million compared with a net loss of Ps. 187 million for the third quarter of 2012. The net interest income in the third and fourth quarter of 2012 was of Ps. zero. At the same time we registered an exchange net loss of Ps. 187 millions in the third quarter of 2012 compared with an exchange net loss of Ps. 295 millions in the fourth quarter of 2012.

Income Taxes

Income Taxes for the fourth quarter of 2012 had an expense net income tax of Ps. 89 million (including an expense tax deferred for Ps. 105 millions) compared to an expense of Ps. 14 million for the third quarter of 2012, (including an expense tax deferred of Ps. 29 millions).

Net Income (loss) (After Minority Interest)

As a result of the foregoing, the Company had a net loss of Ps. 283 millions in the fourth quarter of 2012 compared to Ps. 576 million of net income in the third quarter of 2012.

Comparative fourth quarter 2012 vs fourth quarter 2011

Net Sales

Net sales decreased 22% from Ps. 7,836 million for the fourth quarter of 2011 to Ps. 6,106 million for the fourth quarter of 2012. Sales in tons of finished steel in the fourth quarter of 2011 were 558 thousand tons versus to 520 thousand tons in the fourth quarter of 2012. Total sales outside of Mexico decrease 45% from Ps. 3,958 million for the fourth quarter of 2011 to Ps. 2,166 millions in the fourth quarter of 2012. Sales in Mexico increased 2% from Ps. 3,878 millions in the fourth quarter of 2011 to Ps. 3,940 millions in the fourth quarter of 2012. The average sales prices of finished products sold in the fourth quarter of 2012 decreased approximately 16% compared to the fourth quarter of 2011.

Cost of Sales

Cost of sales decreased 9% from Ps. 6,629 millions in the fourth quarter of 2011 compared to Ps. 6,007 million for the fourth quarter of 2012. With respect to sales, in the fourth quarter of 2012, the cost of sales represented 98% compared to 85% for the fourth quarter of 2011. The average cost of steel products decreased 3% in the fourth quarter of 2012 versus the fourth quarter of 2011.

Gross Profit

Gross profit for the fourth quarter of 2012 decreased 92% from Ps. 1,207 millions in the fourth quarter of 2011 compared to an income of Ps. 99 millions in the fourth quarter of 2012. The gross profit as a percentage of net sales for the fourth quarter of 2012 was 2% compared with 15% for the fourth quarter of 2011.

Operating Expenses

Selling, general and administrative expenses increased 2% from Ps. 356 millions in the fourth quarter of 2011 compared to Ps. 362 million for the fourth quarter of 2012. Selling, general and administrative expenses as a percentage of net sales represented 6% during the fourth quarter of 2012 and 5% during the fourth quarter of 2011.

Other Expenses (Income) net

The company recorded other net expense of Ps. 135 millions in the fourth quarter of 2011 compared with other incomes net of Ps. 187 million for the fourth quarter of 2012.

Operating (Loss) Income

Operating loss was of Ps. 76 millions in the fourth quarter of 2012 compared to an operating income of Ps. 716 millions in the fourth quarter of 2011. The operating loss as a percentage of net sales in the fourth quarter of 2012 was -4% compared to 9% of operating income in the fourth quarter of 2011.

EBITDA

The EBITDA from the fourth quarter of 2012 decreased 76% from Ps 843 million in the fourth quarter of 2011 to Ps 200 million in the fourth quarter of 2012.

Comprehensive Financial Income (Cost)

Comprehensive financial cost for the fourth quarter of 2012 was a net loss of Ps. 295 million compared with an income of Ps 261 million in the fourth quarter of 2011. Net interest expense was Ps. zero in the fourth quarter of 2012 compared with a net expense of Ps. 5 millions in the fourth quarter of 2011. At the same time we registered a net exchange loss of Ps. 295 millions in the fourth quarter of 2012 compared with an exchange gain of Ps. 265 millions in the fourth quarter of 2011.

Income Taxes

The Company  recorded an income taxes for the fourth quarter of 2012 was an expense of Ps. 89 million (including an expense of deferred income tax of Ps 105 millions),  compared to a net income of Ps. 293 million for the fourth quarter of 2011, (including an income of deferred income tax of Ps. 108 millions).

Net Income (loss) (After Minority Interest)

As a result of the foregoing, the Company recorded a net loss of Ps. 283 millions in the fourth quarter of 2012 compared to Ps. 1,314 million of net income in the fourth quarter of 2011.

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.