Grupo Simec Announces Results Of Operations For The First Nine Months Of 2021

Rhea-AI Summary

Grupo Simec reported impressive results for the nine months ending September 30, 2021, with net sales surging 66% to Ps. 42,736 million, up from Ps. 25,739 million in 2020. Sales outside of Mexico soared 64%, while domestic sales rose 68%. Gross profit skyrocketed by 144% to Ps. 11,913 million, driven by a 56% increase in average selling prices and a 6% rise in shipment volumes. Net income climbed 139% to Ps. 8,290 million, and operating income jumped 174% to Ps. 10,371 million. However, costs also increased significantly, with expenses and costs rising substantially compared to the previous year.

Positive

• Net sales increased 66% to Ps. 42,736 million.
• Gross profit rose 144% to Ps. 11,913 million.
• Net income climbed 139% to Ps. 8,290 million.
• Operating income increased 174% to Ps. 10,371 million.
• Total shipments grew by 6% to 1,954,000 tons.

Negative

• Cost of sales increased by 48% to Ps. 30,823 million.
• Selling, general and administrative expenses rose 13% to Ps. 1,492 million.

GUADALAJARA, Mexico, Oct. 28, 2021 /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, 2021.

Comparative first nine months of 2021 vs. first nine months of 2020

Net Sales
Net sales of the Company increased to Ps. 42,736 million in the first nine months of 2021 compared to Ps. 25,739 million in the first nine months of 2020. Shipments of finished steel products increased 6% to 1 million 954 thousand tons in the first nine months of 2021 compared to 1million 839 thousand tons in the first nine months of 2020. Total sales outside of Mexico in the first nine months of 2021 increased 64% to Ps. 21,297 million compared to Ps. 12,993 million in the same period of 2020. Mexican sales increased 68% from Ps. 12,746 million in the first nine months of 2020 to Ps. 21,439 million in the same period of 2021. The increase in sales for the first nine months of 2021 is due to an increase in the average selling price in 56% and with a higher volume of shipments compared to the first nine months of 2020 (115 thousand tons equivalent to 6% increase).

Cost of Sales
Cost of sales increased 48% from Ps. 20,855 million in the first nine months of 2020, to Ps. 30,823 million in the first nine months of 2021. Cost of sales as a percentage of net sales represented 72% in the first nine months of 2021 while in the first nine months of 2020 represented 81%. Cost of sales by steel ton increased approximately 39% in the first nine months of 2021 over the same period of 2020 due to a higher price in inputs. Mainly steel scrap.

Gross Profit
Gross profit of the Company for the first nine months of 2021 increased 144% from Ps. 4,884 million in the first nine months of 2020, to Ps. 11,913 million in the first nine months of 2021. Marginal profit as percentage of net sales in the first nine months of 2021 was of 28% while in the first nine months of 2020 was of 19%. The increase in gross profit is due to a better average sale price and a higher volume shipped.

General, Selling and Administrative Expense
Selling, general and administrative expenses increased 13%, to Ps. 1,492 million in the first nine months of 2021 from Ps. 1,316 million in the same period of 2020, selling, general and administrative expenses represented 3% to the 2021 and 5% to the 2020 of the net sales for both periods.

Other Income (Expenses,) net
The Company recorded other expenses net for Ps. 50 million during the first nine months of 2021 while in the same period of 2020 the other income net by this concept was of Ps. 216 million.

Operating Income
Operating income increased 174% to Ps. 10,371 million for the first nine months of 2021 compared to Ps. 3,784 million in the first nine months of 2020. Operating income as percentage of net sales was 24% in the first nine months of 2021 and 15% in the same period of 2020. The increase in operating income is due to a better average price and a higher volume shipped during the nine months ended September 30, 2021 compared to the same period in 2020.

Ebitda
The Ebitda increased 137%, from Ps. 4,742 million in the first nine months of 2020 as a result of a net income of Ps. 3,463 million, less minority stake of Ps. 3 million, plus income taxes of Ps. 1,303 million, less comprehensive financial cost of Ps. 979 million, plus depreciation of Ps. 958 million to Ps 11,257 million in the same period of 2021 as a result of a net income of Ps. 8,290 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 2,305 million, less comprehensive financial cost of Ps. 225 million, plus depreciation of Ps. 886.

Consolidated
Million		Comparative first nine months of 2021 vs first nine months of 2020,
		2021				2020
Net income (loss) attributable to Vale's stockholders			8,290				3,463
Loss attributable to noncontrolling interests			1				(3)
Net income (loss)			8,291				(3,460)
Depreciation, depletion and amortization			886				958
Income taxes			2,305				1,303
Financial results income (loss)			(225)				(979)
EBITDA			11,257				4,742
Items to reconciled adjusted EBITDA
Equity results and other results in associates and joint ventures			0				0
Dividends received and interest from associates and joint ventures (i)			0				0
Impairment and disposal of non-current assets			0				0
Adjusted EBITDA			11,257				4,742

Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2021 represented an income of Ps. 225 million compared with an income of Ps. 979 million for the first nine months of 2020. The net interest expense was of Ps. 35 million for the first nine months of 2021, compared with a net interest income of Ps. 39 million in the same period of 2020. Likewise, we record an exchange income of Ps. 260 million in the first nine months of 2021 compared with an exchange income of Ps. 940 million in the first nine months of 2020 due to the increased slip in the exchange rate of the Ps. against the dollar of 2.82% in the first nine months of 2021.

Income Taxes
The Company recorded an expense of Ps.2,305 million for the net income tax during the first nine months of 2021, (includes a deferred expense tax of Ps. 97 million) compared with an expense of Ps. 1,303 million of income tax for the first nine months of 2020 (includes a deferred expense tax of Ps. 15 million).

Net Income
As a result of the foregoing, the Company recorded an increase in net income of 139% to pass of Ps. 3,463 million in the first nine months of 2020 to Ps. 8,290 million of the same periods of 2021.

Liquidity and Capital Resources
At September 30, 2021, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 6.2 million (accrued interest on September 30, 2021 was U.S. $ 664,000, or Ps. 13.6 million).  At December 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. 6.0 million (accrued interest on December 31, 2020 was U.S. $ 640,000, or Ps. 12.8 million).

Comparative third quarter of 2021 vs. second quarter of 2021
Net Sales
Net sales of the Company decreased to pass of Ps. 15,258 million during the second quarter of 2021 to Ps. 14,122 million in the third quarter of 2021. Shipments of finished steel products decreased to 585 thousand tons in the third quarter of 2021 from 687 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the third quarter of 2021 decreased 12% to get to Ps. 7,767 million compared to Ps. 6,838 million of the second quarter of the same year. Mexican sales in the third quarter of 2021 decreased to Ps. 7,284 million compared to Ps. 7,491 million in the second quarter of the same year. The average selling price increased 9% in the third quarter of 2021 compared to the second quarter of the same year.

Cost of Sales
Cost of sales decreased to P s. 9,913 million in the third quarter of 2021 from Ps.10,854 million in the second quarter of 2021. Cost of sales as a percentage of net sales represented 70% in the third quarter of 2021 and 71% in the second quarter of the same year. The cost of sales by ton increase 7% in the third quarter of 2021 compared to the second quarter of the same year, due mainly to a increase of some supplies for the manufacture of steel.

Gross Profit
Gross profit of the Company for the third quarter of 2021 decreased 4% to pass of Ps. 4,404 million in the second quarter of 2021 to Ps. 4,209 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2021 was of 30% compared to 29% in the second quarter of the same year. The decreased in the gross profit is due to the lowest volume shipped in the third quarter compared to the second quarter of 2021. 

General, Selling and Administrative Expense
Selling, general and administrative expense remained to of Ps. 509 million in the second quarter of 2021 to Ps. 508 million in the third quarter of the same year, and as percentage of net sales represented 3% in the second quarter and 4% in the third quarter of the same year.

Other (Expenses) Income, net
The Company recorded other expenses net for Ps. 20 million during the third quarter of 2021 compared to other expenses net for Ps. 17 million in the second quarter of 2021.

Operating Income
The Operating income was of Ps. 3,681 million in the third quarter of 2021 compared to Ps. 3,878 million in the second quarter of the same year. Operating income as percentage of net sales represented 26% for the third quarter of 2021 and 25% for the second quarter of 2021.

Ebitda
The Ebitda show an decrease of 5%, to pass of Ps 4,170 million in the second quarter of 2021 as a result of a net income of Ps. 2,333 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 1,240 million, plus comprehensive financial cost of Ps. 304 million, plus depreciation of Ps. 292 million to Ps. 3,974 million in the third quarter of the same year as a result of a net income of Ps. 3,313 million, plus income taxes of Ps. 674 million, less comprehensive financial cost of Ps. 306 million, plus depreciation of Ps. 293 million.

Consolidated
Million		Comparative third quarter of 2021 vs second quarter of 2021,
		Third quarter 2021				Second quarter 2021
Net income (loss) attributable to Vale's stockholders			3,313				2,333
Loss attributable to noncontrolling interests							1
Net income (loss)			3,313				2,334
Depreciation, depletion and amortization			293				292
Income taxes			674				1,240
Financial results income (loss)			(306)				304
EBITDA			3,974				4,170
Items to reconciled adjusted EBITDA
Equity results and other results in associates and joint ventures			0				0
Dividends received and interest from associates and joint ventures (i)			0				0
Impairment and disposal of non-current assets			0				0
Adjusted EBITDA			3,974				4,170

Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2021 represented an income of Ps. 306 million compared with an expense of Ps. 304 million for the second quarter of 2021. The comprehensive financial cost is comprised for: the net interest expense of Ps. 9 million in the third quarter of 2021 compared to net interest expense of 9 million in the second quarter of the same year. Also, we record a net exchange income of Ps. 315 million in the third quarter of 2021 compared a net exchange loss of Ps. 295 million in the second quarter of the same year.

Income Taxes
The Company have been recorded Ps. 674 million of expense tax during the third quarter of 2021, (includes a deferred expense tax of Ps. 75 million) compared with the Ps. 1,240 million of expense for the second quarter of the same year, (includes a deferred expense tax of Ps. 30 million).

Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 3,313 million in the third quarter of 2021 compared to a net income of Ps. 2,333 million for the second quarter of 2021.

Comparative third quarter of 2021 vs. third quarter of 2020
Net Sales
Net sales of the Company increased 46% from Ps. 9,643 million during the third quarter of 2020 to Ps. 14,122 million in the third quarter of 2021. Sales in tons of finished steel decreased to 585 thousand tons in the third quarter of 2021 from 676 thousand tons in the third quarter of 2020. Sales outside of Mexico increased 42% from Ps. 4,824 million in the third quarter of 2020 to Ps. 6,838 million in the third quarter of 2021. Mexican sales increased 51% from Ps. 4,819 million in the third quarter of 2020 to Ps. 7,284 million in the third quarter of 2021. The average sales price increased approximately 69% in the third quarter of 2021, compared to the same period of 2020.

Cost of Sales
Cost of sales increased 29% in the third quarter of 2021 compared to the third quarter of 2020 from Ps. 7,682 million in the third quarter of 2020 to Ps. 9,913 million in the third quarter of 2021. With respect to sales, the cost of sales of the third quarter of 2020 represented 80% compared to 70% for the third quarter of 2021. The average cost of raw materials used to produce steel products increased in 49%, due to an increase of raw materials prices. Mainly steel scrap.

Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2021 increased 115% from Ps. 1,961 million in the third quarter of 2020 compared to Ps. 4,209 million in the third quarter of 2021. Gross profit as a percentage of net sales for the third quarter of 2021 was 30% compared to 20% of the third quarter of 2020. The increase in gross profit is due to a better average sales price.

General, Selling and Administrative Expense
The selling, general and administrative expense increased 13% in the third quarter of 2021 to Ps. 508 million in the third quarter of 2021 from Ps. 449 million in the third quarter of 2020. Selling, general and administrative expense as a percentage of net sales represented 4% in the third quarter of 2021 and 5% in the third quarter of 2020.

Other Income (Expenses), net
The company recorded other expense net of Ps. 20 million in the third quarter of 2021 compared with other income net of Ps. 56 million for the third quarter of 2020.

Operating (Loss) Income
Operating income increased from Ps. 1,568 million in the third quarter of 2020 compared to Ps. 3,681 million in the third quarter of 2021, this represent 135% of increase between both quarters. The operating income as a percentage of net sales was 26% for the third quarter of 2021 compared to 16% for the third quarter of 2020. The increase in the operating income is due to higher average price.

Ebitda
The Ebitda of the Company increased 110% from Ps 1,891 million in the third quarter of 2020 as a result of a net income of Ps. 1,003 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 352 million, plus comprehensive financial cost of Ps. 214 million, plus depreciation of Ps. 323 million to Ps. 3,974 million of the same period of 2021, as a result of a net income of Ps. 3,313 million, plus income taxes of Ps. 674 million, less comprehensive financial cost of Ps. 306 million, plus depreciation of Ps. 293 million.

Consolidated
Million		Comparative third quarter of 2021 vs third quarter of 2020,
		Third quarter 2021				Third quarter 2020
Net income (loss) attributable to Vale's stockholders			3,313				1,003
Loss attributable to noncontrolling interests							(1)
Net income (loss)			3,313				1,002
Depreciation, depletion and amortization			293				323
Income taxes			674				352
Financial results income (loss)			(306)				214
EBITDA			3,974				1,891
Items to reconciled adjusted EBITDA
Equity results and other results in associates and joint ventures			0				0
Dividends received and interest from associates and joint ventures (i)			0				0
Impairment and disposal of non-current assets			0				0
Adjusted EBITDA			3,974				1,891

Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2021 represented a net income of Ps. 306 million compared with an expense of Ps. 214 million for the third quarter of 2020. The comprehensive financial cost is comprised for: the net interest expense of Ps. 6 million in the third quarter of 2020, compared to a net interest expense of Ps. 9 million for the same period of 2021. Also record an exchange loss of Ps. 208 million in the third quarter of 2020 and an exchange income of Ps. 315 million in the third quarter of 2021.

Income Taxes
The company recorded an expense tax for Ps. 674 million in the third quarter of 2021, (includes a deferred expense tax of Ps. 75 million) compared to an expense tax of Ps. 352 million for the third quarter of 2020, (includes an accrual of deferred income tax of Ps. 18 million).

Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 3,313 million in the third quarter of 2021 compared to a net income of Ps. 1,003 million for the same period of 2020.

(millions of pesos)	Jan - Sep '21		Jan - Sep '20		Year 21 vs  '20
Sales	42,736		25,739		66%
Cost of Sales	30,823		20,855		48%
Gross Profit	11,913		4,884		144%
Selling, General and Administrative Expense	1,492		1,316		13%
Other Income (Expenses), net	(50)		216		(123%)
Operating Profit	10,371		3,784		174%
EBITDA	11,257		4,742		137%
Net income	8,290		3,463		139%
Sales Outside Mexico	21,297		12,993		64%
Sales in Mexico	21,439		12,746		68%
Total Sales (Tons)	1,954		1,839		6%
Cost by ton	15,774		11,340		39%

     

Quarter
(millions of pesos)	3Q'21	2Q '21	3Q '20	3Q´21vs 2Q´21	3Q´21 vs 3Q '20
Sales	14,122	15,258	9,643	(7%)	46%
Cost of Sales	9,913	10,854	7,682	(9%)	29%
Gross Profit	4,209	4,404	1,961	(4%)	115%
Selling, General and Adm. Expenses	508	509	449	0%	13%
Other Income (Expenses), net	(20)	(17)	56	18%	(136%)
Operating Profit	3,681	3,878	1,568	(5%)	135%
EBITDA	3,974	4,170	1,891	(5%)	110%
Net Income	3,313	2,333	1,003	42%	230%
Sales Outside Mexico	6,838	7,767	4,824	(12%)	42%
Sales in Mexico	7,284	7,491	4,819	(3%)	51%
Total Sales (Tons)	585	687	676	(15%)	(13%)
Cost per Tons	16,945	15,799	11,364	7%	49%

   

Product	Thousands of Tons Jan-Sep 2021	Millions of Pesos          Jan-Sep 2021	Average Price per Ton Jan-Sep 2021	Thousands of Tons Jan – Sep 2020	Millions of Pesos      Jan- Sep 2020	Average Price per Ton  Jan-Sep 2020
Special Profiles	714	17,116	23,972	571	9,695	16,979
Commercial Profiles	1,240	25,620	20,661	1,268	16,044	12,653
Total	1,954	42,736	21,871	1,839	25,739	13,996

    

Product	Thousands of Tons Jul-Sep 2021	Millions of Pesos     Jul-Sep 2021	Average Price per Ton Jul-Sep 2021	Thousands of Tons Apr-Jun 2021	Millions of Pesos     Apr-Jun 2021	Average Price per Ton Apr-Jun 2021	Thousands of Tons          Jul-Sep 2020	Millions of Pesos           Jul-Sep 2020	Average Price per Ton          Jul-Sep 2020
Special Profiles	225	5,976	26,560	242	5,900	24,380	215	3,551	16,516
Commercial Profiles	360	8,146	22,628	445	9,358	21,029	461	6,092	13,215
Total	585	14,122	24,140	687	15,258	22,210	676	9,643	14,265

Contact: José Luis Tinajero
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.

FAQ

What were Grupo Simec's 2021 net sales figures?

Grupo Simec's net sales for the first nine months of 2021 reached Ps. 42,736 million.

How much did Grupo Simec's net income increase in 2021?

Net income for Grupo Simec increased by 139% to Ps. 8,290 million in 2021.

What is Grupo Simec's stock symbol?

Grupo Simec is listed under the stock symbol 'SIM'.

What were the gross profit figures for Grupo Simec in 2021?

Grupo Simec's gross profit surged 144% to Ps. 11,913 million in 2021.

How much did Grupo Simec's cost of sales increase in 2021?

Cost of sales for Grupo Simec increased by 48% to Ps. 30,823 million in 2021.