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GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST QUARTER, OF 2024, ENDED MARCH 31, 2024

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Grupo Simec, S.A.B. de C.V. (NYSE: SIM) announced its first-quarter 2024 financial results, showing a decrease in net sales, gross profit, and operating income compared to the same period in 2023. The company's sales outside of Mexico decreased by 29%, while Mexican sales dropped by 45%. Despite the decrease in sales, the company managed to maintain a gross profit margin of 25%. EBITDA decreased by 44% to Ps. 1,668 million. The net income for the first quarter of 2024 increased by 41% compared to the same period in 2023.
Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ha annunciato i risultati finanziari del primo trimestre del 2024, evidenziando una diminuzione nelle vendite nette, nel profitto lordo e nel reddito operativo rispetto allo stesso periodo del 2023. Le vendite al di fuori del Messico sono diminuite del 29%, mentre le vendite in Messico sono calate del 45%. Nonostante la riduzione delle vendite, l'azienda è riuscita a mantenere un margine di profitto lordo del 25%. L'EBITDA è diminuito del 44% raggiungendo 1.668 milioni di Ps. Il reddito netto per il primo trimestre del 2024 è aumentato del 41% rispetto allo stesso periodo del 2023.
Grupo Simec, S.A.B. de C.V. (NYSE: SIM) anunció sus resultados financieros del primer trimestre de 2024, mostrando una disminución en ventas netas, beneficio bruto e ingreso operativo en comparación con el mismo período de 2023. Las ventas fuera de México disminuyeron en un 29%, mientras que las ventas en México cayeron un 45%. A pesar de la disminución en las ventas, la compañía logró mantener un margen de beneficio bruto del 25%. El EBITDA se redujo en un 44% a Ps. 1.668 millones. El ingreso neto para el primer trimestre de 2024 aumentó en un 41% en comparación con el mismo período del año anterior.
Grupo Simec, S.A.B. de C.V. (NYSE: SIM)는 2024년 첫 번째 분기 재정 결과를 발표했는데, 2023년 동기 대비 순매출, 총이익, 운영 소득이 감소했다고 합니다. 멕시코 외 지역의 매출은 29% 감소했으며, 멕시코 내 매출은 45% 감소했습니다. 매출이 감소했음에도 불구하고 회사는 25%의 총이익 마진을 유지했습니다. EBITDA는 44% 감소하여 1,668백만 페소가 되었습니다. 2024년 첫 번째 분기의 순이익은 2023년 같은 기간에 비해 41% 증가했습니다.
Grupo Simec, S.A.B. de C.V. (NYSE: SIM) a annoncé ses résultats financiers pour le premier trimestre de 2024, montrant une baisse des ventes nettes, du profit brut et du revenu d'exploitation par rapport à la même période en 2023. Les ventes hors Mexique ont diminué de 29%, tandis que les ventes mexicaines ont chuté de 45%. Malgré la baisse des ventes, la société a réussi à maintenir une marge de profit brut de 25%. L'EBITDA a diminué de 44% à Ps. 1 668 millions. Le bénéfice net pour le premier trimestre de 2024 a augmenté de 41% par rapport à la même période en 2023.
Grupo Simec, S.A.B. de C.V. (NYSE: SIM) hat die Finanzergebnisse für das erste Quartal 2024 bekannt gegeben, welche einen Rückgang bei den Nettoumsätzen, Bruttoprofit und dem Betriebsergebnis im Vergleich zum gleichen Zeitraum in 2023 zeigen. Die Verkäufe außerhalb von Mexiko sind um 29% gesunken, während die Verkäufe in Mexiko um 45% zurückgegangen sind. Trotz des Rückgangs der Verkaufszahlen konnte das Unternehmen eine Bruttogewinnmarge von 25% beibehalten. Das EBITDA sank um 44% auf 1.668 Millionen Ps. Der Nettogewinn für das erste Quartal 2024 stieg im Vergleich zum Vorjahreszeitraum um 41%.
Positive
  • Net sales of Grupo Simec decreased by 39% from Ps. 12,825 million in the first quarter of 2023 to Ps. 7,885 million in the first quarter of 2024.
  • Gross profit decreased by 37% from Ps. 3,207 million in the first quarter of 2023 to Ps. 2,009 million in the first quarter of 2024.
  • Operating income decreased by 47% from Ps. 2,678 million in the first quarter of 2023 to Ps. 1,419 million in the first quarter of 2024.
  • EBITDA decreased by 44% from Ps. 2,959 million in the first quarter of 2023 to Ps. 1,668 million in the first quarter of 2024.
  • Net income increased by 41% from Ps. 1,033 million in the first quarter of 2023 to Ps. 1,456 million in the first quarter of 2024.
Negative
  • The decrease in sales volume and average selling price per ton impacted the company's financial performance negatively.
  • Operating income as a percentage of net sales decreased from 21% in the first quarter of 2023 to 18% in the first quarter of 2024.

Insights

The recent financial disclosures from Grupo Simec reflect several key indicators that deserve attention from a stakeholder's perspective. A decline in net sales by 39% juxtaposed with the previous year and an 11% decline from the preceding quarter indicates a contraction in the company's revenue-generating capability. This contraction is mainly attributed to a decrease in volume shipped, alongside a decrease in the average selling price of steel products.

Cost of sales also experienced a downturn, though proportionally aligned with net sales as seen through a consistent cost of sales to net sales ratio of 75%. However, the gross profit margin remained consistent at 25%, which implies the company has maintained its relative profitability per sale despite the revenue dip.

Observing the operating income, there's a noticeable 47% decline year-on-year and a 17% drop from the last quarter. The operating margin has slightly compressed, suggesting increased pressure on operational efficiency. A notable movement is seen in the comprehensive financial cost shifting from a sizable expense to a net income, driven primarily by a significant swing in exchange losses, indicating potential foreign currency exchange gains or effective hedging strategies.

The increase in net income by 41% year-on-year while revenues have plunged points to non-operational factors influencing profitability, such as the aforementioned financial costs. Investors should consider both the revenue decline and the unusual financial income when evaluating the company's performance.

The steel industry often serves as a barometer for economic activity, especially in manufacturing and construction sectors. Grupo Simec’s reduced shipment volumes signal a potential slowdown in these sectors, at least as they relate to Simec's markets. The 22% decrease in average sales price per ton could be reflective of global steel price trends or increased competition leading to price cuts.

Moreover, the increase in sales outside of Mexico by 11% amidst an overall sales contraction suggests a strategic pivot or diversifying market reach. This could also be an indicator of changing dynamics in international trade agreements, demand fluctuations, or currency valuation effects. The net income's anomalous increase, in contrast with declining sales, warrants an examination into cost controls, tax benefits, or one-time gains that may not be sustainable long-term.

Understanding sector-specific challenges such as raw material cost volatility, changing tariffs and competitive pressures is important for investors. Assessing Simec's ability to navigate these complexities, as well as their capacity to adjust operationally to shifting market demands, will be vital in anticipating future performance.

GUADALAJARA, Mexico, April 25, 2024 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the three-month period ended March 31, 2024.

Comparative first quarter of 2024 vs. first quarter of 2023

Net Sales
The net sales of the company decreased derived from a less sales price. Sales passed from Ps. 12,825 million in the first quarter of 2023 to Ps. 7,885 million in the same period of 2024. Shipments of steel finished goods decreased 21% from 604 thousand tons in the first quarter of 2023 compared to 479 thousand tons in the same period of 2024. Total sales outside of Mexico in the first quarter of 2024 decreased 29% to reach Ps. 3,694 million compared to Ps. 5,181 million in the same period of 2023. The Mexican sales decreased 45% from Ps. 7,644 million in the first quarter of 2023 to Ps. 4,191 million in the same period of 2024. The decrease in sales can be explained, from mainly due to a lower volume of tons shipped and the average sales price per ton of steel finished goods decreased 22% in the first quarter of 2024 compared with the same period of 2023.

Cost of Sales
The cost of sales decreased from Ps. 9,618 million in the first quarter of 2023 to Ps. 5,876 million in the same period of 2024. Cost of sales as a percentage of net sales in the first quarter of 2024 and 2023 represented 75% for both periods. The average cost of sales per ton of steel finished goods decreased 23% in the first quarter of 2024 compared to the same period of 2023.

Gross Profit
The gross profit of the company decreased 37% from Ps. 3,207 million in 2023 to Ps. 2,009 million in the same period of 2024. Gross profit as a percentage of net sales in the first quarter of 2024 and 2023 represented 25% for both periods. The decrease in gross profit is caused by a lower Volume of tons shipped in the first quarter of 2024 compared with the same period of 2023.

General, Sales and administrative Expenses
General, selling, and administrative expenses increased 1%, from Ps.587 million in the first quarter of 2023 to Ps. 595 million in the same period of 2024 and representing 5% of net sales in 2023 compared to 8% for the period 2024.

Other Expenses (Income) net 
The company recorded other income net of Ps. 5 million in the first quarter of 2024 compared to other income net of Ps. 58 million in the same period of 2023.

Operating Income
The operating income decreased from Ps. 2,678 million for the first quarter of 2023 compared to Ps. 1,419 million in the same period of 2024. Operating income as a percentage of net sales was 18% in the first quarter of 2024 compared to 21% in the same period of 2023. The decrease in operating income is primarily due to a lower volume of tons shipped and a lower average selling price in the first quarter of 2024 compared to the same period in 2023.

EBITDA
The EBITDA of the Company was of Ps. 2,959 million for the first quarter of 2023, as a result of a net income of Ps. 1,033 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 531 million, plus comprehensive financial cost of Ps. 1,116 million, plus depreciation of Ps. 281 million to Ps 1,668 million in the same period of 2024 as a result of a net income of Ps. 1,456 million, plus income taxes of Ps. 110 million, less comprehensive financial cost of Ps. 147 million, plus depreciation of Ps. 249.

 

                                                   Consolidated 



Million  


Comparative first quarter of 2024 vs first quarter of 2023,



2024



2023

Net income (loss)



1,456




1,033

Loss attributable to noncontrolling interests







(2)

Net income (loss)



1,456




1,031

Depreciation and amortization



249




281

Income taxes



110




531

Financial results income (loss)



(147)




1,116

EBITDA



1,668




2,959









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



1,668




2,959

 

Comprehensive Financial Cost 
The Comprehensive financial cost in the first quarter of 2024 represented a net income of Ps. 147 million compared with a net expense of Ps.1,116 million in the same period of 2023. Net interest was an income of Ps. 250 million in the first quarter of 2024 compared with a net income of Ps. 190 million in the same period of 2023. At the same time, Simec registered an exchange loss of Ps. 103 million in the first quarter of 2024 compared with an exchange loss of Ps.1,306 million in the same period of 2023.

Income Taxes
Income Taxes recorded an expense of Ps. 110 million in the first quarter of 2024 (including the benefits of Ps. 8 million of deferred income taxes), compared to an expense of Ps.531 million in the same period of 2023.

Net Income (loss) 
As a result of the foregoing, net income increases to Ps. 1,456 million in the first quarter of 2024 from Ps. 1,033 million in the same period of previous year.

Financial Situation, Liquidity and Capital Resources
As of March 31, 2024, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.0 million (accrued interest on March 31, 2024 was U.S. $820 or Ps. 13.7 million).  As of March 31, 2023, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.5 million (accrued interest on March 31, 2023 was U.S. $696 or Ps. 12.6 million).

Comparative first quarter of 2024 vs. fourth quarter of 2023

Net Sales
The net sales of the company decreased 11% comparing Ps. 8,815 million in the fourth quarter of 2023 to Ps. 7,885 million in the first quarter of 2024. The tons sales decreased 11%, from 536 thousand tons in the fourth quarter of 2023 compared to 479 thousand tons in the first quarter of 2024. Total sales outside of Mexico in the first quarter of 2024 increased 11% from Ps. 3,320 million on the last quarter of 2023 compared to Ps. 3,694 million in the first quarter of 2024. The Mexican sales decreased 24% from Ps. 5,495 million in the fourth quarter of 2023 to Ps. 4,191 million in the first quarter of 2024. The decrease mainly due to a lower volume shipped, in the first quarter of 2024 compared with the fourth quarter of 2023.

Cost of Sales
Cost of sales decreased 6% from Ps. 6,282 million in the fourth quarter of 2023 to Ps. 5,876 million in the first quarter of 2024. Cost of sales as a percentage of net sales in the first quarter of 2024 represented 75% and in the last quarter of 2023 cost of sales represented 71%. The average cost of finished steel products in the first quarter of 2024 increased 5% compared to the fourth quarter of 2023 as a result of an increased on the cost of raw materials.

Gross Profit
Gross profit of the company for the first quarter of 2024 decreased to Ps. 2,009 million in 2024 from Ps. 2,533 million in the last quarter of 2023. Gross profit as a percentage of net sales in the first quarter of 2024 was 25% and for the last period of 2023 was 29%. The decrease in gross profit is due to a lower volume of shipments on the first quarter of 2024 compared with the last quarter of 2023.

General, Sales and administrative Expenses
General selling, and administrative expenses decreased to Ps. 595 million in the first quarter of 2024 compared to Ps. 761 million in the fourth quarter of 2023, representing 8% for the period of the first quarter 2024 and 9% for the period of the fourth quarter 2023.

Other Expenses (Income) net 
The company recorded other net income of Ps. 5 million in the first quarter of 2024 compared to other net expenses of Ps. 63 million in the fourth quarter of 2023.

Operating Income Operating income decreased 17% to Ps. 1,419 million for the first quarter of 2024 compared to Ps. 1,709 million in the last quarter of 2023. Operating income as a percentage of net sales was 18% in the first quarter of 2024, compared to 19% in the last quarter of 2023. The decrease in operating income is due to the decrease in production and volume of shipments, in the first quarter of 2024 compared with the fourth quarter of 2023.

EBITDA
The EBITDA of the Company was of 1,914 million for the fourth quarter of 2023, as a result of a net income of Ps. 1,365 million, less minority stake of Ps. 2 million, less income taxes of Ps. 236 million, plus comprehensive financial cost of Ps. 582 million, plus depreciation of Ps. 205 million to Ps 1,668 million in the first quarter of 2024 as a result of a net income of Ps. 1,456 million, plus income taxes of Ps. 110 million, less comprehensive financial cost of Ps. 147 million, plus depreciation of Ps. 249.

 

                                                   Consolidated 



Million  


Comparative first quarter of 2024 vs fourth quarter of 2023,



2024



2023

Net income (loss)



1,456




1,365

Loss attributable to noncontrolling interests







(2)

Net income (loss)



1,456




1,363

Depreciation and amortization



249




205

Income taxes



110




(236)

Financial results income (loss)



(147)




582

EBITDA



1,668




1,914









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



1,668




1,914

 

Comprehensive Financial Cost 
Comprehensive financial cost in the first quarter of 2024 represented a net income of Ps. 147 million compared with a net expense of Ps. 582 million in the fourth quarter of 2023. Net interest income of the first quarter of 2024 was of Ps. 250 million compared with an interest net income of Ps. 181 million in the last quarter of 2023. Likewise, an exchange less of 103 million was recorded in the first quarter of 2024 against an exchange less of Ps. 787 million in the last quarter of 2023. In the fourth quarter of 2023, other net financial income was recorded for Ps. 24 million.

Income Taxes
Income Taxes recorded an expense of Ps. 110 million in the first quarter of 2024 (including Ps. 8 million of deferred expense taxes), compared with an income of Ps. 236 million in the fourth quarter of 2023 (including Ps. 136 million of deferred income taxes).

Net Income (loss) 

As a result of the foregoing, the net income of the first quarter of 2024 is of Ps. 1,456 million compared net income Ps. 1,365 million of the fourth quarter 2023.

Quarter






(millions of pesos)

1Q'24

4Q '23

1Q 23

1Q´24vs
4Q´23

1Q´24 vs
1Q '23

Sales

7,885

8,815

12,825

(11 %)

(39 %)

Cost of Sales

5,876

6,282

9,618

(6 %)

(39 %)

Gross Profit

2,009

2,533

3,207

(21 %)

(37 %)

Selling, General and Adm. Expenses

595

761

587

(22 %)

1 %

Other Income (Expenses), net

5

(63)

58

(108 %)

(91 %)

Operating Profit

1,419

1,709

2,678

(17 %)

(47 %)

EBITDA

1,668

1,914

2,959

(13 %)

(44 %)

Net Income

1,456

1,365

1,033

7 %

41 %

Sales Outside Mexico

3,694

3,320

5,181

11 %

(29 %)

Sales in Mexico

4,191

5,495

7,644

(24 %)

(45 %)

Total Sales (Tons)

479

536

604

(11 %)

(21 %)

Cost per Ton

12,267

11,720

15,924

5 %

(23 %)

 

Product

Thousands of Tons

Jan-Mar 2024

Millions of Pesos     Jan-Mar 2024

Average Price per Ton

Jan-Mar

2024

Thousands of Tons

Oct-Dec

2023

Millions of Pesos      Oct-Dec

2023

Average Price per Ton

Oct-Dec

2023

Thousands of Tons           Jan-Mar

2023

Millions of Pesos            Jan-Mar 2023

Average Price per Ton           Jan-Mar

2023

Commercial Profiles

352

5,435

15,440

383

6,053

15,804

425

8,583

20,195

Special Profiles

127

2,450

19,291

153

2,762

18,052

179

4,242

23,698











Total

479

7,885

16,461

536

8,815

16,446

604

12,825

21,233

 

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.

PRESS RELEASE

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

 

Cision View original content:https://www.prnewswire.com/news-releases/grupo-simec-announces-results-of-operations-for-the-first-quarter-of-2024-ended-march-31-2024-302128112.html

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

FAQ

How did Grupo Simec's net sales perform in the first quarter of 2024?

Grupo Simec's net sales decreased by 39% in the first quarter of 2024 compared to the same period in 2023.

What was the percentage change in EBITDA for Grupo Simec in the first quarter of 2024?

EBITDA for Grupo Simec decreased by 44% in the first quarter of 2024 compared to the same period in 2023.

What was the net income for Grupo Simec in the first quarter of 2024?

The net income for Grupo Simec increased by 41% in the first quarter of 2024 compared to the same period in 2023.

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Groupo Simec, S.A.B de C.V.

NYSE:SIM

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#1445 Ranked by Market Cap
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SIM Stock Data

4.13B
153.71M
0.17%
Steel
Basic Materials
Link
United States of America
Guadalajara