GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST QUARTER, OF 2022, ENDED MARCH 31, 2022

Rhea-AI Summary

Grupo Simec (NYSE: SIM) reported a 16% increase in gross profit for Q1 2022, totaling Ps. 3,842 million, driven by a 23% rise in average sales prices. Net sales grew 12.5% year-over-year to Ps. 15,032 million, although shipments of steel finished goods fell by 9% to 623,000 tons. The cost of sales also rose by 11% to Ps. 11,190 million, marking a 74% of net sales ratio. Net income decreased 6% year-over-year to Ps. 2,494 million. Despite challenges, the company’s operating income improved 18% to Ps. 3,325 million, reflecting a healthy market dynamic.

Positive

• Gross profit increased 16% to Ps. 3,842 million.
• Net sales rose 12.5% year-over-year to Ps. 15,032 million.
• Operating income improved 18% to Ps. 3,325 million.
• Average sales price per ton of steel finished goods increased 23%.

Negative

• Net income decreased 6% to Ps. 2,494 million.
• Shipments of steel finished goods decreased 9% year-over-year.

GUADALAJARA, Mexico, April 28, 2022 /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, 2022.

Comparative first quarter of 2022 vs. first quarter of 2021

Net Sales 
The net sales of the company increased derived from a higher sales price. Sales passed from Ps. 13,355 million in the first quarter of 2021 to Ps. 15,032 million in the same period of 2022. Shipments of steel finished goods decreased 9% from 682 thousand tons in the first quarter of 2021 compared to 623 thousand tons in the same period of 2022. Total sales outside of Mexico in the first quarter of 2022 increased 4% to reach Ps. 6,976 million compared to Ps. 6,691 million in the same period of 2021. The Mexican sales increased 21% from Ps. 6,664 million in the first quarter of 2021 to Ps. 8,056 million in the same period of 2022. The increase in sales can be explained, from the average sales price per ton of steel finished goods increased 23% in the first quarter of 2022 compared with the same period of 2021.

Cost of Sales 
The cost of sales increased from Ps. 10,055 million in the first quarter of 2021 to Ps. 11,190 million in the same period of 2022. Cost of sales as a percentage of net sales in the first quarter of 2022 and 2021 represented 74% and 75% respectively. The average cost of sales per ton of steel finished goods increased 22% in the first quarter of 2022 compared to the same period of 2021.

Gross Profit 
The gross profit of the company increased 16% from Ps. 3,300 million in 2021 to Ps. 3,842 million in the same period of 2022. Gross profit as a percentage of net sales in the first quarter of 2022 and 2021 represented 26% and 25% respectively. The increase in gross profit is due to explained from the average sales price per ton of steel finished goods in the first quarter of 2022 compared with the same period of 2021.

General, Sales and administrative Expenses 
General, selling and administrative expenses increased 9%, from Ps.475 million in the first quarter of 2021 to Ps. 518 million in the same period of 2022 and representing 4% of net sales in 2021 compared to 3% for the period 2022.

Other Expenses (Income) net 
The company recorded other income net of Ps. 1 million in the first quarter of 2022 compared to other expenses net of Ps. 13 million in the same period of 2021.

Operating Income 
The operating income increased from Ps. 2,812 million for the first quarter of 2021 compared to Ps. 3,325 million in the same period of 2022. Operating income as a percentage of net sales was 22% in the first quarter of 2022 compared to 21% in the same period of 2021. The increase in operating income is from the average sales price per ton of steel finished goods in the first quarter of 2022 compared with the same period of 2021.

EBITDA 
The EBITDA of the Company was of Ps. 3,113 million for the first quarter of 2021, as a result of a net income of Ps. 2,644 million, plus income taxes of Ps. 391 million, less comprehensive financial cost of Ps. 224 million, plus depreciation of Ps. 302 million to Ps 3,605 million in the same period of 2022 as a result of a net income of Ps. 2,494 million, plus income taxes of Ps. 460 million, plus comprehensive financial cost of Ps. 371 million, plus depreciation of Ps. 280.

 

Consolidated
Million		Comparative first quarter of 2022 vs first quarter of 2021,
		2022				2021
Net income (loss)			2,494				2,644
Loss attributable to noncontrolling interests
Net income (loss)			2494				2,644
Depreciation and amortization			280				302
Income taxes			460				391
Financial results income (loss)			371				(224)
EBITDA			3,605				3,113
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			3,605				3,113

 

Comprehensive Financial Cost  
The Comprehensive financial cost in the first quarter of 2022 represented a net expense of Ps. 371 million compared with a net income of Ps.224 million in the same period of 2021. Net interest was an income of Ps. 29 million in the first quarter of 2022 compared with a net expense of Ps. 16 million in the same period of 2021. At the same time, Simec registered an exchange loss of Ps. 400 million in the first quarter of 2022 compared with an exchange income of Ps.240 million in the same period of 2021.

Income Taxes 
Income Taxes recorded an expense of Ps. 460 million in the first quarter of 2022 (including the income of Ps. 7 million of deferred income taxes) compared to an expense of Ps.391 million in the same period of 2021 (including the benefits of Ps. 8 million of deferred income taxes).

Net Income (loss) 
As a result of the foregoing, net income decreases 6% to Ps. 2,494 million in the first quarter of 2022 from Ps. 2,644 million in the same period of previous year.

Financial Situation, Liquidity and Capital Resources  As of March 31, 2022, 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 March 31, 2022 was U.S. $676 or Ps. 13.4 million).  As of March 31, 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 March 31, 2021 was U.S. $650 or Ps. 13.4 million).

Comparative first quarter of 2022 vs. fourth quarter of 2021

Net Sales 
The net sales of the company increased 17% comparing Ps. 12,884 million in the fourth quarter of 2021 to Ps. 15,032 million in the first quarter of 2022. The tons sales increased 13%, from 550 thousand tons in the fourth quarter of 2021 compared to 623 thousand tons in the first quarter of 2022. Total sales outside of Mexico in the first quarter of 2022 increased 11% from Ps. 6,279 million on the last quarter of 2021 compared to Ps. 6,976 million in the first quarter of 2022. The Mexican sales increased 22% from Ps. 6,605 million in the fourth quarter of 2021 to Ps. 8,056 million in the first quarter of 2022. The increase mainly due to a greater volume shipped, better average sales price per ton, increased 3%, in the first quarter of 2022 compared with the fourth quarter of 2021.

Cost of Sales 
Cost of sales increased 22% from Ps. 9,145 million in the fourth quarter of 2021 to Ps. 11,190 million in the first quarter of 2022. Cost of sales as a percentage of net sales in the first quarter of 2022 represented 74% and in the last quarter of 2021 cost of sales represented 71%. The average cost of finished steel products in the first quarter of 2022 increased 8% compared to the fourth quarter of 2021 as a result of an increased on the cost of raw materials.

Gross Profit 
Gross profit of the company for the first quarter of 2022 increased to Ps. 3,842 million in 2022 from Ps. 3,739 million in the last quarter of 2021. Gross profit as a percentage of net sales in the first quarter of 2022 was 26% and for the last period of 2021 was 29%. The increase in gross profit is due to a better average sales price and volume of shipments on the first quarter of 2022 compared with the last quarter of 2021.

General, Sales and administrative Expenses 
General, selling and administrative expenses decreased to Ps. 518 million in the first quarter of 2022 compared to Ps. 551 million in the fourth quarter of 2021, representing 3% for the period of the first quarter 2022 and 4% for the period of the fourth quarter 2021.

Other Expenses (Income) net 
The company recorded other net income of Ps. 1 million in the first quarter of 2022 compared to other net expense of Ps. 27 million in the fourth quarter of 2021.

Operating Income
Operating income increased 5% to Ps. 3,325 million for the first quarter of 2022 compared to Ps. 3,161 million in the last quarter of 2021. Operating income as a percentage of net sales was 22% in the first quarter of 2022, compared to 25% in the last quarter of 2021. The increase in operating income is due to the increase in production and volume of shipments, in the first quarter of 2022 compared with the fourth quarter of 2021.

EBITDA 
The EBITDA of the Company was of 3,450 million for the fourth quarter of 2021, as a result of a net income of Ps. 1,154 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 2,085 million, less comprehensive financial cost of Ps. 79 million, plus depreciation of Ps. 289 million to Ps 3,605 million in the first quarter of 2022 as a result of a net income of Ps. 2,494 million, plus income taxes of Ps. 460 million, plus comprehensive financial cost of Ps. 371 million, plus depreciation of Ps. 280.

 

Consolidated
Million		Comparative first quarter of 2022 vs fourth quarter of 2021,
		2022				2021
Net income (loss)			2,494				1,154
Loss attributable to noncontrolling interests							1
Net income (loss)			2,494				1,155
Depreciation and amortization			280				289
Income taxes			460				2,085
Financial results income (loss)			371				(79)
EBITDA			3,605				3,450
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			3,605				3,450

 

Comprehensive Financial Cost  
Comprehensive financial cost in the first quarter of 2022 represented a net expense of Ps. 371 million compared with a net income of Ps. 79 million in the fourth quarter of 2021. Net interest income of the first quarter of 2022 was of Ps. 29 million compared with an interest net income of Ps. 14 million in the last quarter of 2021. Likewise, an exchange less of 400 million was recorded in the first quarter of 2022 against an exchange profit of Ps. 65 million in the last quarter of 2021.

Income Taxes 
Income Taxes recorded an expense of Ps. 460 million in the first quarter of 2022 (including Ps. 7 million of deferred income taxes) compared with an expense of Ps. 2,085 million in the fourth quarter of 2021 (including Ps. 475 million of deferred expense taxes).

Net Income (loss) 
As a result of the foregoing, the net income of the first quarter of 2022 is of Ps. 2,494 million compared net income Ps. 1,154 million of the fourth quarter 2021.

 

Quarter
(millions of pesos)	1Q'22	1Q '21	4Q 21	1Q´22vs 1Q´21	1Q´22 vs 4Q '21
Sales	15,032	13,355	12,884	13%	17%
Cost of Sales	11,190	10,055	9,145	11%	22%
Gross Profit	3,842	3,300	3,739	16%	3%
Selling, General and Adm. Expenses	518	475	551	9%	(6%)
Other Income (Expenses), net	1	(13)	(27)	(108%)	(104%)
Operating Profit	3,325	2,812	3,161	18%	5%
EBITDA	3,605	3,113	3,450	16%	4%
Net Income	2,494	2,644	1,154	(6%)	116%
Sales Outside Mexico	6,976	6,691	6,279	4%	11%
Sales in Mexico	8,056	6,664	6,605	21%	22%
Total Sales (Tons)	623	682	550	(9%)	13%
Cost per Ton	17,961	14,743	16,627	22%	8%

 

 

Product	Thousands of Tons Jan-Mar 2022	Million of Pesos Jan-Mar 2022	Average Price per Ton Jan-Mar 2022	Thousands of Tons Jan-Mar 2021	Million of Pesos Jan-Mar 2021	Average Price per Ton Jan-Mar 2021	Thousands of Tons Oct-Dec 2021	Million of Pesos Oct-Dec 2021	Average Price per Ton Oct-Dec 2021
Commercial Profiles	413	9,306	22,533	435	8,114	18,653	357	7,541	21,123
Special Profiles	210	5,726	27,267	247	5,241	21,219	193	5,343	27,684
Total	623	15,032	24,128	682	13,355	19,582	550	12,884	23,425

 

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: 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 net sales for Q1 2022?

Grupo Simec reported net sales of Ps. 15,032 million for Q1 2022.

How did Grupo Simec's gross profit change in Q1 2022?

Grupo Simec's gross profit increased by 16% to Ps. 3,842 million in Q1 2022.

What was the percentage increase in operating income for Grupo Simec in Q1 2022?

Operating income for Grupo Simec increased by 18% in Q1 2022.

How much did net income change for Grupo Simec in Q1 2022?

Net income for Grupo Simec decreased by 6% to Ps. 2,494 million in Q1 2022.

What was the trend of shipments of steel finished goods for Grupo Simec in Q1 2022?

Shipments of steel finished goods decreased by 9% year-over-year in Q1 2022.