Grupo Simec Announces Results of Operations for the First Quarter, of 2021, Ended March 31, 2021

Rhea-AI Summary

Grupo Simec (NYSE: SIM) reported strong financial results for Q1 2021, achieving net sales of Ps. 13,355 million, a 57% increase from Ps. 8,500 million in Q1 2020. Steel shipments rose 10%, totaling 682 thousand tons. The average sales price per ton surged 43%. Gross profit soared 114% to Ps. 3,300 million, while operating income increased 132% to Ps. 2,812 million. Net income improved 38% to Ps. 2,644 million, despite a rise in cost of sales to Ps. 10,055 million. Overall, the company demonstrated robust performance amidst rising demand and prices.

Positive

• Net sales increased 57% year-over-year to Ps. 13,355 million.
• Gross profit rose 114% to Ps. 3,300 million.
• Operating income surged 132% to Ps. 2,812 million.
• Net income increased 38% to Ps. 2,644 million.
• Average sales price per ton of steel finished goods increased 43%.

Negative

• Cost of sales rose from Ps. 6,960 million to Ps. 10,055 million, increasing by 44%.
• Other expenses turned from a net income of Ps. 102 million in Q1 2020 to a net expense of Ps. 13 million in Q1 2021.

GUADALAJARA, Mexico, April 30, 2021 /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, 2021.

Comparative first quarter of 2021 vs. first quarter of 2020

Net Sales

The net sales of the company increased derived from a higher sales price. Sales passed from Ps. 8,500 million in the first quarter of 2020 to Ps. 13,355 million in the same period of 2021. Shipments of steel finished goods increased 10% from 622 thousand tons in the first quarter of 2020 compared to 682 thousand tons in the same period of 2021. Total sales outside of Mexico in the first quarter of 2021 increased 63% to reach Ps. 6,691 million compared to Ps. 4,096 million in the same period of 2020. The Mexican sales increased 51% from Ps. 4,404 million in the first quarter of 2020 to Ps. 6,664 million in the same period of 2021. The keep in sales can be explained due to a higher volume shipped in 10% compared with the same period of 2020. The average sales price per ton of steel finished goods increased 43% in the first quarter of 2021 compared with the same period of 2020.

Cost of Sales

The cost of sales increased from Ps. 6,960 million in the first quarter of 2020 to Ps. 10,055 million in the same period of 2021. Cost of sales as a percentage of net sales in the first quarter of 2021 and 2020 represented 75% and 82% respectively. The average cost of sales per ton of steel finished goods increased 32% in the first quarter of 2021 compared to the same period of 2020.

Gross Profit

The gross profit of the company increased 114% from Ps. 1,540 million in 2020 to Ps. 3,300 million in the same period of 2021. Gross profit as a percentage of net sales in the first quarter of 2021 and 2020 represented 25% and 18% respectively. The increase in gross profit is due to explained due to a higher volume shipped and higher average sales price per ton of steel finished goods in the first quarter of 2021 compared with the same period of 2020.

General, Sales and administrative Expenses

General, selling and administrative expenses increased 10%, from Ps.4 31 million in the first quarter of 2020 to Ps. 475 million in the same period of 2021 and representing 5% of net sales in 2020 compared to 4% for the period 2021.

Other Expenses (Income) net

The company recorded other expenses net of Ps. 13 million in the first quarter of 2021 compared to other income net of Ps. 102 million in the same period of 2020.

Operating Income

The operating income increased from Ps. 1,211 million for the first quarter of 2020 compared to Ps. 2,812 million in the same period of 2021. Operating income as a percentage of net sales was 21% in the first quarter of 2021 compared to 14% in the same period of 2020. The increase in operating income due to a higher volume shipped and higher average sales price per ton of steel finished goods in the first quarter of 2021 compared with the same period of 2020.

EBITDA

The EBITDA of the Company was of 1,526 million for the first quarter of 2020, as a result of a net income of Ps. 1,914 million, less minority stake of Ps. 19 million, plus income taxes of Ps. 578 million, less comprehensive financial cost of Ps. 1,262 million, plus depreciation of Ps. 315 million to Ps 3,113 million in the same period 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.

Consolidated
Million		Comparative first quarter of 2021 vs first quarter of 2020,
		2021				2020
Net income (loss) attributable to Vale's stockholders			2,644				1,914
Loss attributable to noncontrolling interests							(19)
Net income (loss)			2,644				(1,640)
Depreciation, depletion and amortization			302				315
Income taxes			391				578
Financial results income (loss)			(224)				(1,262)
EBITDA			3,113				1,526
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			3,113				1,526

Comprehensive Financial Cost 

The Comprehensive financial cost in the first quarter of 2021 represented a net income of Ps. 224 million compared with an income of Ps.1,262 million in the same period of 2020. Net interest was an expense of Ps. 16 million in the first quarter of 2021 compared with a net income of Ps. 44 million in the same period of 2020. At the same time, Simec registered an exchange profit of Ps. 240 million in the first quarter of 2021 compared with an exchange income of Ps.1,218 million in the same period of 2020.

Income Taxes

Income Taxes recorded an expense of Ps. 391 million in the first quarter of 2021 (including the income of Ps. 8 million of deferred income taxes) compared to an expense of Ps.578 million in the same period of 2020 (including the benefits of Ps. 12 million of deferred income taxes).

Net Income (loss)

As a result of the foregoing, net income increases 38% to Ps. 2,644 million in the first quarter of 2021 from Ps. 1,914 million in the same period of previous year.

Financial Situation, Liquidity and Capital Resources

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).  As of March 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. 7.3 million (accrued interest on March 31, 2020 was U.S. $689 or Ps. 16.7 million).

Comparative first quarter of 2021 vs. fourth quarter of 2020

Net Sales

The net sales of the company increased 32% comparing Ps. 10,130 million in the fourth quarter of 2020 to Ps. 13,355 million in the first quarter of 2021. The tons sales increased 13%, from 602 thousand tons in the fourth quarter of 2020 compared to 682 thousand tons in the first quarter of 2021. Total sales outside of Mexico in the first quarter of 2021 increased 41% from Ps. 4,754 million on the last quarter of 2020 compared to Ps. 6,691 million in the first quarter of 2021. The Mexican sales increased 24% from Ps. 5,376 million in the fourth quarter of 2020 to Ps. 6,664 million in the first quarter of 2021. The increase mainly due to a greater volume shipped, better average sales price per ton, increased 16%, in the first quarter of 2021 compared with the fourth quarter of 2020.

Cost of Sales

Cost of sales increased 20% from Ps. 8,356 million in the fourth quarter of 2020 to Ps. 10,055 million in the first quarter of 2021. Cost of sales as a percentage of net sales in the first quarter of 2021 represented 75% and in the last quarter of 2020 cost of sales represented 82%. The average cost of finished steel products in the first quarter of 2021 increased 6% compared to the fourth quarter of 2020 as a result of an increased on the cost of raw materials.

Gross Profit

Gross profit of the company for the first quarter of 2021 increased to Ps. 3,300 million in 2021 from Ps. 1,774 million in the last quarter of 2020. Gross profit as a percentage of net sales in the first quarter of 2021 was 25% and for the last period of 2020 was 18%. The increase in gross profit is due to a better average sales price and volume of shipments on the first quarter of 2021 compared with the last quarter of 2020.

General, Sales and administrative Expenses

General, selling and administrative expenses decreased to Ps. 475 million in the first quarter of 2021 compared to Ps. 703 million in the fourth quarter of 2020, representing 4% for the period of the first quarter 2021 and 7% for the period of the fourth quarter 2020.

Other Expenses (Income) net

The company recorded other net expense of Ps. 13 million in the first quarter of 2021 compared to other net income of Ps. 330 million in the fourth quarter of 2020.

Operating Income

Operating income increased 101% to Ps. 2,812 million for the first quarter of 2021 compared to Ps. 1,401 million in the last quarter of 2020. Operating income as a percentage of net sales was 21% in the first quarter of 2021, compared to 14% in the last quarter of 2020. The increase in operating income is due to the increase in production and volume of shipments, in the first quarter of 2021 compared with the fourth quarter of 2020.

EBITDA

The EBITDA of the Company was of 1,716 million for the fourth quarter of 2020, as a result of a net loss of Ps. 498 million, less minority stake of Ps. 4 million, plus income taxes of Ps. 615 million, plus comprehensive financial cost of Ps. 1,288 million, plus depreciation of Ps. 315 million to Ps 3,113 million in 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.

Consolidated
Million		Comparative first quarter of 2021 vs fourth quarter of 2020,
		2021				2020
Net income (loss) attributable to Vale's stockholders			2,644				(498)
Loss attributable to noncontrolling interests							(4)
Net income (loss)			2,644				(502)
Depreciation, depletion and amortization			302				315
Income taxes			391				615
Financial results income (loss)			(224)				1,288
EBITDA			3,113				1,716
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			3,113				1,716

Comprehensive Financial Cost 

Comprehensive financial cost in the first quarter of 2021 represented a net income of Ps. 224 million compared with a net expense of Ps. 1,288 million in the fourth quarter of 2020. Net interest expense of the first quarter of 2021 was of Ps. 16 million compared with an interest net income of Ps. 15 million in the last quarter of 2020. Likewise, an exchange profit of 240 million was recorded in the first quarter of 2021 against an exchange loss of Ps. 1303 million in the last quarter of 2020.

Income Taxes

Income Taxes recorded an expense of Ps. 391 million in the first quarter of 2021 (including Ps. 8 million of deferred income taxes) compared with an expense of Ps. 615 million in the fourth quarter of 2020 (including Ps. 66 million of deferred expense taxes).

Net Income (loss)

As a result of the foregoing, the net income of the first quarter of 2021 is of Ps. 2,644 million compared net loss Ps. 498 million of the fourth quarter 2020.

Quarter
(millions of pesos)	1Q'21	1Q '20	4Q 20	1Q´21vs 1Q´20	1Q´21 vs 4Q '20
Sales	13,355	8,500	10,130	57%	32%
Cost of Sales	10,055	6,960	8,356	44%	20%
Gross Profit	3,300	1,540	1,774	114%	86%
Selling, General and Adm. Expenses	475	431	703	10%	(32%)
Other Income (Expenses), net	(13)	102	330	(113%)	(104%)
Operating Profit	2,812	1,211	1,401	132%	101%
EBITDA	3,113	1,526	1,716	104%	81%
Net Income	2,644	1,914	(498)	38%	(706%)
Sales Outside Mexico	6,691	4,096	4,754	63%	41%
Sales in Mexico	6,664	4,404	5,376	51%	24%
Total Sales (Tons)	682	622	602	10%	13%
Cost per Ton	14,743	11,190	13,880	32%)	6%

 

Product	Thousands of Tons Jan-Mar 2021	Million of Pesos Jan-Mar 2021	Average Price per Ton Jan-Mar 2021	Thousands of Tons Jan-Mar 2020	Million of Pesos Jan-Mar 2020	Average Price per Ton Jan-Mar 2020	Thousands of Tons Oct-Dec 2020	Million of Pesos Oct-Dec 2020	Average Price per Ton Oct-Dec 2020
Commercial Profiles	435	8,114	18,653	398	4,780	12,010	382	6,232	16,314
Special Profiles	247	5,241	21,219	228	3,720	16,682	220	3,898	17,718
Total	682	13,355	19,582	622	8,500	13,666	602	10,130	16,827

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 2021?

Grupo Simec reported net sales of Ps. 13,355 million for Q1 2021.

How much did net income increase for Grupo Simec in Q1 2021?

Net income for Grupo Simec increased by 38% to Ps. 2,644 million in Q1 2021.

What was the percentage increase in gross profit for Grupo Simec in Q1 2021?

Gross profit surged by 114% to Ps. 3,300 million in Q1 2021.

How much did the cost of sales increase for Grupo Simec in Q1 2021?

The cost of sales increased by 44% to Ps. 10,055 million in Q1 2021.

What was the average sales price per ton of steel for Grupo Simec in Q1 2021?

The average sales price per ton of steel finished goods increased by 43% in Q1 2021.