Grupo Simec Announces Results of Operations for the Twelve-Month Period Ended December 31, 2021 Audited

Rhea-AI Summary

Grupo Simec (NYSE: SIM) reported a strong performance for the twelve-month period ending December 31, 2021, with net sales rising 55% to Ps. 55,620 million, driven by a 51% increase in average sales prices and a 3% rise in shipments. Gross profit surged 135% to Ps. 15,652 million, improving its gross margin to 28%. Operating income increased 161% to Ps. 13,532 million, and net income jumped 238% to Ps. 9,444 million. However, Q4 2021 saw a decline in net sales and profit compared to Q3 2021 due to lower shipments and pricing volatility.

Positive

• Net sales increased by 55% to Ps. 55,620 million in 2021.
• Gross profit rose 135% to Ps. 15,652 million, with a gross margin improvement to 28%.
• Operating income increased 161% to Ps. 13,532 million.
• Net income surged 238% to Ps. 9,444 million.
• Sales outside Mexico grew 55% to Ps. 27,576 million.

Negative

• Q4 2021 net sales decreased by 9% compared to Q3 2021.
• Q4 2021 net income fell 65% compared to Q3 2021.
• Sales in tons decreased by 6% from Q3 2021.

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 twelve-month period ended December 31, 2021 and December 31, 2020.

Twelve-Month Period Ended December 31, 2021 compared to Twelve-Month Period Ended December 31, 2020

Net Sales 
Net sales increased 55% by the combination of higher shipments of finished steel products and a higher average sales price by 51% compared the same period of 2020, the sales increased from Ps. 35,869 million in the twelve-month period ended December 31, 2020 to Ps. 55,620 million in the same period of 2021. Shipments of finished steel products increased 3% to 2 million 504 thousand tons in the twelve-month period ended December 31, 2021 compared to 2 million 441 thousand tons in the same period of 2020. Total sales outside of Mexico on the twelve-month period ended December 31, 2021 increased 55% to Ps. 27,576 million compared with Ps. 17,746 million in the same period of 2020. Total sales in Mexico increased 55% from Ps. 18,123 million in the twelve-month period ended December 31, 2020 to Ps. 28,044 million in the same period of 2021. The increase of 55% in sales is due to a higher average sales price and higher volume of shipments.

Cost of Sales 
Cost of sales increased 37% from Ps. 29,212 million in the twelve-month period ended December 31, 2020 to Ps. 39,968 million in the same period of 2021. Cost of sales as a percentage of net sales represented, 72% for 2021 and 2020 81%. The average cost of finished steel produced in the twelve-month period ended December 31, 2021 compared to the same period of 2020 increased 33% mainly due to scrap cost and to higher costs of some supplies at year end.

Gross Profit 
Gross profit of the Company in the twelve-month period ended December 31, 2021 was of Ps. 15,652 million compared to Ps. 6,657 million in the same period of 2020. Gross profit as a percentage of net sales represented 28% and 19% for the 2021 and 2020 periods respectively.

Operating Expenses 
Selling, general and administrative expenses increased 1% from Ps. 2,019 million in the twelve-month period ended December 31, 2020 to Ps. 2,043 million in the same period of 2021. Selling, general and administrative expenses as a percentage of net sales represented 6% during the twelve-month period ended December 31, 2020 and 4% in the same period of 2021.

Other Expenses (Income) net 
The company recorded other net income of Ps. 547 million in the twelve-month period ended December 31, 2020 compared to other net expenses of Ps. 77 million in the same period of 2021.

Operating Income 
Operating income increased 161% from Ps. 5,185 million for the twelve-month period ended December 31, 2020 to Ps. 13,532 million in the same period of 2021. Operating income as a percentage of net sales represented 24% and 14% for the 2021 and 2020 periods respectively.

EBITDA 
The EBITDA of the Company increased 122% from Ps. 6,637 million in the twelve-month prior ended December 31, of 2020, as a result a net income of Ps. 2,798, plus income taxes of Ps. 2,078, plus comprehensive financial cost of Ps. 309, plus depreciation of Ps. 1,452 to Ps. 14,707 million in the same period of 2021 as a result a net income of Ps. 9,444, plus minority stake of Ps. 2 million, plus income taxes of Ps. 4,390, less comprehensive financial cost of Ps. 304, plus depreciation of 1,175.

Consolidated
Million		Twelve-month period ended December 31,
		2021				2020
Net income (loss)			9,444				2,798
Loss attributable to noncontrolling interests			2				0
Net income (loss)			9,446				2,798
Depreciation and amortization			1,175				1,452
Income taxes			4,390				2,078
Financial results income (loss)			(304)				309
EBITDA			14,707				6,637
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			14,707				6,637

Comprehensive Financial Cost
Comprehensive financial cost in the twelve-month period ended December 31, 2021 represented a net income of Ps. 304 million compared with a net expense of Ps. 309 million in the same period of 2020. The net interest was an expense of Ps. 21 million in 2021 compared with a net income of Ps. 54 million in the twelve-month period ended December 31, 2020. As a result, we registered a net exchange profit of Ps. 325 million in the twelve-month period ended December 31, 2021 compared with a net exchange loss of Ps. 363 million in the same period of 2020, reflecting a 2.91% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2021 compared to December 31, 2020.

Income Taxes 
The Company have recorded an expense net tax of Ps. 4,390 million in the twelve-month period ended December 31, 2021 (including the expenses of deferred tax of Ps. 571 million) compared with a net expense tax of Ps. 2,078 million in the same period of 2020 (including the tax deferred expense of Ps. 247 million).

Net Income (loss) 
As a result of the foregoing, net income increased by 238% from Ps. 2,798 million net profits in the twelve-month period ended December 31, 2020 to Ps. 9,444 million a result net income in the same period of 2021. 

Liquidity and Capital Resources 
As of December 31, 2021, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 6.2 million (accrued interest on December 31, 2021 was U.S. $671,437 or Ps. 13.8 million).  As of 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, Ps. 6.0 million (accrued interest on December 31, 2020 was U.S. $640,393, or Ps. 12.8 million).

Comparative fourth quarter 2021 vs third quarter 2021

Net Sales 
Net sales decreased from Ps. 14,122 million in the third quarter of 2021 to Ps. 12,884 million for the fourth quarter of 2021. Sales in tons decreased from 585 thousand ton in the third quarter of 2021 to 550 thousand ton in the fourth quarter of the same period, a decreased of 6%. Total sales outside of Mexico for the fourth quarter of 2021 decreased 8% from Ps. 6,838 million in the third quarter to Ps. 6,279 million in the four quarter of 2021. Sales in Mexico decreased to Ps. 6,605 million in the fourth quarter of 2021 compared Ps. 7,284 million in the third quarter of 2021 and decreased of 9%. Prices of finished products sold in the fourth quarter of 2021 decreased 3% compared with the third quarter of the same period.

Cost of Sales 
Cost of sales decreased to Ps. 9,145 million in the fourth quarter of 2021 compared to Ps. 9,913 million for the third quarter of 2021. With respect to sales, in the fourth quarter of 2021, the cost of sales represented 71% in the fourth quarter of 2021, compared to 70% in the third quarter of the same period. The average cost of sales by ton decreased of 2% in the fourth quarter of 2021 versus the third quarter of 2021.

Gross Profit 
Gross profit of the Company for the fourth quarter of 2021 decreased 11% to Ps. 3,739 million compared to Ps. 4,209 million in the third quarter of 2021. The gross profit as a percentage of net sales for the third and fourth quarter of 2021 was of 30% and 29% respectively.

Operating Expenses 
Selling, general and administrative expenses increased 8% to Ps. 551 million in the fourth quarter of 2021 compared to Ps. 508 million for the third quarter of 2021. Selling, general and administrative expenses as a percentage of net sales for the third and fourth quarter of 2021 was of 4% and 4% respectively.

Other Expenses (Income) net 
The company recorded other net expenses of Ps. 27 million in the fourth quarter of 2021 compared to other net expenses of Ps. 20 million for the third quarter of 2021.

Operating (Loss) Income 
Operating income was of Ps. 3,161 million in the fourth quarter of 2021 compared to an operating income of Ps. 3,681 million in the third quarter of 2021. The operating income as a percentage of net sales represented 26% and 25% for the third quarter and fourth quarter periods respectively.

EBITDA 
The EBITDA was Ps. 3,974 million in the third quarter of 2021 as a result a net income of Ps. 3,313, plus income taxes of Ps. 674, less comprehensive financial cost of Ps. 306, plus depreciation of Ps. 293 compared to Ps. 3,450 million for the fourth quarter of 2021, as a result a net profit of Ps. 1,154, plus minority stake of Ps. 1 million, plus income taxes of Ps. 2,085, less comprehensive financial cost of Ps. 79, plus depreciation of Ps. 289.

Consolidated
Million		Comparative fourth quarter vs third quarter 2021
		4Q 2021				3Q 2021
Net income (loss)			1,154				3,313
Loss attributable to noncontrolling interests			1				0
Net income (loss)			1,155				3,313
Depreciation and amortization			289				293
Income taxes			2,085				674
Financial results income (loss)			(79)				(306)
EBITDA			3,450				3,974
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			3,450				3,974

Comprehensive Financial Income (Cost) 
Comprehensive financial cost for the fourth quarter for 2021 was a net income of Ps. 79 million compared with a net income of Ps. 306 million for the third quarter of 2021. The net interest income the fourth quarter was Ps. 14 million compared with a net expense of Ps. 9 million in the third quarter of 2021. At same time we registered an exchange net profit of Ps. 315 million in the third quarter of 2021 compared with an exchange net profit of Ps. 65 million in the fourth quarter of 2021.

Income Taxes 
Income Taxes for the third quarter of 2021 had an expense net tax of Ps. 674 million (including an expenses tax deferred for Ps. 75 million) compared to an expense of Ps. 2,085 million for the fourth quarter of 2021, (including an expenses tax deferred of Ps. 475 million).

Net Income (loss) 
As a result of the foregoing, the Company recorded a net profit of Ps. 1,154 million in the fourth quarter of 2021 compared to Ps. 3,313 million of net income in the third quarter of 2021.

Comparative fourth quarter 2021 vs fourth quarter 2020

Net Sales 
Net sales increased 27% from Ps. 10,130 million for the fourth quarter of 2020 to Ps. 12,884 million for the fourth quarter of 2021. Sales in tons of finished steel in the fourth quarter of 2020 were 602 thousand tons versus to 550 thousand tons in the fourth quarter of 2021. Total sales outside of Mexico increased 32% from Ps. 4,753 million for the fourth quarter of 2020 to Ps. 6,279 million in the fourth quarter of 2021. Sales in Mexico increased 23% from Ps. 5,377 million in the fourth quarter of 2020 to Ps. 6,605 million in the fourth quarter of 2021. The average sales prices of finished products sold in the fourth quarter of 2021 increased 39%, compared to the same period of 2020.

Cost of Sales 
Cost of sales increased 9% from Ps. 8,356 million in the fourth quarter of 2020 compared to Ps. 9,145 million for the fourth quarter of 2021. With respect to sales, the cost of sales represented 71% during the fourth quarter of 2021 and 82% during the fourth quarter of 2020. The average cost of steel products increased 20% in the fourth quarter of 2021 versus the fourth quarter of 2020.

Gross Profit 
Gross profit for the fourth quarter of 2021 increased 111% from Ps. 1,774 million in the fourth quarter of 2020 compared to Ps. 3,739 million in the fourth quarter of 2021. The gross profit as a percentage of net sales represented 18% for the fourth quarter of 2020 compared to 29% of the fourth quarter of 2021.

Operating Expenses 
Selling, general and administrative expenses decreased 22% from Ps. 704 million in the fourth quarter of 2020 compared to Ps. 551 million for the fourth quarter of 2021. Selling, general and administrative expenses as a percentage of net sales represented 7% for the fourth quarter of 2020 and 4% for the fourth quarter of 2021.

Other Expenses (Income) net 
The company recorded other income net of Ps. 331 million in the fourth quarter of 2020 compared with other expenses net of Ps. 27 million for the fourth quarter of 2021.

Operating (Loss) Income 
Operating income was of Ps. 3,161 million in the fourth quarter of 2021 compared to an operating profit of Ps. 1,401 million in the fourth quarter of 2020. The operating income as a percentage of net sales in the fourth quarter of 2021 was 25%, compared to an operating income of 14% in the fourth quarter of 2020.

EBITDA 
The EBITDA was Ps. 1,895 million in the fourth quarter of 2020 as a result a net loss of Ps. 657, less minority stake of Ps. 4, plus income taxes of Ps. 774, plus comprehensive financial cost of Ps. 1,288, plus depreciation of Ps. 494 compared to a profit of Ps 3,450 million in the fourth quarter of 2021 as a result a net profit of Ps. 1,154, plus minority stake of Ps. 1 million, plus income taxes of Ps. 2,085, less comprehensive financial cost of Ps. 79, plus depreciation of Ps. 289.

Consolidated
Million		Comparative fourth quarter vs fourth quarter
		2021				2020
Net income (loss)			1,154				(657)
Loss attributable to noncontrolling interests			1				(4)
Net income (loss)			1,155				(661)
Depreciation and amortization			289				494
Income taxes			2,085				774
Financial results income (loss)			(79)				1,288
EBITDA			3,450				1,895
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			3,450				1,895

Comprehensive Financial Income (Cost) 
Comprehensive financial cost for the fourth quarter of 2021 was a net income of Ps. 79 million compared with a net expense of Ps 1,288 million in the fourth quarter of 2020. Net interest income was of Ps. 14 million in the fourth quarter of 2021 compared with a net interest income of Ps. 15 million in the fourth quarter of 2020. At same time we registered a net exchange profit of Ps. 65 million in the fourth quarter of 2021 compared with an exchange loss of Ps. 1,303 million in the fourth quarter of 2020.

Income Taxes 
The Company recorded an expense net taxes for the fourth quarter of 2021 of Ps. 2,085 million (including an expense of deferred tax of Ps. 475 million), compared to an expense net tax of Ps. 774 million for the fourth quarter of 2020, (including an expense tax deferred of Ps. 232 million).

Net Income (loss) 
As a result of the foregoing, the Company recorded a net profit of Ps. 1,154 million in the fourth quarter of 2021 compared to Ps. 657 million of net loss in the fourth quarter of 2020.

(million of pesos)	Jan - Dec '21		Jan - Dec '20		Year 21 vs '20
Sales	55,620		35,869		55%
Cost of Sales	39,968		29,212		37%
Gross Profit	15,652		6,657		135%
Selling, General and Administrative Expense	2,043		2,019		1%
Other Income (Expenses), net	(77)		547		(114%)
Operating Profit	13,532		5,185		161%
EBITDA	14,707		6,637		122%
Net income	9,444		2,798		238%
Sales Outside Mexico	27,576		17,746		55%
Sales in Mexico	28,044		18,123		55%
Total Sales (Tons)	2,504		2,441		3%
Cost by ton	15,962		11,967		33%

 

Quarter
(million of pesos)	4Q'21	3Q '21	4Q '20	4Q´21 vs 3Q´21	4Q´21 vs 4Q '20
Sales	12,884	14,122	10,130	(9%)	27%
Cost of Sales	9,145	9,913	8,356	(8%)	9%
Gross Profit	3,739	4,209	1,774	(11%)	111%
Selling, General and Adm. Expenses	551	508	704	8%	(22%)
Other Income (Expenses), net	(27)	(20)	331	35%	(108%)
Operating Profit	3,161	3.681	1,401	(14%)	126%
EBITDA	3,450	3,974	1,895	(13%)	82%
Net Income	1,154	3,313	(657)	(65%)	(276%)
Sales Outside Mexico	6,279	6,838	4,753	(8%)	32%
Sales in Mexico	6,605	7,284	5,377	(9%)	23%
Total Sales (Tons)	550	585	602	(6%)	(9%)
Cost per Ton	16,627	16,945	13,880	(2%)	20%

 

Product	Thousands of Tons Jan-Dec 2021	Millions of Pesos Jan-Dec 2021	Average Price per Ton Jan-Dec 2021	Thousands of Tons Jan – Dec 2020	Millions of Pesos Jan- Dec 2020	Average Price per Ton  Jan-Dec 2020
Special Profiles	907	22,459	24,762	791	13,593	17,185
Commercial Profiles	1,597	33,161	20,765	1,650	22,276	13,501
Total Tons	2,504	55,620	22,212	2,441	35,869	14,694

 

Product	Thousands of Tons Oct-Dec 2021	Millions of Pesos Oct-Dec 2021	Average Price per Ton Oct-Dec 2021	Thousands of Tons Jul-Sep 2021	Millions of Pesos Jul-Sep 2021	Average Price per Ton Jul-Sep 2021	Thousands of Tons Oct-Dec 2020	Millions of Pesos Oct-Dec 2020	Average Price per Ton Oct-Dec 2020
Special Profiles	193	5,343	27,684	225	5,976	26,560	220	3,898	17,718
Commercial Profiles	357	7,541	21,123	360	8,146	22,628	382	6,232	16,314
Total Tons	550	12,884	23,425	585	14,122	24,140	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 the year ending December 31, 2021?

Grupo Simec reported net sales of Ps. 55,620 million for the year ending December 31, 2021.

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

Grupo Simec's net income increased by 238% to Ps. 9,444 million in 2021.

What was the gross profit margin for Grupo Simec in 2021?

The gross profit margin for Grupo Simec in 2021 was 28%.

How did Grupo Simec's sales outside Mexico perform in 2021?

Sales outside Mexico increased by 55% to Ps. 27,576 million in 2021.

What decline did Grupo Simec experience in Q4 2021 compared to Q3 2021?

In Q4 2021, Grupo Simec experienced a 9% decline in net sales and a 65% drop in net income compared to Q3 2021.