Grupo Simec Announces Results of Operations for the Twelve-Month Period Ended December 31, 2020 Audited

Rhea-AI Summary

Grupo Simec reported its operational results for the year ending December 31, 2020. Net sales rose by 5% to Ps. 35,869 million driven by a 4% increase in finished steel shipments. Cost of sales decreased by 3%, leading to a 62% growth in gross profit, totaling Ps. 6,658 million. Operating income soared 123% to Ps. 5,185 million, while EBITDA surged 93% to Ps. 6,637 million. Net income reached Ps. 2,957 million compared to a loss of Ps. 1,636 million in 2019. Comprehensive financial costs improved, and liquidity remained stable.

Positive

• Net sales increased 5% to Ps. 35,869 million.
• Gross profit rose 62% to Ps. 6,658 million.
• Operating income surged 123% to Ps. 5,185 million.
• EBITDA grew 93% to Ps. 6,637 million.
• Net income reached Ps. 2,957 million, up from a loss of Ps. 1,636 million.

Negative

• Selling, general, and administrative expenses rose 23% to Ps. 2,019 million.
• Cost of sales as a percentage of net sales increased to 81% in 2020.

GUADALAJARA, Mexico, May 3, 2021 /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, 2020 audited and December 31, 2019 audited.

Twelve-Month Period Ended December 31, 2020 audited compared to Twelve-Month Period Ended December 31, 2019 audited

Net Sales
Net sales increased 5% by the combination of higher shipments of finished steel products and a higher average sales price by 1% compared the same period of 2019, the sales increased from Ps. 34,171 million in the twelve-month period ended December 31, 2019 to Ps. 35,869 million in the same period of 2020. Shipments of finished steel products increased 4% to 2 million 441 thousand tons in the twelve-month period ended December 31, 2020 compared to 2 million 349 thousand tons in the same period of 2019. Total sales outside of Mexico on the twelve-month period ended December 31, 2020 increased 6% to Ps. 17,746 million compared with Ps. 16,736 million in the same period of 2019. Total sales in Mexico increased 4% from Ps. 17,435 million in the twelve-month period ended December 31, 2019 to Ps. 18,123 million in the same period of 2020. The increase of 5% in sales is due to a higher average sales price and higher volume of shipments.

Cost of Sales
Cost of sales decreased 3% from Ps. 30,067 million in the twelve-month period ended December 31, 2019 to Ps. 29,212 million in the same period of 2020. Cost of sales as a percentage of net sales represented, 81% for 2020 and 2019 88%. The average cost of finished steel produced in the twelve-month period ended December 31, 2020 compared to the same period of 2019 decreased 7% due to higher costs of some supplies at year end.

Gross Profit
Gross profit of the Company in the twelve-month period ended December 31, 2020 was of Ps. 6,658 million compared to Ps. 4,104 million in the same period of 2019. Gross profit as a percentage of net sales represented 19% and 12% for the 2020 and 2019 periods respectively.

Operating Expenses
Selling, general and administrative expenses increased 23% from Ps. 1,637 million in the twelve-month period ended December 31, 2019 to Ps. 2,019 million in the same period of 2020. Selling, general and administrative expenses as a percentage of net sales represented 5% during the twelve-month period ended December 31, 2019 and 6% in the same period of 2020.

Other Expenses (Income) net
The company recorded other net expenses of Ps. 137 million in the twelve-month period ended December 31, 2019 compared to other net income of Ps. 547 million in the same period of 2020.

Operating Income
Operating income increased 123% from Ps. 2,330 million for the twelve-month period ended December 31, 2019 to Ps. 5,185 million in the same period of 2020. Operating income as a percentage of net sales represented 14% and 7% for the 2020 and 2019 periods respectively.

EBITDA
The EBITDA of the Company increased 93% from Ps. 3,439 million in the twelve-month prior ended December 31, of 2019, generating a net loss of Ps. 1,636, less minority stake of Ps. 3, plus income taxes of Ps. 3,276, plus comprehensive financial cost of Ps. 694, plus depreciation of Ps. 1,108 to Ps. 6,637 million in the same period of 2020 as a result a net income of Ps. 2,957, plus income taxes of Ps. 1,919, plus comprehensive financial cost of Ps. 309, plus depreciation of 1,452.

Consolidated
Million		Twelve-month peri4od ended December 31,
		2020				2019
Net income (loss) attributable to Vale's stockholders			2,957				(1,636)
Loss attributable to noncontrolling interests			0				(4)
Net income (loss)			4,178				(1,640)
Depreciation, depletion and amortization			1,452				1,109
Income taxes			1,919				3,276
Financial results income (loss)			309				694
EBITDA			6,729				3,439
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			6,637				3,439

Comprehensive Financial Cost 
Comprehensive financial cost in the twelve-month period ended December 31, 2020 represented a net expense of Ps. 309 million compared with a net expense of Ps. 694 million in the same period of 2019. The net interest was an income of Ps. 54 million in 2020 compared with a net income of Ps. 91 million in the twelve-month period ended December 31, 2019. As a result, we registered a net exchange loss of Ps. 363 million in the twelve-month period ended December 31, 2020 compared with a net exchange loss of Ps. 785 million in the same period of 2019, reflecting a 5.63% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2020 compared to December 31, 2019.

Income Taxes
The Company have recorded an expense net tax of Ps. 1,919 million in the twelve-month period ended December 31, 2020 (including the income of deferred tax of Ps. 81 million) compared with a net expense tax of Ps. 3,276 million in the same period of 2019 (including the tax deferred expense of Ps. 202 million).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, net income increased by 281% from Ps. 1,636 million net loss in the twelve-month period ended December 31, 2019 to Ps. 2,957 million a result net income in the same period of 2020. 

Liquidity and Capital Resources
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).  As of December 31, 2019, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 5.7 million (accrued interest on December 31, 2019 was U.S. $676,758, or Ps. 12.8 million).

Comparative fourth quarter 2020 vs third quarter 2020

Net Sales 
Net sales increased from Ps. 9,643 million in the third quarter of 2020 to Ps. 10,130 million for the fourth quarter of 2020. Sales in tons decreased from 676 thousand ton in the third quarter of 2020 to 602 thousand ton in the fourth quarter of the same period, a decrease of 11%. Total sales outside of Mexico for the fourth quarter of 2020 decreased 1% from Ps. 4,824 million in the third quarter to Ps. 4,753 million in the four quarter of 2020. Sales in Mexico increased to Ps. 5,377 million in the fourth quarter of 2020 compared Ps. 4,819 million in the third quarter of 2020 and increase of 12%. Prices of finished products sold in the fourth quarter of 2020 increased 18% compared with the third quarter of the same period.

Cost of Sales
Cost of sales increased to Ps. 8,356 million in the fourth quarter of 2020 compared to Ps. 7,682 million for the third quarter of 2020. With respect to sales, in the fourth quarter of 2020, the cost of sales represented 82% in the fourth quarter of 2020, compared to 80% in the third quarter of the same period. The average cost of sales by ton increased 22% in the fourth quarter of 2020 versus the third quarter of 2020.

Gross Profit
Gross profit of the Company for the fourth quarter of 2020 decreased 10% to Ps. 1,774 million compared to Ps. 1,961 million in the third quarter of 2020. The gross profit as a percentage of net sales for the third and fourth quarter of 2020 was of 20% and 18% respectively.

Operating Expenses
Selling, general and administrative expenses increased 57% to Ps. 703 million in the fourth quarter of 2020 compared to Ps. 449 million for the third quarter of 2020. Selling, general and administrative expenses as a percentage of net sales for the third and fourth quarter of 2020 was of 7% and 5% respectively.

Other Expenses (Income) net
The company recorded other net income of Ps. 331 million in the fourth quarter of 2020 compared to other net income of Ps. 56 million for the third quarter of 2020.

Operating (Loss) Income
Operating income was of Ps. 1,401 million in the fourth quarter of 2020 compared to an operating income of Ps. 1,568 million in the third quarter of 2020. The operating income as a percentage of net sales represented 14% and 16% for the third quarter and fourth quarter periods respectively.

EBITDA
The EBITDA was Ps. 1,891 million in the third quarter of 2020 as a result a net income of Ps. 1,003, less minority stake of Ps. 1 million, plus income taxes of Ps. 352, plus comprehensive financial cost of Ps. 214, plus depreciation of Ps. 323 compared to Ps. 1,895 million for the fourth quarter of 2020, as a result a net loss of Ps. 498, less minority stake of Ps. 4 million, plus income taxes of Ps. 615, plus comprehensive financial cost of Ps. 1,288, plus depreciation of Ps. 494.

 

Consolidated
Million		Comparative fourth quarter vs third quarter 2020
		4Q 2020				3Q 2020
Net income (loss) attributable to Vale's stockholders			(498)				1,003
Loss attributable to noncontrolling interests			(4)				(1)
Net income (loss)			(502)				1,002
Depreciation, depletion and amortization			494				323
Income taxes			615				352
Financial results income (loss)			1,288				214
EBITDA			1,987				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			1,895				1,891

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter for 2020 was a net expense of Ps. 1,288 million compared with a net expense of Ps. 214 million for the third quarter of 2020. The net interest income the fourth quarter was Ps. 15 million compared with a net expense of Ps. 6 million in the third quarter of 2020. At same time we registered an exchange net loss of Ps. 208 million in the third quarter of 2020 compared with an exchange net loss of Ps. 1,303 million in the fourth quarter of 2020.

Income Taxes
Income Taxes for the third quarter of 2020 had an expense net tax of Ps. 352 million (including an expenses tax deferred for Ps. 18 million) compared to an expense of Ps. 615 million for the fourth quarter of 2020, (including an income tax deferred of Ps. 66 million).

Net Income (loss)
As a result of the foregoing, the Company recorded a net loss of Ps. 498 million in the fourth quarter of 2020 compared to Ps. 1,003 million of net income in the third quarter of 2020.

Comparative fourth quarter 2020 vs fourth quarter 2019

Net Sales
Net sales increased 38% from Ps. 7,315 million for the fourth quarter of 2019 to Ps. 10,130 million for the fourth quarter of 2020. Sales in tons of finished steel in the fourth quarter of 2019 were 570 thousand tons versus to 602 thousand tons in the fourth quarter of 2020. Total sales outside of Mexico increased 36% from Ps. 3,497 million for the fourth quarter of 2019 to Ps. 4,753 million in the fourth quarter of 2020. Sales in Mexico increased 41% from Ps. 3,818 million in the fourth quarter of 2019 to Ps. 5,377 million in the fourth quarter of 2020. The average sales prices of finished products sold in the fourth quarter of 2020 increased 31%, compared to the same period of 2019.

Cost of Sales
Cost of sales increased 22% from Ps. 6,835 million in the fourth quarter of 2019 compared to Ps. 8,356 million for the fourth quarter of 2020. With respect to sales, the cost of sales represented 82% during the fourth quarter of 2020 and 93% during the fourth quarter of 2019. The average cost of steel products increased 16% in the fourth quarter of 2020 versus the fourth quarter of 2019.

Gross Profit
Gross profit for the fourth quarter of 2020 increased 270% from Ps. 480 million in the fourth quarter of 2019 compared to Ps. 1,774 million in the fourth quarter of 2020. The gross profit as a percentage of net sales represented 7% for the fourth quarter of 2019 compared to 18% of the fourth quarter of 2020.

Operating Expenses
Selling, general and administrative expenses increased 33% from Ps. 530 million in the fourth quarter of 2019 compared to Ps. 703 million for the fourth quarter of 2020. Selling, general and administrative expenses as a percentage of net sales represented 7% for the fourth quarter of 2019 and 7% for the fourth quarter of 2020.

Other Expenses (Income) net
The company recorded other expenses net of Ps. 298 million in the fourth quarter of 2019 compared with other income net of Ps. 331 million for the fourth quarter of 2020.

Operating (Loss) Income
Operating income was of Ps. 1,401 million in the fourth quarter of 2020 compared to an operating loss of Ps. 348 million in the fourth quarter of 2019. The operating income as a percentage of net sales in the fourth quarter of 2020 was 14%, compared to an operating loss of -5% in the fourth quarter of 2019.

EBITDA
The EBITDA was Ps. -42 million in the fourth quarter of 2019 as a result a net loss of Ps. 3,229, plus minority stake of Ps. 124, plus income taxes of Ps. 2,970, less comprehensive financial cost of Ps. 213, plus depreciation of Ps. 306 compared to a profit of Ps 1,895 million in the fourth quarter of 2020 as a result a net loss of Ps. 498, less minority stake of Ps. 4 million, plus income taxes of Ps. 615, plus comprehensive financial cost of Ps. 1,288, plus depreciation of Ps. 494.

Consolidated
Million		Comparative fourth quarter vs fourth quarter
		2020				2019
Net income (loss) attributable to Vale's stockholders			(498)				(3,229)
Loss attributable to noncontrolling interests			(4)				124
Net income (loss)			(502)				(3,105)
Depreciation, depletion and amortization			494				306
Income taxes			615				2,970
Financial results income (loss)			1.288				(213)
EBITDA			1,987				(42)
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			1,895				(42)

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter of 2020 was a net expense of Ps. 1,288 million compared with a net income of Ps 213 million in the fourth quarter of 2019. Net interest income was of Ps. 15 million in the fourth quarter of 2020 compared with a net interest expense of Ps. 40 million in the fourth quarter of 2019. At same time we registered a net exchange loss of Ps. 1,303 million in the fourth quarter of 2020 compared with an exchange income of Ps. 253 million in the fourth quarter of 2019.

Income Taxes
The Company recorded an expense net taxes for the fourth quarter of 2020 of Ps. 615 million (including an expense of deferred tax of Ps. 66 million), compared to an expense taxes of Ps. 2,970 million for the fourth quarter of 2019, (including an income tax deferred of Ps. 128 million).

Net Income (loss)
As a result of the foregoing, the Company recorded a net loss of Ps. 498 million in the fourth quarter of 2020 compared to Ps. 3,229 million of net loss in the fourth quarter of 2019.

(million of pesos)	Jan - Dec '20		Jan - Dec '19		Year 20 vs  '19
Sales	35,869		34,171		5%
Cost of Sales	29,212		30,067		(3%)
Gross Profit	6,658		4,104		62%
Selling, General and Administrative Expense	2,019		1,637		23%
Other Income (Expenses), net	547		(137)		500%
Operating Profit	5,185		2,330		123%
EBITDA	6,637		3,439		93%
Net income	2,957		(1,636)		281%
Sales Outside Mexico	17,746		16,736		6%
Sales in Mexico	18,123		17,435		4%
Total Sales (Tons)	2,441		2,349		4%
Cost by ton	11,967		12,800		(7%)

 

Quarter
(million of pesos)	4Q'20	3Q '20	4Q '19	4Q´20vs 3Q´20	4Q´20 vs 4Q '19
Sales	10,130	9,643	7,315	5%	38%
Cost of Sales	8,356	7,682	6,835	9%	22%
Gross Profit	1,774	1,961	480	(10%)	270%
Selling, General and Adm. Expenses	703	449	530	57%	33%
Other Income (Expenses), net	331	56	(298)	491%	211%
Operating Profit	1,401	1.568	(348)	(11%)	503%
EBITDA	1,895	1,891	(42)	0%	4613%
Net Income	(498)	1,003	(3,229)	(150%)	(85%)
Sales Outside Mexico	4,753	4,824	3,497	(1%)	36%
Sales in Mexico	5,377	4,819	3,818	12%	41%
Total Sales (Tons)	602	676	570	(11%)	6%
Cost per Ton	13,881	11,364	11,991	22%	16%

 

Product	Thousands of Tons Jan-Dec 2020	Millions of Pesos Jan-Dec 2020	Average Price per Ton Jan-Dec 2020	Thousands of Tons Jan – Dec 2019	Millions of Pesos      Jan- Dec 2019	Average Price per Ton  Jan-Dec2019
Special Profiles	791	13,593	17,185	851	15,384	18,078
Commercial Profiles	1,650	22,276	13,501	1,498	18,787	12,541
Total Tons	2,441	35,869	14,694	2,349	34,171	14,547

 

Product	Thousands of Tons Oct-Dec 2020	Millions of Pesos Oct-Dec 2020	Average Price per Ton Oct-Dec 2020	Thousands of Tons Jul-Sep 2020	Millions of Pesos  Jul-Sep 2020	Average Price per Ton Jul-Sep 2020	Thousands of Tons Oct-Dec 2019	Millions of Pesos Oct-Dec 2019	Average Price per Ton Oct-Dec 2019
Special Profiles	220	3,898	17,718	215	3,551	16,516	191	3,042	15,927
Commercial Profiles	382	6,232	16,314	461	6,092	13,215	379	4,273	11,274
Total Tons	602	10,130	16,827	676	9,643	14,265	570	7,315	12,833

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 : 
Jose 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.