GRUPO SIMEC, S.A.B. DE C.V. GUADALAJARA, Mexico, Oct. 28, 2014 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the nine-month period ended September 30, 2014.
Comparative first nine months of 2014 vs. first nine months of 2013
Net Sales
Net sales of the Company increased 7% from Ps. 18,836 million in the first nine months of 2013 to Ps. 20,225 million in the first nine months of 2014. Shipments of finished steel products increased 4% from 1,649 thousand tons in the first nine months of 2014 to 1,580 thousand tons in the first nine months of 2013. Total sales outside of Mexico in the first nine months of 2014 increased 14% to Ps. 10,138 million compared to Ps.8,910 million in the first nine months of 2013. Mexican sales increased 2% from Ps. 9,926 million in the first nine months of 2013 to Ps. 10,087 million in the first nine months of 2014. The increase in sales for the first nine months of 2014 compared to the first nine months of 2013 is due to the increased in the volume of shipments of 69 thousand tons. The average sales price by ton increased approximately 3%.
Cost of Sales
Cost of sales increased 10% from Ps. 16,964 million in the first nine months of 2013, to Ps. 18,635 million in the first nine months of 2014. Cost of sales as a percentage of net sales represented 92% in the first nine months of 2014 while in the first nine months of 2013 represented 90%. Cost of sales by steel ton increased approximately 5% in the first nine months of 2014 over the same period of 2013 due to the minor volume shipment.
Gross Profit
Gross profit of the Company for the first nine months of 2014 decreased 15% from Ps. 1,872 million in the first nine months of 2013, to Ps. 1,590 million in the first nine months of 2014. Marginal profit as percentage of net sales in the first nine months of 2014 was of 8% while in the first nine months of 2013 was of 10%. The gross profit decrease is given by an increase in the average cost of raw materials.
General, Selling and Administrative Expense
Selling, general and administrative expenses decreased 6%, from Ps.883 million in the first nine months of 2013 to Ps. 826 million in the same period 2014, selling, general and administrative expenses represented 4% of the net sales of the first nine months of 2014 and 5% of net sales in the first nine months of 2013.
Other Income (Expenses,) net
The Company recorded other income net for Ps. 58 million during the first nine months of 2014 while in the same periods of 2013 the other income net by this concept was of Ps. 9 million.
Operating Income
Operating income decreased 18% from Ps. 998 million for the first nine months of 2013 compared to Ps. 822 million in the first nine months of 2014. Operating income as percentage of net sales was 4% in the first nine months of 2014 compared to 5% in the same period of 2013. The decreased in operating income is due to a higher average cost in the first nine months of 2014 compared with the same period of 2013.
EBITDA
The EBITDA decreased 15%, from Ps. 1,843 million in the first nine months of 2013 to Ps. 1,571 million in the first nine months of 2014, due to an increase in the average cost of raw materials.
Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2014 represented an income of Ps. 61 million compared with an expense of Ps. 159 million for the first nine months of 2013. The net interest expense was of Ps. 9 million for the first nine months of 2014, compared with a net interest expense of Ps.26 million in 2013. Also we record an exchange profit of Ps.70 million in the first nine months of 2014 compared with an exchange loss of Ps. 133 million in the first nine months of 2013 due to the slip in the exchange rate of the Ps. against the dollar of 3% in the first nine months of 2014.
Income Taxes
The Company recorded an income of Ps. 63 million for the net income tax during the first nine months of 2014, (includes a deferred income tax of Ps. 45 million) compared with an income of Ps. 247 million of income tax for the first nine months of 2013 (includes a deferred income tax of Ps. 141 million).
Net Income
As a result of the foregoing, the Company recorded a decrease in net income of 13% to pass of Ps. 1,366 million in the first nine months of 2013 to Ps. 1,183 million of the same period of 2014.
Liquidity and Capital Resources
At September 30, 2014, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.1 million (accrued interest on September 30, 2014 was U.S. $534,000, or Ps. 7.2 million). At December 31, 2013, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 3.9 million (accrued interest on December 31, 2013 was U.S. $527,000, or Ps. 6.9 million).
Comparative third quarter of 2014 vs. second quarter of 2014
Net Sales
Net sales of the Company increased to pass of Ps. 6,622 million during the second quarter of 2014 to Ps. 7,021 million in the third quarter of 2014. Shipments of finished steel products increased from 536 thousand tons in the second quarter of 2014 to 583 thousand tons in the third quarter of the same year. Total sales outside of Mexico in the third quarter of 2014 increased 2% to get to Ps. 3,482 million compared to Ps. 3,423 million of the second quarter of the same year. Mexican sales show an increase of from Ps. 3,199 million in the second quarter of 2014 to Ps. 3,539 million in the third quarter of the same year. The average selling price decreased 2% in the third quarter of 2014 compared to the second quarter of the same year.
Cost of Sales
Cost of sales increased from Ps. 6,014 million in the second quarter of 2014 to Ps. 6,564 million in the third quarter of 2014. Cost of sales as a percentage of net sales represented 93% for the third quarter of 2014 compared to 91% for the second quarter of the same year. The cost of sales by ton increases 0.3% in the third quarter of 2014 compared to the second quarter of the same year, due mainly to increase of raw materials.
Gross Profit
Gross profit of the Company for the third quarter of 2014 decreased 25% to pass of Ps. 608 million in the second quarter of 2014 to Ps. 457 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2014 was of 7% compared to 9% in the second quarter of the same year. The decreased in the gross profit in the third quarter of 2014 is due to a decreased in the average selling price.
General, Selling and Administrative Expense
Selling, general and administrative expense decreased 4% to pass of Ps. 281 million in the second quarter of 2014 to Ps. 271 million in the third quarter of the same year, and as percentage of net sales represented 4% for both periods.
Other (Expenses) Income, net
The Company recorded other income net for Ps. 49 million during the third quarter of 2014 compared to other income net for Ps. 6 million in the second quarter of 2014.
Operating Income
The Operating income was of Ps. 235 million in the third quarter of 2014 compared to Ps. 333 million in the second quarter of the same year. Operating income as percentage of net sales was 5% for the second quarter of 2014 compared to 3% for the third quarter of the same year. The decrease in operating income is due mainly to a lower average selling price.
EBITDA
The EBITDA show a decrease of 16%, this is due to previously mentioned. The EBITDA, of the third quarter was of Ps. 487 million versus Ps. 582 million in the second quarter of 2014.
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2014 represented an income of Ps. 89 million compared with an expense of Ps. 10 million for the second quarter of 2014. The comprehensive financial cost is comprised for: the net interest expense of Ps. 6 million in the third quarter of 2014 compared to net interest expense of 10 million in the second quarter of the same year. Also we record a net exchange income net of Ps. 83 million in the third quarter of 2014 compared a net exchange loss of Ps. 0 million in the second quarter of the same year.
Income Taxes
The Company have been recorded an income of Ps. 28 million of income tax during the third quarter of 2014, (includes a deferred income tax of Ps.6 million) compared with the Ps. 34 million of income for the second quarter of the same year, (includes a deferred income tax of Ps. 27 million).
Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 460 million in the third quarter of 2014 compared to a net income of Ps. 396 million for the second quarter of 2014.
Comparative third quarter of 2014 vs. third quarter of 2013
Net Sales
Net sales of the Company increased 13% from Ps. 6,211 million during the third quarter of 2013 to Ps. 7,021 million in the third quarter of 2014. Sales in tons of finished steel increased from 527 thousand tons in the third quarter of 2013 compared with 583 thousand tons in the third quarter of 2014. Sales outside of Mexico increased 18% from Ps. 2,941 million in the third quarter of 2013 to Ps. 3,482 million in the third quarter of 2014. Mexican sales increased 8% from Ps. 3,270 million in the third quarter of 2013 to Ps. 3,539 million in the third quarter of 2014. The average sales price increased approximately 2% in the third quarter of 2014, compared to the same period of the 2013.
Cost of Sales
Cost of sales increased 14% in the third quarter of 2014 compared to the third quarter of 2013 from Ps. 5,736 million in the third quarter of 2013 to Ps. 6,564 million in the third quarter of 2014. With respect to sales, the cost of sales of the third quarter of 2013 represented 92% compared to 93% for the third quarter of 2014. The average cost of raw materials used to produce steel products increased 3% in the third quarter of 2014 versus the third quarter of 2013, due to increase of raw materials prices.
Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2014 decreased 4% from Ps. 457 million compared to Ps. 475 million in the third quarter of 2013. Gross profit as a percentage of net sales for the third quarter of 2014 was 7% compared to 8% of the third quarter of 2013. The decrease in gross profit is due an increase in the average selling cost of some raw materials.
General, Selling and Administrative Expense
The selling, general and administrative expense decreased 5% in the third quarter of 2014 from Ps. 271 million in the third quarter of 2014 to Ps. 286 million in the third quarter of 2013. Selling, general and administrative expense as a percentage of net sales represented 4% for the third quarter of 2014 compared to 5% of the third quarter of 2013.
Other Income (Expenses), net
The company recorded other income net of Ps. 49 million in the third quarter of 2014 compared with other expense net of Ps. 0.5 million for the third quarter of 2013.
Operating (Loss) Income
Operating income increased from Ps. 188 million in the third quarter 2013 compared to Ps. 235 million in the third quarter of 2014, this represent 25% of increase between both quarters. The operating income as a percentage of net sales was 3% for both periods. The increase in the operating income is due to a less selling, general and administrative expense and other income.
EBITDA
The EBITDA of the third quarter of 2014 increased 3% from Ps 472 million in the third quarter of 2013 to Ps. 487 million of the same period of 2014, this is due to the above explained in the operating income.
Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2014 represented a net income of Ps. 89 million compared with an income of Ps. 65 million for the third quarter of 2013. The comprehensive financial cost is comprised for: the net interest income of Ps. 6 million in the third quarter of 2014, compared to a net interest expense of Ps. 26 million for the same period of 2013. Also record an exchange gain of Ps. 91 million in the third quarter of 2013 and an exchange gain of Ps. 83 million in the third quarter of 2014.
Income Taxes
The company recorded an income for income tax for Ps. 28 million in the third quarter of 2014, (includes a deferred income tax of Ps. 6 million) compared to an income of Ps. 144 million for income tax for the third quarter of 2013, (includes an accrual of deferred income tax of Ps. 60 million).
Net Income (Loss)
As a result of the foregoing, the Company net income was of Ps. 460 million in the third quarter of 2014 compared to a net income of Ps. 509 million for the same period of the 2013.
(millions of pesos) Jan - Sep '14 Jan - Sep '13 Year 14 vs
'13
--- ---
Sales 20,225 18,836 7%
----- ------ ------ ---
Cost of Sales 18,635 16,964 10%
------------- ------ ------ ---
Gross Profit 1,590 1,872 (15%)
------------ ----- ----- ----
Selling, General and Administrative Expense 826 883 (6%)
------------------------------------------- --- --- ---
Other Income (Expenses), net 58 9 544%
---------------------------- --- --- ---
Operating Profit 822 998 (18%)
---------------- --- --- ----
EBITDA 1,571 1,843 (15%)
------ ----- ----- ----
Net income 1,183 1,366 (13%)
---------- ----- ----- ----
Sales Outside Mexico 10,138 8,910 14%
-------------------- ------ ----- ---
Sales in Mexico 10,087 9,926 2%
--------------- ------ ----- ---
Total Sales (Tons) 1,649 1,580 4%
----------------- ----- ----- ---
Cost by ton 11,301 10,737 5%
----------- ------ ------ ---
Quarter
-------
(millions of pesos) 3Q'14 2Q '14 3Q '13 3Q´14vs 3Q´14 vs
2Q´14 3Q '13
--- ----- ------
Sales 7,021 6,622 6,211 6% 13%
----- ----- ----- ----- --- ---
Cost of Sales 6,564 6014 5,736 9% 14%
------------- ----- ---- ----- --- ---
Gross Profit 457 608 475 (25%) (4%)
------------ --- --- --- ---- ---
Selling, General and Adm. Expenses 271 281 286 (4%) (5%)
---------------------------------- --- --- --- --- ---
Other Income (Expenses), net 49 6 0 717% (100%)
---------------------------- --- --- --- --- -----
Operating Profit 235 333 188 (29%) 25%
---------------- --- --- --- ---- ---
EBITDA 487 582 472 (16%) 3%
------ --- --- --- ---- ---
Net Income 460 396 509 16% (10%)
---------- --- --- --- --- ----
Sales Outside Mexico 3,482 3,423 2,941 2% 18%
-------------------- ----- ----- ----- --- ---
Sales in Mexico 3,539 3,199 3,270 11% 8%
--------------- ----- ----- ----- --- ---
Total Sales (Tons) 583 536 527 9% 11%
----------------- --- --- --- --- ---
11,259 11,220 10,884 0% 3%
------ ------ ------ --- ---
Product Thousands of Million of Average Price Thousands of Million of Average Price
Tons Pesos per Ton Tons Pesos per Ton
Jan-Sep 2014
Jan-Sep 2014 Jan-Sep Jan-Sep 2013 Jan- Sep 2013 Jan-Sep
2014 2013
--- ---- ----
Special Profiles 946 13,380 14,144 909 12,332 13,562
---------------- --- ------ ------ --- ------ ------
Commercial Profiles 703 6,845 9,737 671 6,504 9,703
------------------- --- ----- ----- --- ----- -----
Total 1,649 20,225 12,265 1,580 18,836 11,925
----- ----- ------ ------ ----- ------ ------
Product Thousands Million of Average Thousands Million of Average Thousands Million of Average
of Tons Pesos Price per of Tons Pesos Price per of Tons Pesos Price
Jul-Sep 2014 Jul-Sep 2014 Ton Apr-Jun Apr-Jun Ton Jul-Sep Jul-Sep 2013 per Ton
Jul-Sep 2014 2014 Apr-Jun 2013 Jul-Sep
2014 2014 2013
--- ---- ---- ----
Special Profiles 311 4,326 13,910 314 4,509 14,360 314 4,197 13,370
---------------- --- ----- ------ --- ----- ------ --- ----- ------
Commercial Profiles 272 2,695 9,908 222 2,113 9,518 213 2,014 9,438
------------------- --- ----- ----- --- ----- ----- --- ----- -----
Total 583 7,021 12,043 536 6,622 12,354 527 6,211 11,779
----- --- ----- ------ --- ----- ------ --- ----- ------
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: Sergio Vigil Gonzalez
Mario Moreno Cortez
Grupo Simec, S.A.B. de C.V.
Calzada Lazaro Cardenas 601
44440 Guadalajara, Jalisco,
México
52 55 1165 1025
52 33 3770 6734
SOURCE Grupo Simec, S.A.B. de C.V.
