GRUPO SIMEC, S.A.B. DE C.V. GUADALAJARA, Mexico, July 21, 2016 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the sixth-month period ended June 30, 2016.
Comparative first six months of 2016 vs. first six months of 2015
Net Sales
Net sales of the Company decreased from Ps. 13,204 million in the first half of 2015 to Ps. 12,844 million in the first half of 2016. Shipments of finished steel products decreased 1% from 1,118 thousand tons in the first half of 2015 to 1,102 thousand tons in the first half of 2016. Total sales outside of Mexico in the first half of 2016 decreased 10% to Ps. 5,272 million compared to Ps. 5,879 million in the first half of 2015. Mexican sales increased 3% from Ps. 7,324 million in the first half of 2015 to Ps. 7,572 million in the first half of 2016. Sales decreased for the first half of 2016 compared to the first half of 2015, is due to the combined of decreased in the average sales price of 1% and decrease in the volume of shipments approximately of 16 thousand tons that represent a 1%.
Cost of Sales
Cost of sales decreased 9% from Ps. 11,476 million in the first half of 2015, to Ps. 10,460 million in the first half of 2016. Cost of sales as a percentage of net sales represented 81% in the first half of 2016 while in the first half of 2015 represented 87%. Cost of sales decreased due to the higher volume shipment and the price of certain raw materials.
Gross Profit
Gross profit of the Company for the first half of 2016 increased 38% from Ps. 1,728 million in the first half of 2015, to Ps. 2,384 million in the first half of 2016. Gross profit as percentage of net sales in the first half of 2016 was of 19% while in the first half of 2015 was of 13%. The gross profit between both periods is given by a higher volume of shipments and improved costs of certain raw materials.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased 4%, from Ps. 641 million in the first half of 2015 to Ps. 616 million in the same period 2016, selling, general and administrative expense represented 5% of the net sales in both periods.
Other Income (Expenses,) net
The Company recorded other income net for Ps. 131 million in the first half of 2016 million compared to Ps. 8 million in the same period of 2015.
Operating Income
Operating income increased 73% from Ps. 1,095 million for the first half of 2015 compared to Ps. 1,899 million in the first half of 2016. Operating income as percentage of net sales was 15% in the first half of 2016 compared to 8% in the same period of 2015. The increase in operating income is due to the average cost of production and the mix of products shipped.
Ebitda
The Ebitda of the first half of 2016, increased in Ps 809 million or 49% compared to first half of 2015, due to the better mix shipment and a decrease in the average cost of production. The Ebitda passed of Ps. 1,658 million in the first half of 2015 to Ps. 2,467 million in the first half of 2016.
Comprehensive Financial Cost
Comprehensive financial cost for the first half of 2016 represented an income of Ps. 804 million compared with an income of Ps. 69 million for the first half of 2015. The comprehensive financial cost is comprised by the exchange gain of Ps. 793 million in the first half of 2016 compared with an exchange gain of Ps. 74 million in the first half of 2015. Also the Company recorded a net income interest of Ps. 11 million for the first half of 2016 compared with a net expense interest of Ps.5 million in 2015.
Income Taxes
The Company recorded an income of Ps. 5 million for the net income tax during the first half of 2016, (comprised for a current income tax of Ps. 60 million and an income for deferred income tax of Ps. 65 million) compared with an expense of Ps. 502 million to the first half of 2015 (comprised for a current income tax of Ps. 503 million and an income for deferred income tax of Ps. 1 million).
Net Income
As a result of the foregoing, the Company recorded an increase in net income of 229% to pass of Ps. 853 million in the first half of 2015 to Ps. 2,803 million of the same period of 2016.
Comparative second quarter of 2016 vs. first quarter of 2016
Net Sales
Net sales of the Company increased 10% in the second quarter of 2016 compared to the first quarter of the same period, to pass of Ps. 6,102 million during the first quarter of 2016 to Ps. 6,742 million in the second quarter of 2016. Shipments of finished steel products increased 9% from 528 thousand tons in the first quarter of 2016 to 574 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the second quarter of 2016 increased 19% to get to Ps. 2,861 million compared to Ps. 2,411 million of the first quarter of the same year. Mexican sales show an increase of 5% from Ps. 3,691 million in the first quarter of 2016 to Ps. 3,881 million in the second quarter of the same year. The sales outside of Mexico developed better in the second quarter of 2016 compared to the first quarter of the same year.
Cost of Sales
Cost of sales increased 3% from Ps. 5,158 million in the first quarter of 2016 to Ps. 5,302 million in the second quarter of 2016. Cost of sales as a percentage of net sales represented 85% for the first quarter of 2016 compared to 79% in the second quarter of the same year, the average cost of sales by ton record a decrease between both quarters of 5%.
Gross Profit
Gross profit of the Company for the second quarter of 2016 increased 53% to pass of Ps. 944 million in the first quarter of 2016 to Ps. 1,440 million in the second quarter of same year. Gross profit as a percentage of net sales represented 15% for the first quarter of 2016 compared to 21% in the second quarter of the same year. The gross profit in the second quarter of 2016 is caused by a better average cost of sales and higher products shipped.
Selling, General and Administrative Expense
Selling, general and administrative expense decrease 18%, from Ps. 338 million in the first quarter of 2016 to Ps. 278 million in the second quarter of the same year, and as percentage of net sales represented 4% in the second quarter of 2016 compared to 6% of the first quarter of the same year.
Other (Expenses) Income, net
The Company recorded other income net for Ps. 135 million during the second quarter of 2016 compared to other expense net for Ps. 3 million in the first quarter of 2016.
Operating Income
Operating income increased 115%, of Ps. 603 million in the first quarter of 2016 compared to Ps. 1,297 of the second quarter of the same year. Operating income as percentage of net sales was 10% for the first quarter compared to 19% for the second quarter of the same year. The operating income is due mainly to a decrease in the selling general and administrative expenses of the second quarter 2016.
Ebitda
The Ebitda in the second quarter of 2016 show an increase of 79% compared to the first quarter of the same year, due to previously mentioned. The Ebitda, of the second quarter was of Ps. 1,584 million versus Ps. 883 million in the first quarter of 2016.
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the second quarter of 2016 represented an income of Ps. 535 million compared with an income of Ps. 269 million for the first quarter of 2016. The comprehensive financial cost is comprised for the net interest income of Ps. 10 million in the second quarter of 2016, while in the first quarter was of Ps. 1 million. Also we record a net exchange gain of Ps. 525 million in the second quarter of 2016 compared a net exchange gain of Ps. 268 million in the first quarter of the same year.
Income Taxes
The Company have been recorded an income of Ps. 22 million of income tax during the second quarter of 2016, (comprised for an expense by current income tax of Ps. 18 million and an income for deferred tax of Ps. 40 million) compared with the Ps. 17 million of expense for the first quarter of the same year, (comprised for a current expense tax of Ps. 42 million and of an income for deferred tax of Ps. 25 million).
Net Income
As a result of the foregoing, the Company recorded an increase of 72% from a net income of Ps. 1,032 million in the first quarter of 2016 compared to a net income of Ps. 1,771 million for the second quarter of 2016.
Liquidity and Capital Resources
As of June 30, 2016, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.6 million (accrued interest on June 30, 2016 was U.S. $598,000, or Ps. 11.1 million). As of December 31, 2015, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.2 million (accrued interest on December 31, 2015 was U.S. $584,000, or Ps. 10.1 million).
Comparative second quarter of 2016 vs. second quarter of 2015
Net Sales
Net sales of the Company increased 7% from Ps. 6,307 million during the second quarter of 2015 to Ps. 6,742 million in the second quarter of 2016. Sales in tons of finished steel increased 5% from 545 thousand tons in the second quarter of 2015 compared with 574 thousand tons in the second quarter of 2016. Sales outside of Mexico in the second quarter of 2016 increased 5% from Ps. 2,733 million in the second quarter of 2015 to Ps. 2,861 million in the second quarter of 2016. Mexican sales increased 9% from Ps. 3,574 million in the second quarter of 2015 to Ps. 3,881 million in the second quarter of 2016. The increase in sales in the second quarter of 2016 compared to the second quarter of 2015 is due to an increase in the average sales price of 2% and an increase in the volume of shipments approximately of 28 thousand of tons that represent 5%.
Cost of Sales
Cost of sales decreased 3% in the second quarter of 2016 compared to the second quarter of 2015 from Ps. 5,454 million in the second quarter of 2015 to Ps. 5,302 million in the second quarter of 2016. With respect to sales, the cost of sales of the second quarter of 2016 represented 79% compared to 86% for the second quarter of 2015. The average cost of sales by ton of steel products decreased 8% in the second quarter of 2016 versus the second quarter of 2015, due to the cost of certain raw materials.
Gross (Loss) Profit
Gross profit of the Company for the second quarter of 2016 amount to Ps. 1,440 million compared to Ps. 853 million in the second quarter of 2015, this represented an increase of 69% between both periods. Gross profit as a percentage of net sales for the second quarter of 2016 was 21% compared to 14% of the second quarter of 2015. The increase in gross profit is mainly due to a lower average cost of sales and a higher volume of shipments in the second quarter of 2016 compared with the second quarter of 2015.
Selling, General and Administrative Expense
The selling, general and administrative expenses decreased 24% in the second quarter of 2016 from Ps. 368 million in the second quarter of 2015 to Ps. 278 million in the second quarter of 2016. Selling, general and administrative expense as a percentage of net sales represented 4% in the second quarter of 2016 compared to 6% of the second quarter of 2015.
Other Income (Expenses), net
The company recorded other income net of Ps. 135 million in the second quarter of 2016 compared with other income net of Ps. 5 million for the second quarter of 2015.
Operating (Loss) Income
Operating income amounted to Ps. 1,297 million in the second quarter 2016 compared to Ps. 490 million in the second quarter of 2015, this represent 165% of increase between both quarters. The operating income as a percentage of net sales in the second quarter of 2016 was 19% and 8% in the second quarter of 2015. The increase in the operating income is due to the higher volume shipment and a better average cost of sales in the second quarter of 2016 compared to the same period of 2015.
Ebitda
The Ebitda of the second quarter of 2016 increased compared to the same period of 2015 in 103% from Ps 782 million in the second quarter of 2015 to Ps. 1,584 million of the same period of 2016, this is due to the above explained in the operating income.
Comprehensive Financial Cost
Comprehensive financial cost of the Company for the second quarter of 2016 represented a net income of Ps. 535 million compared with an income of Ps. 50 million for the second quarter of 2015. The comprehensive financial cost is comprised for the net interest income of Ps. 10 million in the second quarter of 2016, compared to a net interest expense of Ps. 1 million for the same period of 2015. Also record an exchange gain of Ps. 525 million in the second quarter of 2016 and an exchange gain of Ps. 51 million in the second quarter of 2015.
Income Taxes
The company recorded an income of Ps. 22 million of income tax in the second quarter of 2016, (comprised for an expense by current income tax of Ps. 18 million and an income for deferred tax of Ps. 40 million) compared to an accrual of Ps. 236 million for expense tax for the second quarter of 2015, (comprised for an income by current income tax of Ps. 228 million and an expense for deferred tax of Ps. 8 million).
Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 1,771 million in the second quarter of 2016 compared to Ps. 412 million for the second quarter of 2015, an increase of 330% between both quarters.
(millions of pesos) 1H '16 1H '15 Year 16 vs
'15
--- ---
Sales 12,844 13,204 (3%)
----- ------ ------ ---
Cost of Sales 10,460 11,476 (9%)
------------- ------ ------ ---
Gross Profit 2,384 1,728 38%
------------ ----- ----- ---
Selling, General and Administrative Expense 616 641 (4%)
------------------------------------------- --- --- ---
Other Income (Expenses), net 131 8 1538%
---------------------------- --- --- ----
Operating Profit 1,899 1,095 73%
---------------- ----- ----- ---
EBITDA 2,467 1,658 49%
------ ----- ----- ---
Net income 2,803 853 229%
---------- ----- --- ---
Sales Outside Mexico 5,272 5,879 (10%)
-------------------- ----- ----- ----
Sales in Mexico 7,572 7,324 3%
--------------- ----- ----- ---
Total Sales (Tons) 1,102 1,118 (1%)
----------------- ----- ----- ---
Quarter
-------
(millions of pesos) 2Q'16 1Q '16 2Q '15 2Q´16vs 2Q´16 vs
1Q´16 2Q '15
--- ----- ------
Sales 6,742 6,102 6,307 10% 7%
----- ----- ----- ----- --- ---
Cost of Sales 5,302 5,158 5,454 3% (3%)
------------- ----- ----- ----- --- ---
Gross Profit 1,440 944 853 53% 69%
------------ ----- --- --- --- ---
Selling, General and Adm. Expenses 278 338 368 (18%) (24%)
---------------------------------- --- --- --- ---- ----
Other Income (Expenses), net 135 (3) 5 4,600% 2,600%
---------------------------- --- --- --- ----- -----
Operating Profit 1,297 603 490 115% 165%
---------------- ----- --- --- --- ---
EBITDA 1,584 883 782 79% 103%
------ ----- --- --- --- ---
Net Income 1,771 1,032 412 72% 330%
---------- ----- ----- --- --- ---
Sales Outside Mexico 2,861 2,411 2,733 19% 5%
-------------------- ----- ----- ----- --- ---
Sales in Mexico 3,881 3,691 3,573 5% 9%
--------------- ----- ----- ----- --- ---
Total Sales (Tons) 574 528 545 9% 5%
----------------- --- --- --- --- ---
Product Thousands Million of Average Thousands Million of Average
of Tons Pesos Price per of Tons Pesos Price per
Jan-Jun 2016 Jan-Jun Ton Jan - Jun Jan- Jun Ton
2016 Jan-Jun 2015 2015 Jan-Jun
2016 2015
--- ---- ----
Commercial Profiles 588 5,443 9,257 583 5,637 9,669
------------------- --- ----- ----- --- ----- -----
Special Profiles 514 7,401 14,399 535 7,567 14,144
---------------- --- ----- ------ --- ----- ------
Total 1,102 12,844 11,655 1,118 13,204 11,810
----- ----- ------ ------ ----- ------ ------
Product Thousands Million of Average Thousands Million of Average Thousands Million of Average
Price per
of Tons Pesos of Tons Pesos Price per of Tons Pesos Price per
Ton
Apr-Jun 2016 Apr-Jun 2016 Jan - Mar Jan-Mar Ton Apr-Jun Apr-Jun 2015 Ton
Apr-Jun
2016 2016 Jan-Mar 2015 Apr-Jun
2016
2016 2015
--- ---- ----
Commercial Profiles 344 3,230 9,390 280 2,629 9,389 283 2,747 9,707
------------------- --- ----- ----- --- ----- ----- --- ----- -----
Special Profiles 230 3,512 15,270 248 3,473 14,004 262 3,560 13,588
---------------- --- ----- ------ --- ----- ------ --- ----- ------
Total 574 6,742 11,746 528 6,102 11,557 545 6,307 11,572
----- --- ----- ------ --- ----- ------ --- ----- ------
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: Sergio Vigil González
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.
