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GRUPO SIMEC, S.A.B. DE C.V.

(SIM)
  Report
Delayed Nyse  -  03:34 2022-09-28 pm EDT
29.45 USD   +2.40%
09/28Grupo Simec, S.a.b.de C.v. (nyse : Sim) protect yourself from fraud
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07/21Grupo Simec B De C : ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST SIX MONTHS OF 2022 - Form 6-K
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07/20Grupo simec announces results of operations for the first six months of 2022
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GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST SIX MONTHS OF 2022

07/20/2022 | 03:41pm EDT

GUADALAJARA, Mexico, July 20, 2022 /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 30th, 2022.

Comparative first six months of 2022 vs. first six months of 2021

Net Sales

Net sales of the Company increased from Ps. 28,613 million in the first half of 2021 to Ps. 30,579 million in the first half of 2022. Shipments decreased 14% from 1,369 thousand tons in the first half of 2021 to 1,179 thousand tons in the first half of 2022. Total sales outside of Mexico in the first half of 2022 decreased 1% to Ps. 14,252 million compared to Ps. 14,458 million in the first half of 2021. Mexican sales increased 15% from Ps. 14,155 million in the first half of 2021 to Ps. 16,327 million in the first half of 2022. Sales increased for the first half of 2022 compared to the first half of 2021, is due to the combined of increase in the average sales price of 24% and decrease in the volume of shipments approximately of 190 thousand tons that represent an 14%. 

Cost of Sales

Cost of sales increased 5% from Ps. 20,909 million in the first half of 2021, to Ps. 21,972 million in the first half of 2022. Cost of sales as a percentage of net sales represented 72% in the first half of 2022 while in the first half of 2021 represented 73%. Cost of sales increased due to mix products and a higher volume of products shipped, and scrap steel cost.

Gross Profit

Gross profit of the Company for the first half of 2022 increased 12% from Ps. 7,704 million in the first half of 2021, to Ps. 8,607 million in the first half of 2022. Gross profit as percentage of net sales in the first half of 2022 was of 28%, while in the first half of 2021 was of 27%. The gross profit between both periods is given by better mix products shipped and higher average price.

Selling, General and Administrative Expense

Selling, general and administrative expense increased 15%, from Ps. 984 million in the first half of 2021 to Ps. 1,130 million in the same period 2022, selling, general and administrative expense represented 3% of the net sales in the second quarter of 2021 and 4% in the second quarter of 2022.

Other Income (Expenses,) net

The Company recorded other income net for Ps. 2 million in the first half of 2022 million compared to other expense Ps. 30 million in the same period of 2021.

Operating Income

Operating income increased 12% from Ps. 6,690 million for the first half of 2021 compared to Ps. 7,479 million in the first half of 2022. Operating income as percentage of net sales was 24% in the first half of 2022 compared to 23% in the same period of 2021. The increase in operating profit is mainly due to the mix of products shipped and higher sales prices.

Ebitda

The Ebitda amounted to Ps. 7,283 million in the first semester of 2021 as a result of a net income of Ps. 4,977 million, plus minority stake of Ps. 1 million, plus income taxes of Ps.1,631 million, plus comprehensive financial cost of Ps. 81 million, plus depreciation of Ps. 593 million to Ps 8,029 million in the first semester of 2022 as a result a net income of Ps. 6,098 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 1,152 million, plus comprehensive financial cost of Ps. 228 million, plus depreciation of Ps. 550 million.

                                                   Consolidated 



Million  


Comparative first six months of 2022 vs first six months of 2021,



2022



2021

Net income (loss)



6,098




4,977

Loss attributable to noncontrolling interests



1




1

Net income (loss)



6,099




4,978

Depreciation, depletion and amortization



550




593

Income taxes



1,152




1,631

Financial results income (loss)



228




81

EBITDA



8,029




7,283









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



8,029




7,283

 

Comprehensive Financial Cost 

Comprehensive financial cost for the first half of 2022 represented an expense of Ps. 228 million compared with an expense of Ps. 81 million for the first half of 2021. The comprehensive financial cost is comprised by the exchange loss of Ps. 227 million in the first half of 2022 compared with an exchange loss of Ps. 55 million in the first half of 2021. Likewise, the Company recorded a net expense interest of Ps. 1 million for the first half of 2022 compared with a net expenses interest of Ps. 26 million in 2021.

Income Taxes

The Company recorded an expense of Ps. 1,152 million for the net income tax during the first half of 2022, (comprised for a current expense tax of Ps. 1,165 million and income for deferred tax of Ps. 13 million) compared with an expense of Ps. 1,631 million to the first half of 2021 (comprised for a current expense tax of Ps. 1,610 million and expense for deferred tax of Ps. 21 million).

Net Income

As a result of the foregoing, the Company recorded an increase in net income of 23% to pass of Ps. 4,977 million in the first half of 2021 to Ps. 6,098 million in the same period of 2022.

Comparative second quarter of 2022 vs. first quarter of 2022

Net Sales

Net sales of the Company increased 3% in the second quarter of 2022 compared to the first quarter of the same period, to pass of Ps. 15,032 million during the first quarter of 2022 to Ps. 15,547 million in the second quarter of 2022. Shipments of finished steel products decreased from 623 thousand tons in the first quarter of 2022 to 556 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the second quarter of 2022 increased 4% to get to Ps. 7,276 million compared to Ps. 6,976 million of the first quarter of the same year. Domestic sales increased from Ps. 8,056 million in the first quarter of 2022 to Ps. 8,271 million in the second quarter of the same year. The sales increased mainly a lower shipped by 67 thousand tons compared with the first quarter that represent a 11% and an income sales price in 16%.

Cost of Sales

Cost of sales decreased 4% from Ps. 11,190 million in the first quarter of 2022 to Ps. 10,783 million in the second quarter of 2022. Cost of sales as a percentage of net sales represented 74% for the first quarter of 2022 compared to 69% in the second quarter of the same year, the average cost of sales by ton record an increase between both quarters of 8%.

Gross Profit

Gross profit of the Company for the second quarter of 2022 increased 24% to pass of Ps. 3,842 million in the first quarter of 2022 to Ps. 4,764 million in the second quarter of same year. Gross profit as a percentage of net sales represented 26% for the first quarter of 2022 compared to 31% in the second quarter of the same year. The gross profit in the second quarter of 2022 it originates from a higher average sale.

Selling, General and Administrative Expense

Selling, general and administrative expense increased 18%, from Ps. 518 million in the first quarter of 2022 to Ps. 612 million in the second quarter of the same year, and as percentage of net sales represented 3% in the first quarter of 2022 compared to 4% in the second quarter of the same year.

Other (Expenses) Income, net

The Company recorded other income net for Ps. 2 million during the second quarter of 2022 compared to other income net for Ps. 1 million in the first quarter of 2022.

Operating Income

Operating income increased 25%, of Ps. 3,325 million in the first quarter of 2022 compared to Ps. 4,154 million of the second quarter of the same year. Operating income as percentage of net sales was 22% for the first quarter of 2022 compared to 27% for the second quarter of the same year. The operating income is due mainly to a better average sale price.

Ebitda

The Ebitda amounted to Ps. 3,605 million in the first quarter of 2022 as a result of a net income of Ps. 2,494 million, plus income taxes of Ps. 460 million, plus comprehensive financial cost of Ps. 371 million, plus depreciation of Ps. 280 million to Ps 4,424 million in the second quarter of 2022 as a result of a net income of Ps. 3,604 million, plus income taxes of Ps. 693 million, less comprehensive financial cost of Ps. 143 million, plus depreciation of Ps. 270 million.

 

Consolidated 



Million  


Comparative second quarter of 2022 vs first quarter of 2022,



Second quarter



First quarter

Net income (loss)



3,604




2,494

Loss attributable to noncontrolling interests








Net income (loss)



3,604




2,494

Depreciation, depletion and amortization



270




280

Income taxes



693




460

Financial results income (loss)



(143)




371

EBITDA



4,424




3,605









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



4,424




3,605

 

Comprehensive Financial Cost

Comprehensive financial cost of the Company in the second quarter of 2022 represented an income of Ps. 143 million compared with of Ps. 371 million an expense for the first quarter of 2022. The comprehensive financial cost is comprised for the net interest expense of Ps. 29 million in the second quarter of 2022, while in the first quarter was a net income of Ps. 29 million. Likewise, we recorded a net exchange income of Ps. 172 million in the second quarter of 2022 compared a net exchange loss Ps. 400 million in the first quarter of the same year.

Income Taxes

The Company have been recorded an expense of Ps. 693 million of income tax during the second quarter of 2022, (comprised for an expense by current tax of Ps. 698 million and an income for deferred tax of Ps. 5 million) compared with the Ps. 460 million of expense for the first quarter of the same year, (comprised for an expense by current tax of Ps. 467 million and income for deferred tax of Ps. 7 million).

Net Income

As a result of the foregoing, the Company recorded an increase of 45% from a net income of Ps. 2,494 million in the first quarter of 2022 compared to a net income of Ps. 3,604 million for the second quarter of 2022.

Liquidity and Capital Resources

As of June 30th, 2022, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 6.1 million (accrued interest on June 30th, 2022 was U.S. $684,000, or Ps. 13.8 million).  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, or Ps. 6.2 million (accrued interest on December 31, 2021 was U.S. $671,000, or Ps. 13.8 million).

Comparative second quarter of 2022 vs. second quarter of 2021

Net Sales

Net sales of the Company increased 2% from Ps. 15,258 million during the second quarter of 2021 to Ps. 15,547 million in the second quarter of 2022. Sales in tons of finished steel decreased 19% from 687 thousand tons in the second quarter of 2021 compared with 556 thousand tons in the second quarter of 2022. Sales outside of Mexico in the second quarter of 2022 decreased 6% from Ps. 7,767 million in the second quarter of 2021 to Ps. 7,276 million in the second quarter of 2022. Domestic sales increased 10% from Ps. 7,491 million in the second quarter of 2021 to Ps. 8,271 million in the second quarter of 2022. The increase in sales in the second quarter of 2022 compared to the second quarter of 2021 is due to an increase in the average sales price of 26% and an decrease in the volume of shipments approximately of 131 thousand of tons that represents 19%.

Cost of Sales

Cost of sales decreased 1% in the second quarter of 2022 compared to the second quarter of 2021 from Ps. 10,854 million in the second quarter of 2021 to Ps. 10,783 million in the second quarter of 2022. With respect to sales, the cost of sales of the second quarter of 2022 represented 69% compared to 71% for the second quarter of 2021. The average cost of sales by ton of steel products increased 23% in the second quarter of 2022 versus the second quarter of 2021, due to the cost of certain raw materials mainly scrap and the volume shipped.

Gross (Loss) Profit

Gross profit of the Company for the second quarter of 2022 amount to Ps. 4,764 million compared to Ps. 4,404 million in the second quarter of 2021, this represented an increase of 8% between both periods. Gross profit as a percentage of net sales for the second quarter of 2022 was 31% compared to 29% of the second quarter of 2021. The increase in gross profit is mainly due to a higher average sales price and a lower volume shipped, in the second quarter of 2022 compared to the second quarter of 2021.

Selling, General and Administrative Expense

The selling, general and administrative expenses increased 20% in the second quarter of 2022 from Ps. 509 million in the second quarter of 2021 to Ps. 612 million in the second quarter of 2022. Selling, general and administrative expense as a percentage of net sales represented 4% in the second quarter of 2022 compared to 3% of the second quarter of 2021.

Other Income (Expenses), net

The company recorded other income net of Ps. 2 million in the second quarter of 2022 compared with other expense net of Ps. 17 million for the second quarter of 2021.

Operating (Loss) Income

Operating income amounted to Ps. 4,154 million in the second quarter 2022 compared to Ps. 3,878 million in the second quarter of 2021, this represented 7% of increase between both quarters. The operating income as a percentage of net sales was 27% for the second quarter of 2022, compared to 25% of the second quarter of 2021. The increase in operating profit is due to a higher average sale price.

Ebitda

The Ebitda amounted to Ps. 4,170 million in the second quarter of 2021 as a result of a net income of Ps. 2,333 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 1,240 million, plus comprehensive financial cost of Ps. 304 million, plus depreciation of Ps. 292 million to Ps 4,424 million in the second quarter of 2022 as a result of a net income of Ps. 3,604 million, plus income taxes of Ps. 693 million, less comprehensive financial cost of Ps. 143 million, plus depreciation of Ps. 270 million.

Consolidated 



Million


Comparative second quarter of 2022 vs second quarter of 2021,



2022



2021

Net income (loss)



3,604




2,333

Loss attributable to noncontrolling interests







1

Net income (loss)



3,604




2,334

Depreciation, depletion and amortization



270




292

Income taxes



693




1,240

Financial results income (loss)



(143)




304

EBITDA



4,424




4,170









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



4,424




4,170

 

Comprehensive Financial Cost 

Comprehensive financial cost of the Company for the second quarter of 2022 represented a net income of Ps. 143 million compared with a net expense of Ps. 304 million for the second quarter of 2021. The comprehensive financial cost is comprised for the net interest expense of Ps. 29 million in the second quarter of 2022, compared to a net interest expense of Ps. 9 million for the same period of 2021. Also record an exchange income of Ps. 172 million in the second quarter of 2022 and an exchange loss of Ps. 295 million in the second quarter of 2021.

Income Taxes

The company recorded an expense of Ps. 693 million of expense tax in the second quarter of 2022, (comprised by current expense tax of Ps. 698 million and an income for deferred tax of Ps. 5 million) compared to an expense accrual of Ps. 1,240 million for income tax for the second quarter of 2021, (comprised by current expense tax of Ps. 1,210 million and an expense for deferred tax of Ps. 30 million).

Net Income (Loss)

As a result of the foregoing, the Company recorded a net income of Ps. 3,604 million in the second quarter of 2022 compared to Ps. 2,333 million for the second quarter of 2021, an increase of 54% between both quarters.

 

(millions of pesos)

1H '22


1H '21


Year 22 VS
 '21

Sales

30,579


28,613


7 %

Cost of Sales

21,972


20,909


5 %

Gross Profit

8,607


7,704


12 %

Selling, General and Administrative Expense

1,130


984


15 %

Other Income (Expenses), net

2


(30)


(107 %)

Operating Profit

7,479


6,690


12 %

EBITDA

8,029


7,283


10 %

Net income 

6,098


4,977


23 %

Sales Outside Mexico

14,252


14,458


(1 %)

Sales in Mexico

16,327


14,155


15 %

Total Sales (Tons)

1,179


1,369


(14 %)

 

 

Quarter






(millions of pesos)

2Q'22

1Q '22

2Q '21

2Q´22 vs
1Q´22

2Q´22 vs
2Q '21

Sales

15,547

15,032

15,258

3 %

2 %

Cost of Sales

10,783

11,190

10,854

(4 %)

(1 %)

Gross Profit

4,764

3,842

4,404

24 %

8 %

Selling, General and Adm. Expenses

612

518

509

18 %

20 %

Other Income (Expenses), net

2

1

(17)

100 %

(112 %)

Operating Profit

4,154

3,325

3,878

25 %

7 %

EBITDA

4,424

3,605

4,170

23 %

6 %

Net Income

3,604

2,494

2,333

45 %

54 %

Sales Outside Mexico

7,276

6,976

7,767

4 %

(6 %)

Sales in Mexico

8,271

8,056

7,491

3 %

10 %

Total Sales (Tons)

556

623

687

(11 %)

(19 %)

 

 

Product

Thousands of Tons

Jan-Jun 2022

Millions of Pesos

Jan-Jun 2022

Average Price per Ton

Jan-Jun

2022

Thousands of Tons

Jan – Jun 2021

Millions of Pesos

Jan- Jun 2021

Average Price per Ton

 Jan-Jun

2021

Commercial Profiles

776

18,783

24,205

880

17,473

19,856

Special Profiles

403

11,796

29,270

489

11,140

22,781






















Total

1,179

30,579

25,936

1,369

28,613

20,901








 

 

Product

Thousands of Tons

Apr-Jun 2022

Millions of Pesos

Apr-Jun 2022

Average Price per Ton

Apr-Jun 2022

Thousands of Tons

Jan – Mar 2022

Millions of Pesos

Jan- Mar 2022

Average Price per Ton

Jan-Mar 2022

Thousands of Tons

Apr-Jun 2021

Millions of Pesos

Apr-Jun 2021

Average Price per Ton

Apr-Jun 2021

Commercial Profiles

363

9,477

26,107

413

9,306

22,533

 

445

9,358

21,029

Special Profiles

193

6,070

31,451

210

5,726

27,267

 

242

5,900

24,380































Total

556

15,547

27,962

623

15,032

24,128

687

15,258

22,210











 

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.


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