GRUPO SIMEC, S.A.B. DE C.V. GUADALAJARA, Mexico, Oct. 25, 2018 /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, 2018.
Comparative first nine months of 2018 vs. first nine months of 2017
Net Sales
Net sales of the Company increased to Ps. 26,880 million in the first nine months of 2018 compared to Ps. 21,892 million in the first nine months of 2017. Shipments of finished steel products increased 1% to 1 million 631 thousand tons in the first nine months of 2018 compared to 1million 617 thousand tons in the first nine months of 2017. Total sales outside of Mexico in the first nine months of 2018 increased 19% to Ps. 11,532 million compared to Ps. 9,710 million in the same period of 2017. Mexican sales increased 26% from Ps. 12,182 million in the first nine months of 2017 to Ps. 15,348 million in the same period of f 2018. The increase in sales for the first nine months of 2018 is due to an increase in the average selling price in 22% and a higher volume of shipments compared to the first nine months of 2017 (14 thousand tons equivalent to 1% increase).
Cost of Sales
Cost of sales increased 24% from Ps. 18,154 million in the first nine months of 2017, to Ps. 22,465 million in the first nine months of 2018. Cost of sales as a percentage of net sales represented 84% in the first nine months of 2018 while in the first nine months of 2017 represented 83%. Cost of sales by steel ton increased approximately 23% in the first nine months of 2018 over the same period of 2017 due to a higher price in inputs.
Gross Profit
Gross profit of the Company for the first nine months of 2018 increased 18% from Ps. 3,738 million in the first nine months of 2017, to Ps. 4,415 million in the first nine months of 2018. Marginal profit as percentage of net sales in the first nine months of 2018 was of 16% while in the first nine months of 2017 was of 17%. The gross profit increase is given by a better average selling price.
General, Selling and Administrative Expense
Selling, general and administrative expenses decreased 15%, from Ps. 965 million in the first nine months of 2017 to Ps. 820 million in the same period of 2018, selling, general and administrative expenses represented 3% to the 2018 and 4% to the 2017 of the net sales for both periods.
Other Income (Expenses,) net
The Company recorded other expenses net for Ps. 20 million during the first nine months of 2018 while in the same period of 2017 the other income net by this concept was of Ps. 8 million.
Operating Income
Operating income increased 31% from Ps. 2,765 million for the first nine months of 2017 compared to Ps. 3,615 million in the first nine months of 2018. Operating income as percentage of net sales was 13% in both periods. The increase in operating income is due to better average sales prices.
Ebitda
The Ebitda increased 15%, from Ps. 3,856 million in the first nine months of 2017 as a result of a net income of Ps. 2,031 million, plus minority stake of Ps. 152 million, less income taxes of Ps. 25 million, plus comprehensive financial cost of Ps. 607 million, plus depreciation of Ps. 1,091 million to Ps 4,419 million in the same period of 2018 as a result of a net income of Ps. 3,186 million, less minority stake of Ps. 30 million, plus income taxes of Ps. 251 million, plus comprehensive financial cost of Ps. 148 million, plus depreciation of Ps. 804.
Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2018 represented an expense of Ps. 148 million compared with an expense of Ps. 607 million for the first nine months of 2017. The net interest expense was of Ps. 17 million for the first nine months of 2018, compared with a net interest income of Ps. 4 million in the same period of 2017. Likewise, we record an exchange loss of Ps. 131 million in the first nine months of 2018 compared with an exchange loss of Ps. 611 million in the first nine months of 2017 due to the slip in the exchange rate of the Ps. against the dollar of 5% in the first nine months of 2018.
Income Taxes
The Company recorded an expense of Ps.251 million for the net income tax during the first nine months of 2018, (includes a deferred expense tax of Ps. 124 million) compared with an income of Ps. 25 million of income tax for the first nine months of 2017 (includes a deferred income tax of Ps. 174 million).
Net Income
As a result of the foregoing, the Company recorded an increase in net income of 57% to pass of Ps. 2,031 million in the first nine months of 2017 to Ps. 3,186 million of the same period of 2018.
Liquidity and Capital Resources
At September 30, 2018, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.7 million (accrued interest on September 30, 2018 was U.S. $ 641,000, or Ps. 12.1 million). At December 31, 2017, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 6.0 million (accrued interest on December 31, 2017 was U.S. $ 640,000, or Ps. 12.6 million).
Comparative third quarter of 2018 vs. second quarter of 2018
Net Sales
Net sales of the Company increased to pass of Ps. 9,073 million during the second quarter of 2018 to Ps. 9,858 million in the third quarter of 2018. Shipments of finished steel products increased to 538 thousand tons in the third quarter of 2018 from 537 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the third quarter of 2018 increased 23% to get to Ps. 4,544 million compared to Ps. 3,681 million of the second quarter of the same year. Mexican sales in the third quarter of 2018 decreased to Ps. 5,314 million compared to Ps. 5,392 million in the second quarter of the same year. The average selling price increased 8% in the third quarter of 2018 compared to the second quarter of the same year.
Cost of Sales
Cost of sales increased to P s. 8,420 million in the third quarter of 2018 from Ps. 7,706 million in the second quarter of 2018. Cost of sales as a percentage of net sales represented 85% for both periods. The cost of sales by ton increases 9% in the third quarter of 2018 compared to the second quarter of the same year, due mainly to increase of some supplies for the manufacture of steel.
Gross Profit
Gross profit of the Company for the third quarter of 2018 increased 5% to pass of Ps. 1,367 million in the second quarter of 2018 to Ps. 1,438 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2018 was of 15% compared to 15% in the second quarter of the same year. The increased in the gross profit in the third quarter of 2018 is due to an increased in the average selling price.
General, Selling and Administrative Expense
Selling, general and administrative expense decreased 5% to pass of Ps. 281 million in the second quarter of 2018 to Ps. 267 million in the third quarter of the same year, and as percentage of net sales represented 3% for both periods.
Other (Expenses) Income, net
The Company recorded other income net for Ps. 0.3 million during the third quarter of 2018 compared to other income net for Ps. 43 million in the second quarter of 2018.
Operating Income
The Operating income was of Ps. 1,171 million in the third quarter of 2018 compared to Ps. 1,129 million in the second quarter of the same year. Operating income as percentage of net sales represented 12% for the third quarter of 2018 and 12% for the second quarter of 2018.
Ebitda
The Ebitda show an increase of 4%, to pass of Ps 1,387 million in the second quarter of 2018 as a result of a net income of Ps. 682 million, less minority stake of Ps. 40 million, plus income taxes of Ps. 274 million, plus comprehensive financial cost of Ps. 213 million, plus depreciation of Ps. 258 million to Ps. 1,449 million in the third quarter of the same year as a result of a net income of Ps. 1,391 million, plus minority stake of Ps. 51 million, plus income taxes of Ps. 107 million, less comprehensive financial cost of Ps. 378 million, plus depreciation of Ps. 278 million.
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2018 represented an income of Ps. 378 million compared with an expense of Ps. 213 million for the second quarter of 2018. The comprehensive financial cost is comprised for: the net interest income of Ps. 5 million in the third quarter of 2018 compared to net interest expense of 373 million in the second quarter of the same year. Also, we record a net exchange profit of Ps. 373 million in the third quarter of 2018 compared a net exchange expense of Ps. 182 million in the second quarter of the same year.
Income Taxes
The Company have been recorded Ps. 107 million of expense tax during the third quarter of 2018, (includes a deferred expense tax of Ps. 123 million) compared with the Ps. 274 million of expense for the second quarter of the same year, (includes a deferred expense tax of Ps. 156 million).
Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 1,391 million in the third quarter of 2018 compared to a net income of Ps. 682 million for the second quarter of 2018.
Comparative third quarter of 2018 vs. third quarter of 2017
Net Sales
Net sales of the Company increased 45% from Ps. 6,810 million during the third quarter of 2017 to Ps. 9,858 million in the third quarter of 2018. Sales in tons of finished steel increased to 538 thousand tons in the third quarter of 2018 from 533 thousand tons in the third quarter of 2017. Sales outside of Mexico increased 59% from Ps. 2,855 million in the third quarter of 2017 to Ps. 4,544 million in the third quarter of 2018. Mexican sales increased 34% from Ps. 3,955 million in the third quarter of 2017 to Ps. 5,314 million in the third quarter of 2018. The average sales price increased approximately 43% in the third quarter of 2018, compared to the same period of the 2017.
Cost of Sales
Cost of sales increased 44% in the third quarter of 2018 compared to the third quarter of 2017 from Ps. 5,856 million in the third quarter of 2017 to Ps. 8,420 million in the third quarter of 2018. With respect to sales, the cost of sales of the third quarter of 2017 represented 86% compared to 85% for the third quarter of 2018. The average cost of raw materials used to produce steel products increased in 42%, due to an increase of raw materials prices.
Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2018 increased 51% from Ps. 954 million in the third quarter of 2017 compared to Ps. 1,438 million in the third quarter of 2018. Gross profit as a percentage of net sales for the third quarter of 2018 was 15% compared to 14% of the third quarter of 2017. The increase in gross profit is given by better mix products shipped and better average sales price.
General, Selling and Administrative Expense
The selling, general and administrative expense increased 18% in the third quarter of 2018 to Ps. 267 million in the third quarter of 2018 from Ps. 227 million in the third quarter of 2017. Selling, general and administrative expense as a percentage of net sales represented 3% during both periods.
Other Income (Expenses), net
The company recorded other income net of Ps. 0.3 million in the third quarter of 2018 compared with other income net of Ps. 5 million for the third quarter of 2017.
Operating (Loss) Income
Operating income increased from Ps. 732 million in the third quarter of 2017 compared to Ps. 1,171 million in the third quarter of 2018, this represent 60% of increase between both quarters. The operating income as a percentage of net sales was 12% for the third quarter of 2018 compared to 11% for the third quarter of 2017. The increase in the operating income is due to a better mix products shipped and better average sales price.
Ebitda
The Ebitda of the third quarter increased 35% from Ps 1,072 million in the third quarter of 2017 as a result of a net income of Ps. 737 million, plus minority stake of Ps. 113 million, plus income taxes of Ps. 27 million, less comprehensive financial cost of Ps. 145 million, plus depreciation of Ps. 340 million to Ps. 1,449 million of the same period of 2018, as a result of a net income of Ps. 1,391 million, plus minority stake of Ps. 51 million, plus income taxes of Ps. 107 million, less comprehensive financial cost of Ps. 378 million, plus depreciation of Ps. 278 million.
Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2018 represented a net income of Ps. 378 million compared with an income of Ps. 145 million for the third quarter of 2017. The comprehensive financial cost is comprised for: the net interest income of Ps. 1 million in the third quarter of 2017, compared to a net interest income of Ps. 5 million for the same period of 2018. Also record an exchange gain of Ps. 146 million in the third quarter of 2017 and an exchange gain of Ps. 373 million in the third quarter of 2018.
Income Taxes
The company recorded an expense tax for Ps. 107 million in the third quarter of 2018, (includes a deferred expense tax of Ps. 123 million) compared to an expense of Ps. 27 million for income tax for the third quarter of 2017, (includes an accrual of deferred income tax of Ps. 51 million).
Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 1,391 million in the third quarter of 2018 compared to a net income of Ps. 737 million for the same period of 2017.
(millions of pesos) | Jan - Sep '18 | Jan - Sep '17 | Year 18 vs | ||
Sales | 26,880 | 21,892 | 23% | ||
Cost of Sales | 22,465 | 18,154 | 24% | ||
Gross Profit | 4,415 | 3,738 | 18% | ||
Selling, General and Administrative Expense | 820 | 965 | (15%) | ||
Other Income (Expenses), net | 20 | -8 | (350%) | ||
Operating Profit | 3,615 | 2,765 | 31% | ||
EBITDA | 4,419 | 3,856 | 15% | ||
Net income | 3,186 | 2,031 | 57% | ||
Sales Outside Mexico | 11,532 | 9,710 | 19% | ||
Sales in Mexico | 15,348 | 12,182 | 26% | ||
Total Sales (Tons) | 1,631 | 1,617 | 1% | ||
Cost by ton | 13,774 | 11,227 | 23% |
Quarter | |||||
(millions of pesos) | 3Q'18 | 2Q '18 | 3Q '17 | 3Q´18vs | 3Q´18 vs |
Sales | 9,858 | 9,073 | 6,810 | 9% | 45% |
Cost of Sales | 8,420 | 7,706 | 5,856 | 9% | 44% |
Gross Profit | 1,438 | 1,367 | 954 | 5% | 51% |
Selling, General and Adm. Expenses | 267 | 281 | 227 | (5%) | 18% |
Other Income (Expenses), net | 0.3 | 43 | 5 | 100% | (100%) |
Operating Profit | 1,171 | 1,129 | 732 | 4% | 60% |
EBITDA | 1,449 | 1,387 | 1,072 | 4% | 35% |
Net Income | 1,391 | 682 | 737 | 104% | 89% |
Sales Outside Mexico | 4,544 | 3,681 | 2,855 | 23% | 59% |
Sales in Mexico | 5,314 | 5,392 | 3,955 | (1%) | 34% |
Total Sales (Tons) | 538 | 537 | 533 | 0% | 1% |
Cost per Tons | 15,651 | 14,350 | 10,987 | 9% | 42% |
Product | Thousands of Jan-Sep 2018 | Million of | Average Price Jan-Sep 2018 | Thousands of Jan – Sep | Million of | Average Price 2017 |
Special Profiles | 670 | 13,116 | 19,576 | 650 | 11,401 | 17,540 |
Commercial Profiles | 961 | 13,764 | 14,308 | 967 | 10,491 | 10,849 |
Total | 1,631 | 26,880 | 16,481 | 1,617 | 21,892 | 13,539 |
Product | Thousands Jul-Sep | Million of | Average Jul-Sep 2018 | Thousands of Tons Apr-Jun 2018 | Million of 2018 | Average Apr-Jun 2018 | Thousands of 2017 | Million of | Average 2017 |
Special Profiles | 201 | 4,077 | 20,283 | 198 | 4,162 | 21,020 | 210 | 3,552 | 16,914 |
Commercial Profiles | 337 | 5,758 | 17,086 | 339 | 4,911 | 14,484 | 323 | 3,258 | 10,087 |
Total | 538 | 9,835 | 18,281 | 537 | 9,073 | 16,896 | 533 | 6,810 | 12,777 |
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 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.
