GRUPO SIMEC, S.A.B. DE C.V. GUADALAJARA, Mexico, Oct. 19, 2016 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) (SIMEC-B) ("Simec") announced today its results of operations for the nine-month period ended September 30, 2016.
Comparative first nine months of 2016 vs. first nine months of 2015
Net Sales
Net sales of the Company decreased from Ps. 19,551 million in the first nine months of 2015 to Ps. 19,514 million in the first nine months of 2016. Shipments of finished steel products decreased 2% to 1million 630 thousand tons in the first nine months of 2016 compared to 1million 664 thousand tons in the first nine months of 2015. Total sales outside of Mexico in the first nine months of 2016 decreased 5% to Ps. 7,968 million in the first nine months of 2016 compared to Ps. 8,362 million in the same period of 2015. Mexican sales increased 3% from Ps. 11,189 million in the first nine months of 2015 to Ps. 11,546 million in the same period of f 2016. The decrease in sales for the first nine months of 2016 is due to the decrease in the volume of shipments compared to the first nine months of 2015 (34 thousand tons equivalent to 2% increase). The average sales price by ton increased approximately 2%.
Cost of Sales
Cost of sales decreased 7% from Ps. 17,063 million in the first nine months of 2015, to Ps. 15,894 million in the first nine months of 2016. Cost of sales as a percentage of net sales represented 81% in the first nine months of 2016 while in the first nine months of 2015 represented 87%. Cost of sales by steel ton decreased approximately 5% in the first nine months of 2016 over the same period of 2015 due to a better price in inputs.
Gross Profit
Gross profit of the Company for the first nine months of 2016 increased 45% from Ps. 2,488 million in the first nine months of 2015, to Ps. 3,620 million in the first nine months of 2016. Marginal profit as percentage of net sales in the first nine months of 2016 was of 19% while in the first nine months of 2015 was of 13%. The gross profit increase is given by a better average cost of raw materials.
General, Selling and Administrative Expense
Selling, general and administrative expenses decreased 4%, from Ps.970 million in the first nine months of 2015 to Ps. 933 million in the same period of 2016, selling, general and administrative expenses represented 5% of the net sales for both periods.
Other Income (Expenses), net
The Company recorded other income net for Ps. 200 million during the first nine months of 2016 while in the same periods of 2015 the other income net by this concept was of Ps. 102 million.
Operating Income
Operating income increased 78% from Ps. 1,620 million for the first nine months of 2015 compared to Ps. 2,887 million in the first nine months of 2016. Operating income as percentage of net sales was 15% in the first nine months of 2016 compared to 8% in the same period of 2015. The increase in operating income is due to a better average cost in the first nine months of 2016 compared with the same period of 2015.
Ebitda
The Ebitda increased 54%, from Ps. 2,465 million in the first nine months of 2015 to Ps. 3,788 million in the first nine months of 2016, due to a better average cost of raw materials.
Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2016 represented an income of Ps. 1,211 million compared with an expense of Ps. 40 million for the first nine months of 2015. The net interest income was of Ps. 55 million for the first nine months of 2016, compared with a net interest income of Ps. 4 million in 2015. Also we record an exchange gain of Ps. 1,156 million in the first nine months of 2016 compared with an exchange loss of Ps. 44 million in the first nine months of 2015 due to the slip in the exchange rate of the Ps. against the dollar of 12% in the first nine months of 2016.
Income Taxes
The Company recorded an income of Ps.63 million for the net income tax during the first nine months of 2016, (includes a deferred income tax of Ps. 90 million) compared with an expense of Ps. 1,260 million of income tax for the first nine months of 2015 (includes a deferred income tax of Ps. 162 million).
Net Income
As a result of the foregoing, the Company recorded an increase in net income of 661% to pass of Ps. 560 million in the first nine months of 2015 to Ps. 4,264 million of the same period of 2016.
Liquidity and Capital Resources
At September 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. 5.9 million (accrued interest on September 30, 2016 was U.S. $606,000, or Ps. 11.8 million). At 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. 4.4 million (accrued interest on December 31, 2015 was U.S. $556,000, or Ps. 8.9 million).
Comparative third quarter of 2016 vs. second quarter of 2016
Net Sales
Net sales of the Company decreased to pass of Ps. 6,742 million during the second quarter of 2016 to Ps. 6,671 million in the third quarter of 2016. Shipments of finished steel products decreased to 529 thousand tons in the third quarter of 2016 from 574 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the third quarter of 2016 decreased 30% to get to Ps. 2,017 million compared to Ps. 2,861 million of the second quarter of the same year. Mexican sales show an increase of from Ps. 3,881 million in the second quarter of 2016 to Ps. 4,654 million in the third quarter of the same year. The average selling price increased 7% in the third quarter of 2016 compared to the second quarter of the same year.
Cost of Sales
Cost of sales increased to P s. 5,435 million in the third quarter of 2016 from Ps. 5,302 million in the second quarter of 2016. Cost of sales as a percentage of net sales represented 81% for the third quarter of 2016 compared to 79% for the second quarter of the same year. The cost of sales by ton increases 11% in the third quarter of 2016 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 2016 decreased 14% to pass of Ps. 1,440 million in the second quarter of 2016 to Ps. 1,236 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2016 was of 19% compared to 21% in the second quarter of the same year. The decreased in the gross profit in the third quarter of 2016 is due to a decreased in the average selling price.
General, Selling and Administrative Expense
Selling, general and administrative expense increased 14% to pass of Ps. 278 million in the second quarter of 2016 to Ps. 317 million in the third quarter of the same year, and as percentage of net sales represented 5% for the third quarter of 2016 and 4% for the second quarter of 2016.
Other (Expenses) Income, net
The Company recorded other income net for Ps. 69 million during the third quarter of 2016 compared to other income net for Ps. 135 million in the second quarter of 2016.
Operating Income
The Operating income was of Ps. 988 million in the third quarter of 2016 compared to Ps. 1,297 million in the second quarter of the same year. Operating income as percentage of net sales represented 15% for the third quarter of 2016 and 19% for the second quarter of 2016.
Ebitda
The Ebitda show a decrease of 17%, to pass of Ps 1,584 million in the second quarter of 2016 to Ps. 1,321 million in the third quarter of the same year, this is due to previously mentioned.
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2016 represented an income of Ps. 407 million compared with an income of Ps. 535 million for the second quarter of 2016. The comprehensive financial cost is comprised for: the net interest income of Ps.44 million in the third quarter of 2016 compared to net interest income of 10 million in the second quarter of the same year. Also we record a net exchange profit net of Ps. 363 million in the third quarter of 2016 compared a net exchange profit of Ps. 525 million in the second quarter of the same year.
Income Taxes
The Company have been recorded Ps. 58 million of income tax during the third quarter of 2016, (includes a deferred income tax of Ps.25 million) compared with the Ps. 22 million of income for the second quarter of the same year, (includes a deferred income tax of Ps. 40 million).
Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 1,461 million in the third quarter of 2016 compared to a net income of Ps. 1,771 million for the second quarter of 2016.
Comparative third quarter of 2016 vs. third quarter of 2015
Net Sales
Net sales of the Company increased 5% from Ps. 6,347 million during the third quarter of 2015 to Ps. 6,671 million in the third quarter of 2016. Sales in tons of finished steel decreased to 529 thousand tons in the third quarter of 2016 from 546 thousand tons in the third quarter of 2015. Sales outside of Mexico decreased 19% from Ps. 2,482 million in the third quarter of 2015 to Ps. 2,017 million in the third quarter of 2016. Mexican sales increased 20% from Ps. 3,865 million in the third quarter of 2015 to Ps. 4,654 million in the third quarter of 2016. The average sales price increased approximately 8% in the third quarter of 2016, compared to the same period of the 2015.
Cost of Sales
Cost of sales decreased 3% in the third quarter of 2016 compared to the third quarter of 2015 from Ps. 5,587 million in the third quarter of 2015 to Ps. 5,435 million in the third quarter of 2016. With respect to sales, the cost of sales of the third quarter of 2015 represented 88% compared to 81% for the third quarter of 2016. The average cost of raw materials used to produce steel products were remained in both periods, due to decrease of raw materials prices.
Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2016 increased 63% from Ps. 760 million in the third quarter of 2015 compared to Ps. 1,236 million in the third quarter of 2016. Gross profit as a percentage of net sales for the third quarter of 2016 was 19% compared to 12% of the third quarter of 2015. The increase 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 4% in the third quarter of 2016 to Ps. 317 million in the third quarter of 2016 from Ps.329 million in the third quarter of 2015. Selling, general and administrative expense as a percentage of net sales represented 5% for both periods.
Other Income (Expenses), net
The company recorded other income net of Ps. 69 million in the third quarter of 2016 compared with other income net of Ps. 94 million for the third quarter of 2015.
Operating (Loss) Income
Operating income increased from Ps. 525 million in the third quarter of 2015 compared to Ps. 988 million in the third quarter of 2016, this represent 88% of increase between both quarters. The operating income as a percentage of net sales was 15% for the third quarter of 2016 compared to 8% for the third quarter of 2015. The increase in the operating income is due to a better cost of sales.
Ebitda
The Ebitda of the third quarter of 2016 increased 64% from Ps 806 million in the third quarter of 2015 to Ps. 1,321 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 third quarter of 2016 represented a net income of Ps. 407 million compared with an expense of Ps.109 million for the third quarter of 2015. The comprehensive financial cost is comprised for: the net interest income of Ps. 44 million in the third quarter of 2016, compared to a net interest income of Ps. 9 million for the same period of 2015. Also record an exchange loss of Ps. 118 million in the third quarter of 2015 and an exchange gain of Ps. 363 million in the third quarter of 2016.
Income Taxes
The company recorded an income tax for Ps. 58 million in the third quarter of 2016, (includes a deferred income tax of Ps. 25 million) compared to an expense of Ps. 758 million for income tax for the third quarter of 2015, (includes an accrual of deferred income tax of Ps. 161 million).
Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 1,461 million in the third quarter of 2016 compared to a net loss of Ps. 292 million for the same period of 2015.
(millions of pesos) Jan - Sep '16 Jan - Sep '15 Year '15 vs
'14
--- ---
Sales 19,514 19,551 0%
----- ------ ------ ---
Cost of Sales 15,894 17,063 (7%)
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Gross Profit 3,620 2,488 45%
------------ ----- ----- ---
Selling, General and Administrative Expense 933 970 (4%)
------------------------------------------- --- --- ---
Other Income (Expenses), net 200 102 96%
---------------------------- --- --- ---
Operating Profit 2,887 1,620 78%
---------------- ----- ----- ---
EBITDA 3,788 2,465 54%
------ ----- ----- ---
Net income 4,264 560 661%
---------- ----- --- ---
Sales Outside Mexico 7,968 8,362 (5%)
-------------------- ----- ----- ---
Sales in Mexico 11,546 11,189 3%
--------------- ------ ------ ---
Total Sales (Tons) 1,630 1,664 (2%)
----------------- ----- ----- ---
Cost by ton 9,751 10,254 (5%)
----------- ----- ------ ---
Quarter
-------
(millions of pesos) 3Q '16 2Q '16 3Q '15 3Q' 16 vs 3Q '16 vs
2Q '16 3Q '15
--- ------ ------
Sales 6,671 6,742 6,347 (1%) 5%
----- ----- ----- ----- --- ---
Cost of Sales 5,435 5,302 5,587 3% (3%)
------------- ----- ----- ----- --- ---
Gross Profit 1,236 1,440 760 (14%) 63%
------------ ----- ----- --- ---- ---
Selling, General and Adm. Expenses 317 278 329 14% (4%)
---------------------------------- --- --- --- --- ---
Other Income (Expenses), net 69 135 94 (49%) (27%)
---------------------------- --- --- --- ---- ----
Operating Profit 988 1,297 525 (24%) 88%
---------------- --- ----- --- ---- ---
EBITDA 1,321 1,584 806 (17%) 64%
------ ----- ----- --- ---- ---
Net Income 1,461 1,771 -292 (18%) (600%)
---------- ----- ----- ---- ---- -----
Sales Outside Mexico 2,017 2,861 2,482 (30%) (19%)
-------------------- ----- ----- ----- ---- ----
Sales in Mexico 4,654 3,881 3,865 20% 20%
--------------- ----- ----- ----- --- ---
Total Sales (Tons) 529 574 546 (8%) (3%)
----------------- --- --- --- --- ---
10,274 9,237 10,233 11% 0%
------ ----- ------ --- ---
Product Thousands of Tons Million of Pesos Jan- Average Price per Ton Thousands of Tons Million of Pesos Jan-
Sep 2016 Sep 2015 Average Price per Ton
Jan-Sep 2016 Jan-Sep Jan - Sep 2015 Jan-Sep
2016 2015
--- ---- ----
Special Profiles 686 10,270 14,971 783 10,851 13,865
---------------- --- ------ ------ --- ------ ------
Commercial Profiles 944 9,244 9,792 881 8,700 9,875
------------------- --- ----- ----- --- ----- -----
Total 1,630 19,514 11,972 1,664 19,551 11,749
----- ----- ------ ------ ----- ------ ------
Product Thousands of Tons Million of Pesos Jul- Average Price per Ton Thousands of Tons Million of Pesos Apr- Average Price per Ton Thousands of Tons Jul-Sep Million of Pesos Average Price per Ton Jul-
Sep 2016 Jun Jul-Sep 2015 Sep
Jul-Sep 2016 Jul-Sep Apr-Jun 2016 Apr-Jun 2015 2015
2016 2016 2016
--- ---- ---- ----
Special Profiles 209 3,285 15,718 230 3,512 15,270 247 3,285 13,300
---------------- --- ----- ------ --- ----- ------ --- ----- ------
Commercial Profiles 320 3,386 10,581 344 3,230 9,390 299 3,062 10,240
------------------- --- ----- ------ --- ----- ----- --- ----- ------
Total 529 6,671 12,611 574 6,742 11,746 546 6,347 11,624
----- --- ----- ------ --- ----- ------ --- ----- ------
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.
