GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST SIX MONTHS OF 2023
GUADALAJARA, Mexico, July 20, 2023 /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, 2023.
Comparative first six months of 2023 vs. first six months of 2022
Net Sales
Net sales of the Company decreased from Ps. 30,579 million in the first half of 2022 to Ps. 22,947 million in the first half of 2023. Shipments decreased 6% from 1,179 thousand tons in the first half of 2022 to 1,109 thousand tons in the first half of 2023. Total sales outside of Mexico in the first half of 2023 decreased 32% to Ps. 9,639 million compared to Ps. 14,252 million in the first half of 2022. Mexican sales decreased 18% from Ps. 16,327 million in the first half of 2022 to Ps. 13,308 million in the first half of 2023. Sales decreased for the first half of 2023 compared to the first half of 2022, is due to the combined of decrease in the average sales price of 20% and decrease in the volume of shipments approximately of 70 thousand tons that represent an 6%.
Cost of Sales
Cost of sales decreased 22% from Ps. 21,972 million in the first half of 2022, to Ps. 17,128 million in the first half of 2023. Cost of sales as a percentage of net sales represented 75% in the first half of 2023 while in the first half of 2022 represented 72%. Cost of sales decreased due to mix products and a lower volume of products shipped, and scrap steel cost.
Gross Profit
Gross profit of the Company for the first half of 2023 decreased 32% from Ps. 8,607 million in the first half of 2022, to Ps. 5,819 million in the first half of 2023. Gross profit as percentage of net sales in the first half of 2023 was of 25%, while in the first half of 2022 was of 28%. The gross profit between both periods is given by for less products shipped and lower average price.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased 2%, from Ps. 1,130 million in the first half of 2022 to Ps. 1,102 million in the same period 2023, selling, general and administrative expense represented 4% of the net sales in the second quarter of 2022 and 5% in the second quarter of 2023.
Other Income (Expenses), net
The Company recorded other income net for Ps. 143 million in the first half of 2023 million compared to other income net Ps. 2 million in the same period of 2022.
Operating Income
Operating income decreased 35% from Ps. 7,479 million for the first half of 2022 compared to Ps. 4,860 million in the first half of 2023. Operating income as percentage of net sales was 21% in the first half of 2023 compared to 24% in the same period of 2022. The decrease in operating profit is mainly due to the for less of products shipped and lower sales prices.
Ebitda
The Ebitda amounted to Ps. 8,029 million in the first half of 2022 as a result of 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 to Ps 5,419 million in the first semester of 2023 as a result a net income of Ps. 2,019 million, less minority stake of Ps. 3 million, plus income taxes of Ps. 1,244 million, plus comprehensive financial cost of Ps. 1,600 million, plus depreciation of Ps. 559 million.
Consolidated | |||||||
Million | Comparative first six months of 2023 vs first six months of 2022, | ||||||
2023 | 2022 | ||||||
Net income (loss) | 2,019 | 6,098 | |||||
Loss attributable to noncontrolling interests | (3) | 1 | |||||
Net income (loss) | 2,016 | 6,099 | |||||
Depreciation, depletion and amortization | 559 | 550 | |||||
Income taxes | 1,244 | 1,152 | |||||
Financial results income (loss) | 1,600 | 228 | |||||
EBITDA | 5,419 | 8,029 | |||||
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 | 0 | 0 | |||||
Impairment and disposal of non-current assets | 0 | 0 | |||||
Adjusted EBITDA | 5,419 | 8,029 | |||||
Comprehensive Financial Cost
Comprehensive financial cost for the first half of 2023 represented an expense of Ps. 1,600 million compared with an expense of Ps. 228 million for the first half of 2022. The comprehensive financial cost is comprised by the exchange loss of Ps. 2,009 million in the first half of 2023 compared with an exchange loss of Ps. 228 million in the first half of 2022. Likewise, the Company recorded a net income interest of Ps. 365 million for the first half of 2023 compared with a net expenses interest of Ps. 1 million in 2022, in the first half of 2023 there is a record of other financial income for Ps. 44 million.
Income Taxes
The Company recorded an expense of Ps. 1,244 million for the net income tax during the first half of 2023, (comprised for a current expense tax of Ps. 1,243 million and expense for deferred tax of Ps. 1 million) compared with an expense of Ps. 1,152 million to 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).
Net Income
As a result of the foregoing, the Company recorded a decrease in net income of 67% to pass of Ps. 6,098 million in the first half of 2022 to Ps. 2,019 million in the same period of 2023.
Comparative second quarter of 2023 vs. first quarter of 2023
Net Sales
Net sales of the Company decreased 21% in the second quarter of 2023 compared to the first quarter of the same period, to pass of Ps. 12,825 million during the first quarter of 2023 to Ps. 10,122 million in the second quarter of 2023. Shipments of finished steel products decreased from 604 thousand tons in the first quarter of 2023 to 505 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the second quarter of 2023 decreased 14% to get to Ps. 4,458 million compared to Ps. 5,181 million of the first quarter of the same year. Domestic sales decreased from Ps. 7,644 million in the first quarter of 2023 to Ps. 5,664 million in the second quarter of the same year. The sales decreased mainly a lower shipped by 99 thousand tons compared with the first quarter that represent a 16% and decrease in the average sales price in 6%.
Cost of Sales
Cost of sales decreased 22% from Ps. 9,618 million in the first quarter of 2023 to Ps. 7,510 million in the second quarter of 2023. Cost of sales as a percentage of net sales represented 75% for the first quarter of 2023 compared to 74% in the second quarter of the same year, the average cost of sales by ton records a decrease between both quarters of 7%.
Gross Profit
Gross profit of the Company for the second quarter of 2023 decreased 19% to pass of Ps. 3,207 million in the first quarter of 2023 to Ps. 2,612 million in the second quarter of same year. Gross profit as a percentage of net sales represented 25% for the first quarter of 2023 compared to 26% in the second quarter of the same year. The gross profit in the second quarter of 2023 it originates from a lower average sale price.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased 12%, from Ps. 587 million in the first quarter of 2023 to Ps. 515 million in the second quarter of the same year, and as percentage of net sales represented 5% in the first quarter of 2023 compared to 5% in the second quarter of the same year.
Other (Expenses) Income, net
The Company recorded other income net for Ps. 85 million during the second quarter of 2023 compared to other income net for Ps. 58 million in the first quarter of 2023.
Operating Income
Operating income decreased 19%, of Ps. 2,678 million in the first quarter of 2023 compared to Ps. 2,182 million of the second quarter of the same year. Operating income as percentage of net sales was 21% for the first quarter of 2023 compared to 22% for the second quarter of the same year. The operating income is due mainly to a lower average sale price.
Ebitda
The Ebitda amounted to Ps. 2,959 million in the first quarter of 2023 as a result of a net income of Ps. 1,033 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 531 million, plus comprehensive financial cost of Ps. 1,116 million, plus depreciation of Ps. 281 million to Ps 2,460 million in the second quarter of 2023 as a result of a net income of Ps. 987 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 712 million, plus comprehensive financial cost of Ps. 484 million, plus depreciation of Ps. 279 million.
Consolidated | |||||||
Million | Comparative second quarter of 2023 vs first quarter of 2023, | ||||||
Second quarter | First quarter | ||||||
Net income (loss) | 987 | 1,033 | |||||
Loss attributable to noncontrolling interests | (2) | (2) | |||||
Net income (loss) | 985 | 1,031 | |||||
Depreciation, depletion and amortization | 279 | 281 | |||||
Income taxes | 712 | 531 | |||||
Financial results income (loss) | 484 | 1,116 | |||||
EBITDA | 2,460 | 2,959 | |||||
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 | 0 | 0 | |||||
Impairment and disposal of non-current assets | 0 | 0 | |||||
Adjusted EBITDA | 2,460 | 2,959 | |||||
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the second quarter of 2023 represented an expense of Ps. 484 million compared with of Ps. 1,116 million an expense for the first quarter of 2023. The comprehensive financial cost is comprised for the net interest income of Ps. 175 million in the second quarter of 2023, while in the first quarter was a net income of Ps. 190 million. Likewise, we recorded a net exchange loss of Ps. 703 million in the second quarter of 2023 compared a net exchange loss Ps. 1,306 million in the first quarter of the same year, in the second quarter of 2023 there is a record of other financial income for Ps. 44 million.
Income Taxes
The Company have been recorded an expense of Ps. 712 million of income tax during the second quarter of 2023, (comprised for an expense by current tax of Ps. 711 million and an expense for deferred tax of Ps. 1 million) compared with the Ps. 531 million of expense for the first quarter of the same year, (comprised for an expense by current tax of Ps. 531 million).
Net Income
As a result of the foregoing, the Company recorded a decrease of 5% from a net income of Ps. 1,033 million in the first quarter of 2023 compared to a net income of Ps. 987 million for the second quarter of 2023.
Liquidity and Capital Resources
As of June 30th, 2023, 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 June 30th, 2023 was U.S. $697,000, or Ps. 11.9 million). As of December 31, 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. 5.8 million (accrued interest on December 31, 2022 was U.S. $695,000, or Ps. 13.5 million).
Comparative second quarter of 2023 vs. second quarter of 2022
Net Sales
Net sales of the Company decreased 35% from Ps. 15,547 million during the second quarter of 2022 to Ps. 10,122 million in the second quarter of 2023. Sales in tons of finished steel decreased 9% from 556 thousand tons in the second quarter of 2022 compared with 505 thousand tons in the second quarter of 2023. Sales outside of Mexico in the second quarter of 2023 decreased 39% from Ps. 7,276 million in the second quarter of 2022 to Ps. 4,458 million in the second quarter of 2023. Domestic sales decreased 32% from Ps. 8,271 million in the second quarter of 2022 to Ps. 5,664 million in the second quarter of 2023. The decrease in sales in the second quarter of 2023 compared to the second quarter of 2022 is due to a decrease in the average sales price of 28% and a decrease in the volume of shipments approximately of 51 thousand of tons that represents 9%.
Cost of Sales
Cost of sales decreased 30% in the second quarter of 2023 compared to the second quarter of 2022 from Ps. 10,783 million in the second quarter of 2022 to Ps. 7,510 million in the second quarter of 2023. With respect to sales, the cost of sales of the second quarter of 2023 represented 74% compared to 69% for the second quarter of 2022. The average cost of sales by ton of steel products decreased 23% in the second quarter of 2023 versus the second quarter of 2022, due to the cost of certain raw materials mainly scrap and the lower volume shipped.
Gross (Loss) Profit
Gross profit of the Company for the second quarter of 2023 amount to Ps. 2,612 million compared to Ps. 4,764 million in the second quarter of 2022, this represented a decrease of 45% between both periods. Gross profit as a percentage of net sales for the second quarter of 2023 was 26% compared to 31% of the second quarter of 2022. The decrease in gross profit is mainly due to a lower average sales price and a for less volume shipped, in the second quarter of 2023 compared to the second quarter of 2022.
Selling, General and Administrative Expense
The selling, general and administrative expenses decreased 16% in the second quarter of 2023 from Ps. 612 million in the second quarter of 2022 to Ps. 515 million in the second quarter of 2023. Selling, general and administrative expense as a percentage of net sales represented 5% in the second quarter of 2023 compared to 4% of the second quarter of 2022.
Other Income (Expenses), net
The company recorded other income net of Ps. 85 million in the second quarter of 2023 compared with other income net of Ps. 2 million for the second quarter of 2022.
Operating (Loss) Income
Operating income amounted to Ps. 2,182 million in the second quarter 2023 compared to Ps. 4,154 million in the second quarter of 2022, this represented 47% of decrease between both quarters. The operating income as a percentage of net sales was 22% for the second quarter of 2023, compared to 27% of the second quarter of 2022. The decrease in operating profit is due to a lower average sale price.
Ebitda
The Ebitda amounted 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 to Ps 2,460 million in the second quarter of 2023 as a result of a net income of Ps. 987 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 712 million, plus comprehensive financial cost of Ps. 484 million, plus depreciation of Ps. 279 million.
Consolidated | |||||||
Million | Comparative second quarter of 2023 vs second quarter of 2022, | ||||||
2023 | 2022 | ||||||
Net income (loss) | 987 | 3,604 | |||||
Loss attributable to noncontrolling interests | (2) | 0 | |||||
Net income (loss) | 985 | 3,604 | |||||
Depreciation, depletion and amortization | 279 | 270 | |||||
Income taxes | 712 | 693 | |||||
Financial results income (loss) | 484 | (143) | |||||
EBITDA | 2,460 | 4,424 | |||||
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 | 0 | 0 | |||||
Impairment and disposal of non-current assets | 0 | 0 | |||||
Adjusted EBITDA | 2,460 | 4,424 | |||||
Comprehensive Financial Cost
Comprehensive financial cost of the Company for the second quarter of 2023 represented a net expense of Ps. 484 million compared with a net income of Ps. 143 million for the second quarter of 2022. The comprehensive financial cost is comprised for the net interest income of Ps. 175 million in the second quarter of 2023, compared to a net interest expense of Ps. 29 million for the same period of 2022. Also record an exchange loss of Ps. 703 million in the second quarter of 2023 and an exchange income of Ps. 172 million in the second quarter of 2022 in the second quarter of 2023 there is a record of other financial income for Ps. 44 million.
Income Taxes
The company recorded an expense of Ps. 712 million of expense tax in the second quarter of 2023, (comprised by current expense tax of Ps. 711 million and an expense for deferred tax of Ps. 1 million) compared to an expense accrual of Ps. 693 million for income tax for the second quarter of 2022, (comprised by current expense tax of Ps. 698 million and an income for deferred tax of Ps. 5 million).
Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 987 million in the second quarter of 2023 compared to Ps. 3,604 million for the second quarter of 2022, a decrease of 73% between both quarters.
(millions of pesos) | 1H '23 | 1H '22 | Year 23 VS | ||
Sales | 22,947 | 30,579 | (25 %) | ||
Cost of Sales | 17,128 | 21,972 | (22 %) | ||
Gross Profit | 5,819 | 8,607 | (32 %) | ||
Selling, General and Administrative Expense | 1,102 | 1,130 | (2 %) | ||
Other Income (Expenses), net | 143 | 2 | 7050 % | ||
Operating Profit | 4,860 | 7,479 | (35 %) | ||
EBITDA | 5,419 | 8,029 | (33 %) | ||
Net income | 2,019 | 6,098 | (67 %) | ||
Sales Outside Mexico | 9,639 | 14,252 | (32 %) | ||
Sales in Mexico | 13,308 | 16,327 | (18 %) | ||
Total Sales (Tons) | 1,109 | 1,179 | (6 %) |
Quarter | |||||
(millions of pesos) | 2Q'23 | 1Q '23 | 2Q '22 | 2Q´23vs | 2Q´23 vs |
Sales | 10,122 | 12,825 | 15,547 | (21 %) | (35 %) |
Cost of Sales | 7,510 | 9,618 | 10,783 | (22 %) | (30 %) |
Gross Profit | 2,612 | 3,207 | 4,764 | (19 %) | (45 %) |
Selling, General and Adm. Expenses | 515 | 587 | 612 | (12 %) | (16 %) |
Other Income (Expenses), net | 85 | 58 | 2 | 47 % | 4150 % |
Operating Profit | 2,182 | 2,678 | 4,154 | (19 %) | (47 %) |
EBITDA | 2,460 | 2,959 | 4,424 | (17 %) | (44 %) |
Net Income | 987 | 1,033 | 3,604 | (5 %) | (73 %) |
Sales Outside Mexico | 4,458 | 5,181 | 7,276 | (14 %) | (39 %) |
Sales in Mexico | 5,664 | 7,644 | 8,271 | (26 %) | (32 %) |
Total Sales (Tons) | 505 | 604 | 556 | (16 %) | (9 %) |
Product | Thousands of Tons Jan-Jun 2023 | Millions of Pesos Jan-Jun 2023 | Average Price per Ton Jan-Jun 2023 | Thousands of Tons Jan – Jun 2022 | Millions of Pesos Jan- Jun 2022 | Average Price per Ton Jan-Jun 2022 |
Commercial Profiles | 779 | 15,156 | 19,456 | 776 | 18,783 | 24,205 |
Special Profiles | 330 | 7,791 | 23,609 | 403 | 11,796 | 29,270 |
Total | 1,109 | 22,947 | 20,692 | 1,179 | 30,579 | 25,936 |
Product | Thousands of Tons Apr-Jun 2023 | Millions of Pesos Apr-Jun 2023 | Average Price per Ton Apr-Jun 2023 | Thousands of Tons Jan – Mar 2023 | Millions of Pesos Jan- Mar 2023 | Average Price per Ton Jan-Mar 2023 | Thousands of Tons Apr-Jun 2022 | Millions of Pesos Apr-Jun 2022 | Average Price per Ton Apr-Jun 2022 |
Commercial Profiles | 354 | 6,573 | 18,568 | 425 | 8,583 | 20,195 | 363 | 9,477 | 26,107 |
Special Profiles | 151 | 3,549 | 23,503 | 179 | 4,242 | 23,698 | 193 | 6,070 | 31,451 |
Total | 505 | 10,122 | 20,044 | 604 | 12,825 | 21,233 | 556 | 15,547 | 27,962 |
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.