Grupo Simec Announces Results Of Operations For The Twelve-Month Period Ended December 31, 2018 Audited

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GUADALAJARA, Mexico, May 3, 2019 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the twelve-month period ended December 31, 2018 and December 31, 2017. audited

Twelve-Month Period Ended December 31, 2018 audited compared to Twelve-Month Period Ended December 31, 2017 audited

Net Sales
Net sales increased 24% by the combination of higher shipments of finished steel products and a higher average sales price by 19% compared the same period of 2017, the sales increased from Ps. 28,700 million in the twelve-month period ended December 31, 2017 to Ps. 35,678 million in the same period of 2018. Shipments of finished steel products increased 5% to 2 million 191 thousand tons in the twelve-month period ended December 31, 2018 compared to 2 million 091 thousand tons in the same period of 2017. Total sales outside of Mexico on the twelve-month period ended December 31, 2018 increased 26% to Ps. 15,958 million compared with Ps. 12,669 million in the same period of 2017. Total sales in Mexico increased 23% from Ps. 16,031 million in the twelve-month period ended December 31, 2017 to Ps. 19,720 million in the same period of 2018. The increase of 24% in sales is due to a higher average sales price and higher volume of shipments.

Cost of Sales
Cost of sales increased 27% from Ps. 23,994 million in the twelve-month period ended December 31, 2017 to Ps. 30,563 million in the same period of 2018. Cost of sales as a percentage of net sales represented, 86% for 2018 and for 2017 84%. The average cost of finished steel produced in the twelve-month period ended December 31, 2018 compared to the same period of 2017 increased 22% due to higher costs of some supplies at year end.

Gross Profit
Gross profit of the Company in the twelve-month period ended December 31, 2018 was of Ps. 5,115 million compared to Ps. 4,706 million in the same period of 2017. Gross profit as a percentage of net sales represented 14% and 16% for the 2018 and 2017 periods respectively.

Operating Expenses
Selling, general and administrative expenses decreased 13% from Ps. 1,239 million in the twelve-month period ended December 31, 2017 to Ps. 1,080 million in the same period of 2018. Selling, general and administrative expenses as a percentage of net sales represented 4% during the twelve-month period ended December 31, 2017 and 3% in the same period of 2018.

Other Expenses (Income) net
The company recorded other net income of Ps. 7 million in the twelve-month period ended December 31, 2017 compared to other net income of Ps. 15 million in the same period of 2018.

Operating Income
Operating income increased 17% from Ps. 3,474 million for the twelve-month period ended December 31, 2017 to Ps. 4,050 million in the same period of 2018. Operating income as a percentage of net sales represented 11% and 12% for the 2018 and 2017 periods respectively.

EBITDA
The EBITDA of the Company increased 4% from Ps. 4,940 million in the twelve-month prior ended December 31, of 2017, as a result a net gain of Ps. 1,722, plus income taxes of Ps. 1,098, plus comprehensive financial cost of Ps. 655, plus depreciation of Ps. 1,465 to Ps. 5,162 million in the same period of 2018 generating a net income of Ps. 3,516, less minority stake of  Ps. 206, plus income taxes of Ps. 675, plus comprehensive financial cost of Ps. 65, plus depreciation of 1,112.

Comprehensive Financial Cost 
Comprehensive financial cost in the twelve-month period ended December 31, 2018 represented a net expense of Ps. 65 million compared with a net expense of Ps. 655 million in the same period of 2017. The net interest was an income of Ps. 86 million in 2018 compared with a net expense of Ps. 0 million in the twelve-month period ended December 31, 2017. As a result, we registered a net exchange loss of Ps. 151 million in the twelve-month period ended December 31, 2018 compared with a net exchange loss of Ps. 655 million in the same period of 2017, reflecting a 0.4% decrease in the value of the peso versus the dollar in the twelve-month period ended December 31, 2018 compared to December 31, 2017.

Income Taxes
The Company have recorded an expense net tax of Ps. 675 million in the twelve-month period ended December 31, 2018 (including the expense of deferred income tax of Ps. 241 million) compared with a net expense tax of Ps. 1,098 million in the same period of 2017 (including the tax deferred income of Ps. 1,078 million).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, net income increased by 104% from Ps. 1,722 million in the twelve-month period ended December 31, 2017 to a net income of Ps. 3,516 million in the same period of 2018. 

Liquidity and Capital Resources
As of December 31, 2018, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 5.9 million (accrued interest on December 31, 2018 was U.S. $649,044 or Ps. 12.8 million).  As of 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, Ps. 6.0 million (accrued interest on December 31, 2017 was U.S. $640,017, or Ps. 12.6 million).

Comparative fourth quarter 2018 vs third quarter 2018

Net Sales
Net sales decreased from Ps. 9,858 million in the third quarter of 2018 to Ps. 8,798 million for the fourth quarter of 2018. Sales in tons increased from 538 thousand ton in the third quarter of 2018 to 585 thousand ton in the fourth quarter of the same period, an increase of 9%. Total sales outside of Mexico for the fourth quarter of 2018 decreased 3% from Ps. 4,544 million in the third quarter to Ps. 4,426 million in the four quarter of 2018. Sales in Mexico decreased to Ps. 4,372 million in the fourth quarter of 2018 compared Ps. 5,314 million in the third quarter of 2018 a decrease of 18%. Prices of finished products sold in the fourth quarter of 2018 decreased 18% compared with the third quarter of the same period.

Cost of Sales
Cost of sales decreased to Ps. 8,099 million in the fourth quarter of 2018 compared to Ps. 8,420 million for the third quarter of 2018. With respect to sales, in the fourth quarter of 2018, the cost of sales represented 92% in the fourth quarter of 2018, compared to 85% in the third quarter of the same period. The average cost of sales by ton decreased 11% in the fourth quarter of 2018 versus the third quarter of 2018.

Gross Profit
Gross profit of the Company for the fourth quarter of 2018 decreased 51% to Ps. 699 million compared to Ps. 1,438 million in the third quarter of 2018. The gross profit as a percentage of net sales for the third and fourth quarter of 2018 was of 15% and 8% respectively.

Operating Expenses
Selling, general and administrative expenses decreased 3% to Ps. 259 million in the fourth quarter of 2018 compared to Ps. 267 million for the third quarter of 2018. Selling, general and administrative expenses as a percentage of net sales represented 3% for both periods.

Other Expenses (Income) net
The company recorded other net expenses of Ps. 5 million in the fourth quarter of 2018 compared to other net income of Ps. 0 million for the third quarter of 2018.

Operating (Loss) Income
Operating income was of Ps. 435 million in the fourth quarter of 2018 compared to an operating income of Ps. 1,171 million in the third quarter of 2018. The operating income as a percentage of net sales represented 5% and 12% for the third quarter and fourth quarter periods respectively.

EBITDA
The EBITDA was of Ps. 1,449 million in the third quarter of 2018 as a result a net income of Ps. 1,391, plus minority stake of Ps. 51, plus income taxes of Ps. 107, less comprehensive financial cost of Ps. 378, plus depreciation of Ps. 278 compared to Ps. 743 million for the fourth quarter of 2018, as a result a net income of Ps. 330, less minority stake of Ps. 236, plus income taxes of Ps. 424, less comprehensive financial cost of Ps.83, plus depreciation of Ps. 308.

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter for 2018 was a net income of Ps. 83 million compared with a net income of Ps. 378 million for the third quarter of 2018. The net interest income in the fourth quarter was Ps. 103 million compared with a net income of Ps. 4 million in the third quarter of 2018. At same time we registered an exchange net gain of Ps. 374 million in the third quarter of 2018 compared with an exchange net loss of Ps. 20 million in the fourth quarter of 2018.

Income Taxes
Income Taxes for the third quarter of 2018 had an expense net tax of Ps. 107 million (including an expense tax deferred for Ps. 123 million) compared to an expense of Ps. 424 million for the fourth quarter of 2018, (including an income tax deferred of Ps. 117 million).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, the Company had a net income of Ps. 330 million in the fourth quarter of 2018 compared to Ps. 1,391 million of net income in the third quarter of 2018.

Comparative fourth quarter 2018 vs fourth quarter 2017

Net Sales
Net sales increased 29% from Ps. 6,808 million for the fourth quarter of 2017 to Ps. 8,798 million for the fourth quarter of 2018. Sales in tons of finished steel in the fourth quarter of 2017 were 474 thousand tons versus to 585 thousand tons in the fourth quarter of 2018. Total sales outside of Mexico increased 50% from Ps. 2,959 million for the fourth quarter of 2017 to Ps. 4,426 million in the fourth quarter of 2018. Sales in Mexico increased 14% from Ps. 3,849 million in the fourth quarter of 2017 to Ps. 4,372 million in the fourth quarter of 2018. The average sales prices of finished products sold in the fourth quarter of 2018 increased 5%, compared to the same period of 2017.

Cost of Sales
Cost of sales increased 39% from Ps. 5,840 million in the fourth quarter of 2017 compared to Ps. 8,099 million for the fourth quarter of 2018. With respect to sales, the cost of sales represented 92% during the fourth quarter of 2018 and 86% during the fourth quarter of 2017. The average cost of steel products increased 12% in the fourth quarter of 2018 versus the fourth quarter of 2017.

Gross Profit
Gross profit for the fourth quarter of 2018 decreased 28% from Ps. 968 million in the fourth quarter of 2017 compared to Ps. 699 million in the fourth quarter of 2018. The gross profit as a percentage of net sales represented 14% for the fourth quarter of 2017 compared to 8% of the fourth quarter of 2018.

Operating Expenses
Selling, general and administrative expenses decreased 5% from Ps. 274 million in the fourth quarter of 2017 compared to Ps. 259 million for the fourth quarter of 2018. Selling, general and administrative expenses as a percentage of net sales represented 4% for the fourth quarter of 2017 and 3% for the fourth quarter of 2018.

Other Expenses (Income) net
The company recorded other income net of Ps. 15 million in the fourth quarter of 2017 compared with other income net of Ps. 5 million for the fourth quarter of 2018.

Operating (Loss) Income
Operating income was of Ps. 435 million in the fourth quarter of 2018 compared to an operating income of Ps. 709 million in the fourth quarter of 2017. The operating income as a percentage of net sales in the fourth quarter of 2018 was 5%, compared to an operating income of 10% in the fourth quarter of 2017.

EBITDA
The EBITDA was of Ps. 1,084 million in the fourth quarter of 2017 as a result a net loss of Ps. 310, less minority stake of Ps. 151, plus income taxes of Ps. 1,123, plus comprehensive financial cost of Ps. 47, plus depreciation of Ps. 375 compared to a profit of Ps 743 million in the fourth quarter of 2018 as a result a net income of Ps. 330, less minority stake of Ps. 236, plus income taxes of Ps. 424, less comprehensive financial cost of Ps. 83, plus depreciation of Ps. 308.

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter of 2018 was a net income of Ps. 83 million compared with a net expense of Ps 47 million in the fourth quarter of 2017. Net interest income was of Ps. 103 million in the fourth quarter of 2018 compared with a net interest expense of Ps. 4 million in the fourth quarter of 2017. At same time we registered a net exchange loss of Ps. 20 million in the fourth quarter of 2018 compared with an exchange loss of Ps. 43 million in the fourth quarter of 2017.

Income Taxes
The Company recorded an expense net taxes for the fourth quarter of 2018 of Ps. 424 million (including an expense of deferred tax of Ps. 117 million), compared to an expense taxes of Ps. 1,123 million for the fourth quarter of 2017, (including an income tax deferred of Ps. 1,252 million).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, the Company recorded a net income of Ps. 330 million in the fourth quarter of 2018 compared to Ps. 310 million of net loss in the fourth quarter of 2017.

 

(million of pesos) Jan - Dec '18 Jan - Dec '17 Year 18 vs  '17
Sales 35,678 28,700 24%
Cost of Sales 30,563 23,994 27%
Gross Profit 5,115 4,706 9%
Selling, General and Administrative Expense 1,080 1,239 (13%)
Other Income (Expenses), net 15 7 114%
Operating Profit 4,050 3,474 17%
EBITDA 5,162 4,940 4%
Net income  3,516 1,722 104%
Sales Outside Mexico 15,958 12,669 26%
Sales in Mexico 19,720 16,031 23%
Total Sales (Tons) 2,191 2,091 5%
Cost by ton 13,949 11,475 22%

 

(million of pesos) Jan - Dec '18 Jan - Dec '17 Year 18 vs  '17 Quarter
Sales 35,678 28,700 24% (million of pesos) 4Q'18 3Q '18 4Q '17 4Q´18 vs 3Q´18 4Q´18 vs 4Q '17
Cost of Sales 30,563 23,994 27% Sales 8,798 9,858 6,808 (11%) 29%
Gross Profit 5,115 4,706 9% Cost of Sales 8,099 8,420 5,840 (4%) 39%
Selling, General and Administrative Expense 1,080 1,239 (13%) Gross Profit 699 1,438 968 (51%) (28%)
Other Income (Expenses), net 15 7 114% Selling, General and Adm. Expenses 259 267 274 (3%) (-5%)
Operating Profit 4,050 3,474 17% Other Income (Expenses), net -5 0 15 100% (-133%)
EBITDA 5,162 4,940 4% Operating Profit 435 1,171 709 (63%) (39%)
Net income  3,516 1,722 104% EBITDA 743 1,449 1,084 (49%) (31%)
Sales Outside Mexico 15,958 12,669 26% Net Income 330 1,391 -310 (76%) (206%)
Sales in Mexico 19,720 16,031 23% Sales Outside Mexico 4,426 4,544 2,959 (3%) 50%
Total Sales (Tons) 2,191 2,091 5% Sales in Mexico 4,372 5,314 3,849 (18%) 14%
Cost by ton 13,949 11,475 22% Total Sales (Tons) 585 538 474 9% 23%
Cost per Ton 13,844 15,651 12,321 (12%) 12%

 

(million of pesos) Jan - Dec '18 Jan - Dec '17 Year 18 vs  '17 Quarter Product Thousands of Tons Jan-Dec 2018 Million of PesosJan-Dec 2018 Average Priceper Ton Jan-Dec 2018 Thousands ofTons Jan – Dec 2017 Million of Pesos Jan- Dec 2017 Average Priceper Ton  Jan-Dec 2017
Sales 35,678 28,700 24% (million of pesos) 4Q'18 3Q '18 4Q '17 4Q´18 vs 3Q´18 4Q´18 vs 4Q '17 Special Profiles 956 18,609 19,465 822 14,590 17,749
Cost of Sales 30,563 23,994 27% Sales 8,798 9,858 6,808 (11%) 29% Commercial Profiles 1,235 17,069 13,821 1,269 14,110 11,119
Gross Profit 5,115 4,706 9% Cost of Sales 8,099 8,420 5,840 (4%) 39% Total Tons 2,191 35,678 16,284 2,091 28,700 13,725
Selling, General and Administrative Expense 1,080 1,239 (13%) Gross Profit 699 1,438 968 (51%) (28%)
Other Income (Expenses), net 15 7 114% Selling, General and Adm. Expenses 259 267 274 (3%) (-5%)
Operating Profit 4,050 3,474 17% Other Income (Expenses), net -5 0 15 100% (-133%)
EBITDA 5,162 4,940 4% Operating Profit 435 1,171 709 (63%) (39%)
Net income  3,516 1,722 104% EBITDA 743 1,449 1,084 (49%) (31%)
Sales Outside Mexico 15,958 12,669 26% Net Income 330 1,391 -310 (76%) (206%)
Sales in Mexico 19,720 16,031 23% Sales Outside Mexico 4,426 4,544 2,959 (3%) 50%
Total Sales (Tons) 2,191 2,091 5% Sales in Mexico 4,372 5,314 3,849 (18%) 14%
Cost by ton 13,949 11,475 22% Total Sales (Tons) 585 538 474 9% 23%
Cost per Ton 13,844 15,651 12,321 (12%) 12%

 

(million of pesos) Jan - Dec '18 Jan - Dec '17 Year 18 vs  '17 Quarter Product Thousands of Tons Jan-Dec 2018 Million of PesosJan-Dec 2018 Average Priceper Ton Jan-Dec 2018 Thousands ofTons Jan – Dec 2017 Million of Pesos Jan- Dec 2017 Average Priceper Ton  Jan-Dec 2017 Product Thousandsof Tons Oct-Dec 2018 Million of PesosOct-Dec 2018 AveragePrice per Ton Oct-Dec 2018 Thousandsof Tons Jul-Sep 2018 Million of PesosJul-Sep 2018 AveragePrice per Ton Jul-Sep 2018 Thousands of TonsOct-Dec 2017 Million ofPesosOct-Dec 2017 Average Price per Ton Oct-Dec 2017
Sales 35,678 28,700 24% (million of pesos) 4Q'18 3Q '18 4Q '17 4Q´18 vs 3Q´18 4Q´18 vs 4Q '17 Special Profiles 956 18,609 19,465 822 14,590 17,749 Special Profiles 287 5,492 19,136 201 4,077 20,283 172 3,189 18,540
Cost of Sales 30,563 23,994 27% Sales 8,798 9,858 6,808 (11%) 29% Commercial Profiles 1,235 17,069 13,821 1,269 14,110 11,119 Commercial Profiles 298 3,306 11,094 337 5,781 17,154 302 3,619 11,983
Gross Profit 5,115 4,706 9% Cost of Sales 8,099 8,420 5,840 (4%) 39% Total Tons 2,191 35,678 16,284 2,091 28,700 13,725 Total Tons 585 8,798 15,039 538 9,858 18,323 474 6,808 14,362
Selling, General and Administrative Expense 1,080 1,239 (13%) Gross Profit 699 1,438 968 (51%) (28%)
Other Income (Expenses), net 15 7 114% Selling, General and Adm. Expenses 259 267 274 (3%) (-5%)
Operating Profit 4,050 3,474 17% Other Income (Expenses), net -5 0 15 100% (-133%)
EBITDA 5,162 4,940 4% Operating Profit 435 1,171 709 (63%) (39%)
Net income  3,516 1,722 104% EBITDA 743 1,449 1,084 (49%) (31%)
Sales Outside Mexico 15,958 12,669 26% Net Income 330 1,391 -310 (76%) (206%)
Sales in Mexico 19,720 16,031 23% Sales Outside Mexico 4,426 4,544 2,959 (3%) 50%
Total Sales (Tons) 2,191 2,091 5% Sales in Mexico 4,372 5,314 3,849 (18%) 14%
Cost by ton 13,949 11,475 22% Total Sales (Tons) 585 538 474 9% 23%
Cost per Ton 13,844 15,651 12,321 (12%) 12%

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.

 

(million of pesos) Jan - Dec '18 Jan - Dec '17 Year 18 vs  '17 Quarter Product Thousands of Tons Jan-Dec 2018 Million of PesosJan-Dec 2018 Average Priceper Ton Jan-Dec 2018 Thousands ofTons Jan – Dec 2017 Million of Pesos Jan- Dec 2017 Average Priceper Ton  Jan-Dec 2017 Product Thousandsof Tons Oct-Dec 2018 Million of PesosOct-Dec 2018 AveragePrice per Ton Oct-Dec 2018 Thousandsof Tons Jul-Sep 2018 Million of PesosJul-Sep 2018 AveragePrice per Ton Jul-Sep 2018 Thousands of TonsOct-Dec 2017 Million ofPesosOct-Dec 2017 Average Price per Ton Oct-Dec 2017
Sales 35,678 28,700 24% (million of pesos) 4Q'18 3Q '18 4Q '17 4Q´18 vs 3Q´18 4Q´18 vs 4Q '17 Special Profiles 956 18,609 19,465 822 14,590 17,749 Special Profiles 287 5,492 19,136 201 4,077 20,283 172 3,189 18,540 Contact: Sergio Vigil González Mario Moreno Cortez
Cost of Sales 30,563 23,994 27% Sales 8,798 9,858 6,808 (11%) 29% Commercial Profiles 1,235 17,069 13,821 1,269 14,110 11,119 Commercial Profiles 298 3,306 11,094 337 5,781 17,154 302 3,619 11,983 Grupo Simec, S.A.B. de C.V. Calzada Lázaro Cárdenas 601 44440 Guadalajara, Jalisco, México 52 55 1165 1025 52 33 3770 6734
Gross Profit 5,115 4,706 9% Cost of Sales 8,099 8,420 5,840 (4%) 39% Total Tons 2,191 35,678 16,284 2,091 28,700 13,725 Total Tons 585 8,798 15,039 538 9,858 18,323 474 6,808 14,362
Selling, General and Administrative Expense 1,080 1,239 (13%) Gross Profit 699 1,438 968 (51%) (28%)
Other Income (Expenses), net 15 7 114% Selling, General and Adm. Expenses 259 267 274 (3%) (-5%)
Operating Profit 4,050 3,474 17% Other Income (Expenses), net -5 0 15 100% (-133%)
EBITDA 5,162 4,940 4% Operating Profit 435 1,171 709 (63%) (39%)
Net income  3,516 1,722 104% EBITDA 743 1,449 1,084 (49%) (31%)
Sales Outside Mexico 15,958 12,669 26% Net Income 330 1,391 -310 (76%) (206%)
Sales in Mexico 19,720 16,031 23% Sales Outside Mexico 4,426 4,544 2,959 (3%) 50%
Total Sales (Tons) 2,191 2,091 5% Sales in Mexico 4,372 5,314 3,849 (18%) 14%
Cost by ton 13,949 11,475 22% Total Sales (Tons) 585 538 474 9% 23%
Cost per Ton 13,844 15,651 12,321 (12%) 12%

 

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SOURCE Grupo Simec, S.A.B. de C.V.

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