SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

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Grupo Simec Announces Results Of Operations For The Twelve Month Period Ended December 31, 2013

GUADALAJARA, Mexico, March 20, 2014 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations Audited for the twelve-month period ended December 31, 2013 and December 31, 2012.

Twelve-Month Period Ended December 31, 2013 compared to Twelve-Month Period Ended December 31, 2012

Net Sales
Net sales decreased 17% by the combination of lower shipments of finished steel products by 9% and the average sales price per ton of 10% compared the same period of 2012, the sale rose from Ps. 29,524 millions in the twelve-month period ended December 31, 2012 to Ps. 24,369 millions in the same period of 2013. Shipments of finished steel products decrease 9% to 2 million 064 thousand tons in the twelve-month period ended December 31, 2013 compared to 2 million 262 thousand tons in the same period of 2012. Total sales outside of Mexico in the twelve-month period ended December 31, 2013 decreased 18% to Ps. 11,347 million compared with Ps.13,774 millions  in the same period of 2012. Total sales in Mexico decreased 17% from Ps. 15,750 millions in the twelve-month period ended December 31, 2012 to Ps. 13,022 millions in the same period of 2013.  The decrease in sales is due to the decrease of the average sales price of 10% and lower shipments of finished steel products by 9%.

Cost of Sales
Cost of sales decreased 14% from Ps. 25,960 millions in the twelve-month period ended December 31, 2012 to Ps. 22,410 millions in the same period of 2013. Cost of sales as a percentage of net sales in the twelve months ended on December 31 of 2013 represented 92% and 88% in the same period of 2012. The average cost of finished steel produced in the twelve-month period ended December 31, 2013 compared to the same period of 2012 decreased approximately 5% by lower costs of SBQ steel.

Gross Profit
Gross profit of the Company in the twelve-month period ended December 31, 2013 was of Ps. 1,959 million compared to Ps. 3,564 millions in the same period of 2012. Gross profit as a percentage of net sales represented 8% in the twelve-month period ended December 31, 2013 and 12% in the same period of 2012. The decrease in the gross profit is due to lower shipments of finished steel products in 2013, compared with the same period of 2012.

Operating Expenses
Selling, general and administrative expenses decreased 9% from Ps. 1,228 millions in the twelve-month period ended December 31, 2012 to Ps. 1,117 million in the same period of 2013. Selling, general and administrative expenses as a percentage of net sales represented 4% during the twelve-month period ended December 31, 2012 and 5% in the same period of 2013.

Other Expenses (Income) net
The company recorded other net incomes of Ps. 181 millions in the twelve-month period ended December 31, 2012 compared to other expenses net of Ps. 59 millions in the same period of 2013.

Operating Income
Operating income decreased 69% from Ps. 2,517 million for the twelve-month period ended December 31, 2012 to Ps. 783 millions in the same period of 2013. Operating income as a percentage of net sales was 9% in the twelve-month period ended December 31, 2012, and 3% in the same period of 2013. The decrease in operating income is due to a less average sales price and lower shipments of finished steel products.

EBITDA
The EBITDA of the Company decreased 48% from Ps. 3,529 millions in the twelve-month prior ended December 31, of 2012, to Ps. 1,836 millions in the same period of 2013.

Comprehensive Financial Cost 
Comprehensive financial cost in the twelve-month period ended December 31, 2013 represented a net expense of Ps. 75 million compared with a net expense of Ps. 509 millions in the same period of 2012. The net interest was an expense of Ps 8 million in 2013 compared with a net interest income of Ps. 1 million in the twelve-month period ended December 31, 2012. As a result, we registered a net exchange loss of Ps. 67 millions in the twelve-month period ended December 31, 2013 compared with a net exchange loss of Ps. 510 millions in the same period of 2012, reflecting a 1% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2013 compared to December 31, 2012.

Income Taxes
The Company have recorded a net income tax of Ps. 282 millions in the twelve-month period ended December 31, 2013 (including the income of deferred income tax of Ps. 339 millions) compared with an expense net of Ps. 54 millions in the same period of 2012 (including the expense tax deferred of Ps. 70 millions).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, net income decreased by 27% from Ps. 2,070 millions in the twelve-month period ended December 31, 2012 to a net income of Ps. 1,517 millions in the same period of 2013. 

Liquidity and Capital Resources
As of December 31, 2013, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 3.9 million (accrued interest on December 31, 2013 was U.S. $527,048 or Ps. 6.9 millions).  As of December 31, 2012, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 3.9 million (accrued interest on December 31, 2012 was U.S. $499,837, or Ps. 6.5 millions).

Comparative fourth quarter 2013 vs third quarter 2013

Net Sales
Net sales decreased 11% from Ps. 6,211 millions in the third quarter of 2013 to Ps. 5,532 million for the fourth quarter of 2013. Sales in tons decreased from 527 thousand ton in the third quarter of 2013 to 485 thousand ton in the fourth quarter of the same period a decrease of 8%. Total sales outside of Mexico for the fourth quarter of 2013 decreased 17% from Ps. 2,941 millions in the third quarter to Ps. 2,437 millions in the four quarter of 2013. Sales in Mexico diminish to 3,095 million in the fourth quarter of 2013 compared Ps. 3,270 millions in the third quarter of 2013 an decrease of 5%. Prices of finished products sold in the fourth quarter of 2013 decreased approximately 3% compared to the third quarter of the same period.

Cost of Sales
Cost of sales was of Ps. 5,446 millions in the fourth quarter of 2013 compared to Ps. 5,736 million for the third quarter of 2013. With respect to sales, in the fourth quarter of 2013, the cost of sales represented 98% for the fourth quarter of 2013 while for the third quarter of 2013 was of 92%. The average cost of sales by ton increased 3% in the fourth quarter of 2013 versus the third quarter of 2013.

Gross Profit
Gross profit of the Company for the fourth quarter of 2013 decreased 82% to Ps. 86 million compared to Ps. 475 millions in the third quarter of 2013. The gross profit as a percentage of net sales for the fourth quarter was of 2% and 8% for the third quarter of 2013.

Operating Expenses
Selling, general and administrative expenses decreased 19% to Ps. 233 millions in the fourth quarter of 2013 compared to Ps. 286 million for the third quarter of 2013. Selling, general and administrative expenses as a percentage of net sales represented 4% during the fourth quarter of 2013 and 5% for the third quarter of 2013.

Other Expenses (Income) net
The company recorded other net expenses of Ps. 68 millions in the fourth quarter of 2013 compared to other net expenses of Ps. 1 million for the third quarter of 2013.

Operating (Loss) Income
Operating loss was of Ps 215 million in the fourth quarter of 2013 compared to an operating income of Ps. 188 millions in the third quarter of 2013. The operating income as a percentage of net sales in the fourth quarter of 2013 represented -3% while the operating income for the third quarter of 2013 represented 3%.

EBITDA
The EBITDA was Ps. 472 millions in the third quarter of 2013 compared to Ps. -7 million for the fourth quarter of 2013 due to the above explained.

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter for 2013 was a net income of Ps. 84 million compared with a net income of Ps. 65 million for the third quarter of 2013. The net interest cost in the fourth quarter was Ps 18 million compared to Ps 26 millions in the third quarter of 2013. At the same time we registered an exchange net income of Ps. 91 millions in the third quarter of 2013 compared with an exchange net income of Ps. 66 millions in the fourth quarter of 2013.

Income Taxes
Income Taxes for the fourth quarter of 2013 had an income net income tax of Ps. 35 million (including an income tax deferred for Ps. 198 millions) compared to an income of Ps. 144 million for the third quarter of 2013, (including an income tax deferred of Ps. 60 millions).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, the Company had a net income of Ps. 151 millions in the fourth quarter of 2013 compared to Ps. 509 million of net income in the third quarter of 2013.

Comparative fourth quarter 2013 vs fourth quarter 2012

Net Sales
Net sales decreased 9% from Ps. 6,106 million for the fourth quarter of 2012 to Ps. 5,532 million for the fourth quarter of 2013. Sales in tons of finished steel in the fourth quarter of 2012 were 520 thousand tons versus to 485 thousand tons in the fourth quarter of 2013. Total sales outside of Mexico increase 13% from Ps. 2,166 million for the fourth quarter of 2012 to Ps. 2,437 millions in the fourth quarter of 2013. Sales in Mexico decreased 21% from Ps. 3,940 millions in the fourth quarter of 2012 to Ps. 3,095 millions in the fourth quarter of 2013. The average sales prices of finished products sold in the fourth quarter of 2013 decreased approximately 3% compared to the fourth quarter of 2012.

Cost of Sales
Cost of sales decreased 9% from Ps. 6,007 millions in the fourth quarter of 2012 compared to Ps. 5,446 million for the fourth quarter of 2013. With respect to sales, the cost of sales represented 98% in both periods. The average cost of steel products decreased 3% in the fourth quarter of 2013 versus the fourth quarter of 2012.

Gross Profit
Gross profit for the fourth quarter of 2013 decreased 13% from Ps. 99 millions in the fourth quarter of 2012 compared to an income of Ps. 86 millions in the fourth quarter of 2013. The gross profit as a percentage of net sales was 2% in both periods.

Operating Expenses
Selling, general and administrative expenses decreased 36% from Ps. 362 millions in the fourth quarter of 2012 compared to Ps. 233 million for the fourth quarter of 2013. Selling, general and administrative expenses as a percentage of net sales represented 4% during the fourth quarter of 2013 and 6% during the fourth quarter of 2012.

Other Expenses (Income) net
The company recorded other net income of Ps. 187 millions in the fourth quarter of 2012 compared with other expenses net of Ps. 68 million for the fourth quarter of 2013.

Operating (Loss) Income
Operating loss was of Ps. 215 millions in the fourth quarter of 2013 compared to an operating loss of Ps. 76 millions in the fourth quarter of 2012. The operating income as a percentage of net sales in the fourth quarter of 2013 was -3%, compared to an operating loss of -1% in the fourth quarter of 2012.

EBITDA
The EBITDA from the fourth quarter of 2013 decreased 104% from Ps 200 million in the fourth quarter of 2012 to Ps -7 million in the fourth quarter of 2013.

Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter of 2013 was a net income of Ps. 84 million compared with a loss of Ps 295 million in the fourth quarter of 2012. Net interest expense was of Ps. 18 million in the fourth quarter of 2013 compared with a net effect of zero Ps. in the fourth quarter of 2012. At the same time we registered a net exchange income of Ps. 66 millions in the fourth quarter of 2013 compared with an exchange loss of Ps. 295 millions in the fourth quarter of 2012.

Income Taxes
The Company  recorded an income taxes for the fourth quarter of 2013 was of Ps. 35 million (including an income of deferred income tax of Ps 198 millions),  compared to a net expense of Ps. 89 million for the fourth quarter of 2012, (including an expense of deferred income tax of Ps. 105 millions).

Net Income (loss) (After Minority Interest)
As a result of the foregoing, the Company recorded a net income of Ps. 151 millions in the fourth quarter of 2013 compared to Ps. 283 million of net loss in the fourth quarter of 2012

(millon of pesos)

4Q '13


4Q '12


Year '13 vs
 '12

Sales

24,369


29,524


(17%)

Cost of Sales

22,410


25,960


(14%)

Gross Profit

1,959


3,564


(45%)

Selling, General and Administrative Expense

1,117


 

1,228


(9%)

Other Income (Expenses), net

-59


181


(133%)

Operating Profit

783


2,517


(69%)

EBITDA

1,836


3,529


(48%)

Net income 

1,517


2,070


(27%)

Sales Outside Mexico

11,347


13,774


(18%)

Sales in Mexico

13,022


15,750


(17%)

Total Sales (Tons)

2,064


2,262


(9%)

 

Quarter






(millon of pesos)

4Q'13

3Q '13

4Q '12

4Q'13vs
3Q'13

4Q'13 vs
4Q '12

Sales

5,532

6,211

6,106

(11%)

(9%)

Cost of Sales

5,446

5,736

6,007

(5%)

(9%)

Gross Profit

86

475

99

(82%)

13%

Selling, General and Adm. Expenses

233

286

362

(19%)

(36%)

Other Income (Expenses), net

-68

-1

187

6,700%

(136%)

Operating Profit

-215

188

-76

(214%)

(183%)

EBITDA

-7

472

200

(101%)

(104%)

Net Income

151

509

-283

(70%)

(153%)

Sales Outside Mexico

2,437

2,941

2,166

(17%)

13%

Sales in Mexico

3,095

3,270

3,940

(5%)

(21%)

Total Sales (Tons)

485

527

520

(8%)

(7%)

 

Product

Thousand of Tons

Jan-Dec 2013

Million of Pesos   Jan-Dec 2013

Average Price per Ton

Jan-Dec

2013

Thousand of Tons

Jan – Dec 2012

Million of Pesos    Jan- Dec 2012

Average Price per Ton

 Jan-Dec

2012

Commercial Profiles

889

8,404

9,453

1,057

11,332

10,721

Special Profiles

1,175

15,965

13,587

1,205

18,192

15,097






















Total

2,064

24,369

11,807

2,262

29,524

13,052

 

Product

Thousand of Tons

Oct-Dec 2013

Million of Pesos Oct-Dec 2013

Average Price per Ton

Oct-Dec

2013

Thousand of Tons Jul-Sep

2013

Million of Pesos Jul-Sep

2013

Average Price per Ton

Jul-Sep

2013

Thousand of Tons   Oct-Dec

2012

Million of Pesos Oct-Dec 2012

Average Price per Ton  Oct-Dec

2012

Commercial Profiles

219

1,899

8,671

213

2,014

9,455

 

302

2,850

9,437

Special Profiles

266

3,633

13,657

314

4,197

13,366

 

218

3,256

14,936































Total

485

5,532

11,406

527

6,211

11,785

520

6,106

11,742











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

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

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