Grupo Simec Announces Results of Operations for the Twelve-Month Period Ended December 31, 2020 Audited

GUADALAJARA, Mexico, May 3, 2021 /PRNewswire/ — Grupo Simec, S.A.B. de C.V. (NYSE: SIM) («Simec») announced today its results of operations…

GUADALAJARA, Mexico, May 3, 2021 /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, 2020 audited and December 31, 2019 audited.

Twelve-Month Period Ended December 31, 2020 audited compared to Twelve-Month Period Ended December 31, 2019 audited

Net Sales

Net sales increased 5% by the combination of higher shipments of finished steel products and a higher average sales price by 1% compared the same period of 2019, the sales increased from Ps. 34,171 million in the twelve-month period ended December 31, 2019 to Ps. 35,869 million in the same period of 2020. Shipments of finished steel products increased 4% to 2 million 441 thousand tons in the twelve-month period ended December 31, 2020 compared to 2 million 349 thousand tons in the same period of 2019. Total sales outside of Mexico on the twelve-month period ended December 31, 2020 increased 6% to Ps. 17,746 million compared with Ps. 16,736 million in the same period of 2019. Total sales in Mexico increased 4% from Ps. 17,435 million in the twelve-month period ended December 31, 2019 to Ps. 18,123 million in the same period of 2020. The increase of 5% in sales is due to a higher average sales price and higher volume of shipments.

Cost of Sales

Cost of sales decreased 3% from Ps. 30,067 million in the twelve-month period ended December 31, 2019 to Ps. 29,212 million in the same period of 2020. Cost of sales as a percentage of net sales represented, 81% for 2020 and 2019 88%. The average cost of finished steel produced in the twelve-month period ended December 31, 2020 compared to the same period of 2019 decreased 7% 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, 2020 was of Ps. 6,658 million compared to Ps. 4,104 million in the same period of 2019. Gross profit as a percentage of net sales represented 19% and 12% for the 2020 and 2019 periods respectively.

Operating Expenses

Selling, general and administrative expenses increased 23% from Ps. 1,637 million in the twelve-month period ended December 31, 2019 to Ps. 2,019 million in the same period of 2020. Selling, general and administrative expenses as a percentage of net sales represented 5% during the twelve-month period ended December 31, 2019 and 6% in the same period of 2020.

Other Expenses (Income) net

The company recorded other net expenses of Ps. 137 million in the twelve-month period ended December 31, 2019 compared to other net income of Ps. 547 million in the same period of 2020.

Operating Income

Operating income increased 123% from Ps. 2,330 million for the twelve-month period ended December 31, 2019 to Ps. 5,185 million in the same period of 2020. Operating income as a percentage of net sales represented 14% and 7% for the 2020 and 2019 periods respectively.

EBITDA

The EBITDA of the Company increased 93% from Ps. 3,439 million in the twelve-month prior ended December 31, of 2019, generating a net loss of Ps. 1,636, less minority stake of Ps. 3, plus income taxes of Ps. 3,276, plus comprehensive financial cost of Ps. 694, plus depreciation of Ps. 1,108 to Ps. 6,637 million in the same period of 2020 as a result a net income of Ps. 2,957, plus income taxes of Ps. 1,919, plus comprehensive financial cost of Ps. 309, plus depreciation of 1,452.

Consolidated



Million


Twelve-month peri4od ended December 31,



2020



2019

Net income (loss) attributable to Vale’s stockholders



2,957




(1,636)

Loss attributable to noncontrolling interests



0




(4)

Net income (loss)



4,178




(1,640)

Depreciation, depletion and amortization



1,452




1,109

Income taxes



1,919




3,276

Financial results income (loss)



309




694

EBITDA



6,729




3,439









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 (i)



0




0

Impairment and disposal of non-current assets



0




0

Adjusted EBITDA



6,637




3,439

Comprehensive Financial Cost 

Comprehensive financial cost in the twelve-month period ended December 31, 2020 represented a net expense of Ps. 309 million compared with a net expense of Ps. 694 million in the same period of 2019. The net interest was an income of Ps. 54 million in 2020 compared with a net income of Ps. 91 million in the twelve-month period ended December 31, 2019. As a result, we registered a net exchange loss of Ps. 363 million in the twelve-month period ended December 31, 2020 compared with a net exchange loss of Ps. 785 million in the same period of 2019, reflecting a 5.63% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2020 compared to December 31, 2019.

Income Taxes

The Company have recorded an expense net tax of Ps. 1,919 million in the twelve-month period ended December 31, 2020 (including the income of deferred tax of Ps. 81 million) compared with a net expense tax of Ps. 3,276 million in the same period of 2019 (including the tax deferred expense of Ps. 202 million).

Net Income (loss) (After Minority Interest)

As a result of the foregoing, net income increased by 281% from Ps. 1,636 million net loss in the twelve-month period ended December 31, 2019 to Ps. 2,957 million a result net income in the same period of 2020. 

Liquidity and Capital Resources

As of December 31, 2020, 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, 2020 was U.S. $640,393 or Ps. 12.8 million).  As of December 31, 2019, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes («MTN’s») due 1998, Ps. 5.7 million (accrued interest on December 31, 2019 was U.S. $676,758, or Ps. 12.8 million).

Comparative fourth quarter 2020 vs third quarter 2020

Net Sales 

Net sales increased from Ps. 9,643 million in the third quarter of 2020 to Ps. 10,130 million for the fourth quarter of 2020. Sales in tons decreased from 676 thousand ton in the third quarter of 2020 to 602 thousand ton in the fourth quarter of the same period, a decrease of 11%. Total sales outside of Mexico for the fourth quarter of 2020 decreased 1% from Ps. 4,824 million in the third quarter to Ps. 4,753 million in the four quarter of 2020. Sales in Mexico increased to Ps. 5,377 million in the fourth quarter of 2020 compared Ps. 4,819 million in the third quarter of 2020 and increase of 12%. Prices of finished products sold in the fourth quarter of 2020 increased 18% compared with the third quarter of the same period.

Cost of Sales

Cost of sales increased to Ps. 8,356 million in the fourth quarter of 2020 compared to Ps. 7,682 million for the third quarter of 2020. With respect to sales, in the fourth quarter of 2020, the cost of sales represented 82% in the fourth quarter of 2020, compared to 80% in the third quarter of the same period. The average cost of sales by ton increased 22% in the fourth quarter of 2020 versus the third quarter of 2020.

Gross Profit

Gross profit of the Company for the fourth quarter of 2020 decreased 10% to Ps. 1,774 million compared to Ps. 1,961 million in the third quarter of 2020. The gross profit as a percentage of net sales for the third and fourth quarter of 2020 was of 20% and 18% respectively.

Operating Expenses

Selling, general and administrative expenses increased 57% to Ps. 703 million in the fourth quarter of 2020 compared to Ps. 449 million for the third quarter of 2020. Selling, general and administrative expenses as a percentage of net sales for the third and fourth quarter of 2020 was of 7% and 5% respectively.

Other Expenses (Income) net

The company recorded other net income of Ps. 331 million in the fourth quarter of 2020 compared to other net income of Ps. 56 million for the third quarter of 2020.

Operating (Loss) Income

Operating income was of Ps. 1,401 million in the fourth quarter of 2020 compared to an operating income of Ps. 1,568 million in the third quarter of 2020. The operating income as a percentage of net sales represented 14% and 16% for the third quarter and fourth quarter periods respectively.

EBITDA

The EBITDA was Ps. 1,891 million in the third quarter of 2020 as a result a net income of Ps. 1,003, less minority stake of Ps. 1 million, plus income taxes of Ps. 352, plus comprehensive financial cost of Ps. 214, plus depreciation of Ps. 323 compared to Ps. 1,895 million for the fourth quarter of 2020, as a result a net loss of Ps. 498, less minority stake of Ps. 4 million, plus income taxes of Ps. 615, plus comprehensive financial cost of Ps. 1,288, plus depreciation of Ps. 494.

 

Consolidated 



Million


Comparative fourth quarter vs third quarter 2020



4Q 2020



3Q 2020

Net income (loss) attributable to Vale’s stockholders



(498)




1,003

Loss attributable to noncontrolling interests



(4)




(1)

Net income (loss)



(502)




1,002

Depreciation, depletion and amortization



494




323

Income taxes



615




352

Financial results income (loss)



1,288




214

EBITDA



1,987




1,891









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 (i)



0




0

Impairment and disposal of non-current assets



0




0

Adjusted EBITDA



1,895




1,891

Comprehensive Financial Income (Cost)

Comprehensive financial cost for the fourth quarter for 2020 was a net expense of Ps. 1,288 million compared with a net expense of Ps. 214 million for the third quarter of 2020. The net interest income the fourth quarter was Ps. 15 million compared with a net expense of Ps. 6 million in the third quarter of 2020. At same time we registered an exchange net loss of Ps. 208 million in the third quarter of 2020 compared with an exchange net loss of Ps. 1,303 million in the fourth quarter of 2020.

Income Taxes

Income Taxes for the third quarter of 2020 had an expense net tax of Ps. 352 million (including an expenses tax deferred for Ps. 18 million) compared to an expense of Ps. 615 million for the fourth quarter of 2020, (including an income tax deferred of Ps. 66 million).

Net Income (loss)

As a result of the foregoing, the Company recorded a net loss of Ps. 498 million in the fourth quarter of 2020 compared to Ps. 1,003 million of net income in the third quarter of 2020.

Comparative fourth quarter 2020 vs fourth quarter 2019

Net Sales

Net sales increased 38% from Ps. 7,315 million for the fourth quarter of 2019 to Ps. 10,130 million for the fourth quarter of 2020. Sales in tons of finished steel in the fourth quarter of 2019 were 570 thousand tons versus to 602 thousand tons in the fourth quarter of 2020. Total sales outside of Mexico increased 36% from Ps. 3,497 million for the fourth quarter of 2019 to Ps. 4,753 million in the fourth quarter of 2020. Sales in Mexico increased 41% from Ps. 3,818 million in the fourth quarter of 2019 to Ps. 5,377 million in the fourth quarter of 2020. The average sales prices of finished products sold in the fourth quarter of 2020 increased 31%, compared to the same period of 2019.

Cost of Sales

Cost of sales increased 22% from Ps. 6,835 million in the fourth quarter of 2019 compared to Ps. 8,356 million for the fourth quarter of 2020. With respect to sales, the cost of sales represented 82% during the fourth quarter of 2020 and 93% during the fourth quarter of 2019. The average cost of steel products increased 16% in the fourth quarter of 2020 versus the fourth quarter of 2019.

Gross Profit

Gross profit for the fourth quarter of 2020 increased 270% from Ps. 480 million in the fourth quarter of 2019 compared to Ps. 1,774 million in the fourth quarter of 2020. The gross profit as a percentage of net sales represented 7% for the fourth quarter of 2019 compared to 18% of the fourth quarter of 2020.

Operating Expenses

Selling, general and administrative expenses increased 33% from Ps. 530 million in the fourth quarter of 2019 compared to Ps. 703 million for the fourth quarter of 2020. Selling, general and administrative expenses as a percentage of net sales represented 7% for the fourth quarter of 2019 and 7% for the fourth quarter of 2020.

Other Expenses (Income) net

The company recorded other expenses net of Ps. 298 million in the fourth quarter of 2019 compared with other income net of Ps. 331 million for the fourth quarter of 2020.

Operating (Loss) Income

Operating income was of Ps. 1,401 million in the fourth quarter of 2020 compared to an operating loss of Ps. 348 million in the fourth quarter of 2019. The operating income as a percentage of net sales in the fourth quarter of 2020 was 14%, compared to an operating loss of -5% in the fourth quarter of 2019.

EBITDA

The EBITDA was Ps. -42 million in the fourth quarter of 2019 as a result a net loss of Ps. 3,229, plus minority stake of Ps. 124, plus income taxes of Ps. 2,970, less comprehensive financial cost of Ps. 213, plus depreciation of Ps. 306 compared to a profit of Ps 1,895 million in the fourth quarter of 2020 as a result a net loss of Ps. 498, less minority stake of Ps. 4 million, plus income taxes of Ps. 615, plus comprehensive financial cost of Ps. 1,288, plus depreciation of Ps. 494.

Consolidated 



Million


Comparative fourth quarter vs fourth quarter



2020



2019

Net income (loss) attributable to Vale’s stockholders



(498)




(3,229)

Loss attributable to noncontrolling interests



(4)




124

Net income (loss)



(502)




(3,105)

Depreciation, depletion and amortization



494




306

Income taxes



615




2,970

Financial results income (loss)



1.288




(213)

EBITDA



1,987




(42)









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 (i)



0




0

Impairment and disposal of non-current assets



0




0

Adjusted EBITDA



1,895




(42)

Comprehensive Financial Income (Cost)

Comprehensive financial cost for the fourth quarter of 2020 was a net expense of Ps. 1,288 million compared with a net income of Ps 213 million in the fourth quarter of 2019. Net interest income was of Ps. 15 million in the fourth quarter of 2020 compared with a net interest expense of Ps. 40 million in the fourth quarter of 2019. At same time we registered a net exchange loss of Ps. 1,303 million in the fourth quarter of 2020 compared with an exchange income of Ps. 253 million in the fourth quarter of 2019.

Income Taxes

The Company recorded an expense net taxes for the fourth quarter of 2020 of Ps. 615 million (including an expense of deferred tax of Ps. 66 million), compared to an expense taxes of Ps. 2,970 million for the fourth quarter of 2019, (including an income tax deferred of Ps. 128 million).

Net Income (loss)

As a result of the foregoing, the Company recorded a net loss of Ps. 498 million in the fourth quarter of 2020 compared to Ps. 3,229 million of net loss in the fourth quarter of 2019.

(million of pesos)

Jan – Dec ’20


Jan – Dec ’19


Year 20 vs

 ’19

Sales

35,869


34,171


5%

Cost of Sales

29,212


30,067


(3%)

Gross Profit

6,658


4,104


62%

Selling, General and Administrative Expense

2,019


1,637


23%

Other Income (Expenses), net

547


(137)


500%

Operating Profit

5,185


2,330


123%

EBITDA

6,637


3,439


93%

Net income 

2,957


(1,636)


281%

Sales Outside Mexico

17,746


16,736


6%

Sales in Mexico

18,123


17,435


4%

Total Sales (Tons)

2,441


2,349


4%

Cost by ton

11,967


12,800


(7%)

 

Quarter






(million of pesos)

4Q’20

3Q ’20

4Q ’19

4Q´20vs

3Q´20

4Q´20 vs

4Q ’19

Sales

10,130

9,643

7,315

5%

38%

Cost of Sales

8,356

7,682

6,835

9%

22%

Gross Profit

1,774

1,961

480

(10%)

270%

Selling, General and Adm. Expenses

703

449

530

57%

33%

Other Income (Expenses), net

331

56

(298)

491%

211%

Operating Profit

1,401

1.568

(348)

(11%)

503%

EBITDA

1,895

1,891

(42)

0%

4613%

Net Income

(498)

1,003

(3,229)

(150%)

(85%)

Sales Outside Mexico

4,753

4,824

3,497

(1%)

36%

Sales in Mexico

5,377

4,819

3,818

12%

41%

Total Sales (Tons)

602

676

570

(11%)

6%

Cost per Ton

13,881

11,364

11,991

22%

16%

 

Product

Thousands of Tons

Jan-Dec 2020

Millions of Pesos

Jan-Dec 2020

Average Price per Ton

Jan-Dec 2020

Thousands of Tons

Jan – Dec 2019

Millions of Pesos  

   Jan- Dec 2019

Average Price per Ton

 Jan-Dec2019

Special Profiles

791

13,593

17,185

851

15,384

18,078

Commercial Profiles

1,650

22,276

13,501

1,498

18,787

12,541

Total Tons

2,441

35,869

14,694

2,349

34,171

14,547

 

Product

Thousands of Tons

Oct-Dec 2020

Millions of Pesos

Oct-Dec 2020

Average Price per Ton

Oct-Dec 2020

Thousands of Tons

Jul-Sep 2020

Millions of Pesos

 Jul-Sep 2020

Average Price per Ton

Jul-Sep 2020

Thousands of Tons

Oct-Dec 2019

Millions of Pesos

Oct-Dec 2019

Average Price per Ton

Oct-Dec 2019

Special Profiles

220

3,898

17,718

215

3,551

16,516

191

3,042

15,927

Commercial Profiles

382

6,232

16,314

461

6,092

13,215

379

4,273

11,274

Total Tons

602

10,130

16,827

676

9,643

14,265

570

7,315

12,833

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

Jose 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.