Grupo Simec Announces Operational Results for 2012 and 2011
02/28/2013 - Mexico's longs producer Grupo Simec announced its unaudited results of operations for the twelve-month period ended 31 December 2012 and 31 December 2011.
Grupo Simec, S.A.B. de C.V. announced its unaudited results of operations for the twelve-month period ended 31 December 2012 and 31 December 2011.
Twelve-Month Period Ended December 31, 2012 compared to Twelve-Month Period Ended December 31, 2011
Net Sales
Net sales increased 2% by the combination of higher sales of Special Bars "SBQ", shipments of less finished steel products by 1% and the average sales price per ton of 3% compared to the same period of 2011, the sale rose from Ps. 29,270 millions in the twelve-month period ended December 31, 2011 to Ps. 29,773 millions in the same period of 2012. Shipments of finished steel products decrease 1% to 2 million 262 thousand tons in the twelve-month period ended December 31, 2012 compared to 2 million 288 thousand tons in the same period of 2011. Total sales outside of Mexico in the twelve-month period ended December 31, 2012 decreased 8% to Ps. 14,429 million compared with Ps.15,654 millions in the same period of 2011. Total sales in Mexico increased 13% from Ps. 13,616 millions in the twelve-month period ended December 31, 2011 to Ps. 15,344 millions in the same period of 2012. The increase in sales is due to the increase of the average sales price of 3%.
Cost of Sales
Cost of sales increased 2% from Ps. 25,592 millions in the twelve-month period ended December 31, 2011 to Ps. 25,989 millions in the same period of 2012. Cost of sales as a percentage of net sales in the twelve months ended on December 31 of 2012 and 2011, cost of sales represented 87% on both periods. The average cost of finished steel produced in the twelve-month period ended December 31, 2012 compared to the same period of 2011 increased approximately 3% by higher sales of SBQ steel.
Gross Profit
Gross profit of the Company in the twelve-month period ended December 30, 2012 was of Ps. 3,784 million compared to Ps. 3,678 millions in the same period of 2011. Gross profit as a percentage of net sales represented 13% on both periods. The increase in the gross profit is due to a better blend of steel products compared with the same period of 2011.
Operating Expenses
Selling, general and administrative expenses increased 6% from Ps. 1,054 millions in the twelve-month period ended December 31, 2011 to Ps. 1,117 million in the same period of 2012, representing 4% respect of net sales in both periods.
Other Expenses (Income) net
The company recorded other net expenses of Ps. 114 millions in the twelve-month period ended December 31, 2011 compared to other expenses net of Ps. 27 millions in the same period of 2012.
Operating Income
Operating income increased 6% from Ps. 2,510 million for the twelve-month period ended December 31, 2011 to Ps. 2,640 millions in the same period of 2012. Operating income as a percentage of net sales was 9% in both periods. The increase in operating income is due to an increase in sales of SBQ and better average sales price per ton.
EBITDA
The EBITDA of the Company increase 5% from Ps. 3,485 millions in the twelve-month prior ended December 31, of 2011, to Ps. 3,646 millions in the same period of 2012.
Comprehensive Financial Cost
Comprehensive financial cost in the twelve-month period ended December 31, 2012 represented a net expense of Ps. 172 million compared with a net income of Ps. 584 millions in the same period of 2011. The net interest was an income of Ps. 1 million in 2012 compared with a net interest of Ps. 2 millions in the twelve-month period ended December 31, 2011. As a result, we registered a net exchange loss of Ps. 173 millions in the twelve-month period ended December 31, 2012 compared with a net exchange gain of Ps. 582 millions in the same period of 2011, reflecting a 7% increase in the value of the peso versus the dollar in the twelve-month period ended December 31, 2012 compared to December 31, 2011.
Income Taxes
The Company have recorded an expense net income tax of Ps. 71 millions in the twelve-month period ended December 31, 2012 (including the expense of deferred income tax of Ps. 78 millions) compared with an expense net of Ps. 104 millions in the same period of 2011 (including the income tax deferred of Ps. 190 millions).
Net Income (loss) (After Minority Interest)
As a result of the foregoing, net income decreased by 16% from Ps. 2,901 millions in the twelve-month period ended December 31, 2011 to a net income of Ps. 2,424 millions in the same period of 2012.
Liquidity and Capital Resources
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). As of December 31, 2011, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, Ps. 4.2 million (accrued interest on December 31, 2011 was U.S. $472,824, or Ps. 6.6 millions).
Comparative fourth quarter 2012 vs third quarter 2012
Net Sales
Net sales decreased 11% from Ps. 7,153 millions in the third quarter of 2012 to Ps. 6,354 million for the fourth quarter of 2012. Sales in tons decreased from 558 thousand ton in the third quarter of 2012 to 520 thousand ton in the fourth quarter of the same period, a decrease of 7%. Total sales outside of Mexico for the fourth quarter of 2012 decreased 12% from Ps. 3,188 millions in the third quarter to Ps. 2,820 millions in the four quarter of 2012. Sales in Mexico diminish to 3,534 million in the fourth quarter of 2012 compared Ps. 3,965 millions in the third quarter of 2012, an decrease of 11%. Prices of finished products sold in the fourth quarter of 2012 decreased approximately 5% compared to the third quarter of the same period.
Cost of Sales
Cost of sales was of Ps. 6,035 millions in the fourth quarter of 2012 compared to Ps. 6,093 million for the third quarter of 2012. With respect to sales, in the fourth quarter of 2012, the cost of sales represented 95% for the fourth quarter of 2012 while for the third quarter of 2012 was of 85%. The average cost of sales by ton increased 6% in the fourth quarter of 2012 versus the third quarter of 2012.
Gross Profit
Gross profit of the Company for the fourth quarter of 2012 decreased 73% to Ps. 319 million compared to Ps. 1,060 millions in the third quarter of 2012. The gross profit as a percentage of net sales for the fourth quarter was of 5% and 15% for the third quarter of 2012.
Operating Expenses
Selling, general and administrative expenses decrease 4% to Ps. 251 millions in the fourth quarter of 2012 compared to Ps. 261 million for the third quarter of 2012. Selling, general and administrative expenses as a percentage of net sales represented 4% during the fourth and third quarter of 2012.
Other Expenses (Income) net
The company recorded other net expense of Ps. 21 millions in the fourth quarter of 2012 compared to other net income of Ps. 3 million for the third quarter of 2012.
Operating (Loss) Income
Operating income was of Ps. 47 million in the fourth quarter of 2012 compared to an operating income of Ps. 802 millions in the third quarter of 2012. The operating income as a percentage of net sales in the fourth quarter of 2012 represented 1% while for the third quarter of 2012 it represented 11%.
EBITDA
The EBITDA was Ps. 1,033 millions in the third quarter of 2012 compared to Ps. 317 million for the fourth quarter of 2012 due to the above explained.
Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter for 2012 was a net income of Ps. 42 million compared with a net loss of Ps. 187 million for the third quarter of 2012. The net interest income in the third and fourth quarter of 2012 was of Ps. zero. At the same time we registered an exchange net loss of Ps. 187 millions in the third quarter of 2012 compared with an exchange net gain of Ps. 42 millions in the fourth quarter of 2012.
Income Taxes
Income Taxes for the fourth quarter of 2012 had an expense net income tax of Ps. 106 million (including an expense tax deferred for Ps. 113 millions) compared to an expense of Ps. 14 million for the third quarter of 2012, (including an expense tax deferred of Ps. 29 millions).
Net Income (loss) (After Minority Interest)
As a result of the foregoing, the Company had a net income of Ps. 71 millions in the fourth quarter of 2012 compared to Ps. 576 million of net income in the third quarter of 2012.
Comparative fourth quarter 2012 vs fourth quarter 2011
Net Sales
Net sales decreased 19% from Ps. 7,836 million for the fourth quarter of 2011 to Ps. 6,354 million for the fourth quarter of 2012. Sales in tons of finished steel in the fourth quarter of 2011 were 558 thousand tons versus to 520 thousand tons in the fourth quarter of 2012. Total sales outside of Mexico decrease 29% from Ps. 3,958 million for the fourth quarter of 2011 to Ps. 2,820 millions in the fourth quarter of 2012. Sales in Mexico decrease 9% from Ps. 3,878 millions in the fourth quarter of 2011 to Ps. 3,534 millions in the fourth quarter of 2012. The average sales prices of finished products sold in the fourth quarter of 2012 decreased approximately 13% compared to the fourth quarter of 2011.
Cost of Sales
Cost of sales decreased 9% from Ps. 6,657 millions in the fourth quarter of 2011 compared to Ps. 6,035 million for the fourth quarter of 2012. With respect to sales, in the fourth quarter of 2012, the cost of sales represented 95% compared to 85% for the fourth quarter of 2011. The average cost of steel products decreased 3% in the fourth quarter of 2012 versus the fourth quarter of 2011.
Gross Profit
Gross profit for the fourth quarter of 2012 decreased 73% from Ps. 1,179 millions in the fourth quarter of 2011 compared to an income of Ps. 319 millions in the fourth quarter of 2012. The gross profit as a percentage of net sales for the fourth quarter of 2012 was 5% compared with 15% for the fourth quarter of 2011.
Operating Expenses
Selling, general and administrative expenses decreased 30% from Ps. 360 millions in the fourth quarter of 2011 compared to Ps. 251 million for the fourth quarter of 2012. Selling, general and administrative expenses as a percentage of net sales represented 4% during the fourth quarter of 2012 and 5% during the fourth quarter of 2011.
Other Expenses (Income) net
The company recorded other net expense of Ps. 135 millions in the fourth quarter of 2011 compared with other expenses net of Ps. 21 million for the fourth quarter of 2012.
Operating (Loss) Income
Operating income was of Ps. 47 millions in the fourth quarter of 2012 compared with Ps. 684 millions in the fourth quarter of 2011. The operating income as a percentage of net sales in the fourth quarter of 2012 was 1% compared to 8% in the fourth quarter of 2011.
EBITDA
The EBITDA from the fourth quarter of 2012 decreased 62% from Ps 836 million in the fourth quarter of 2011 to Ps 317 million in the fourth quarter of 2012.
Comprehensive Financial Income (Cost)
Comprehensive financial cost for the fourth quarter of 2012 was an income of Ps. 42 million compared with an income of Ps 261 million in the fourth quarter of 2011. Net interest expense was Ps. zero in the fourth quarter of 2012 compared with a net expense of Ps. 5 millions in the fourth quarter of 2011. At the same time we registered a net exchange gain of Ps. 42 millions in the fourth quarter of 2012 compared with an exchange gain of Ps. 265 millions in the fourth quarter of 2011.
Income Taxes
The Company recorded an income taxes for the fourth quarter of 2012 was an expense of Ps. 106 million (including an expense of deferred income tax of Ps 113 millions), compared to a net income of Ps. 338 million for the fourth quarter of 2011, (including an income of deferred income tax of Ps. 153 millions).
Net Income (loss) (After Minority Interest)
As a result of the foregoing, net income of Ps. 71 millions in the fourth quarter of 2012 compared to a income of Ps. 1,324 million of net income in the fourth quarter of 2011.
Mexico's longs producer Grupo Simec has 12 steel production and processing plants and four scrap metal processors in Mexico, as well as eight plants in the U.S. and Canada operating as Republic Steel.
