Comparative first quarter of 2015 vs. first quarter of 2014

Net Sales
The net sales of the company increased 5% derived from the increase in shipments of steel. Sales increased from Ps. 6,582 million in the first quarter of 2014 to Ps. 6,897 million in the same period of 2015. Shipments of steel finished goods increased 8% from 530 thousand tons in the first quarter of 2014 compared to 573 thousand tons in the same period of 2015. Total sales outside of Mexico in the first quarter of 2015 decreased 1% to reach Ps. 3,146 million compared to Ps. 3,175 million in the same period of 2014. The Mexican sales increased 10% from Ps. 3,407 million in the first quarter of 2014 to Ps. 3,751 million in the same period of 2015. The increase in sales can be explained due to a greater volume shipped compared with the same period of 2014. The average sales price per ton of steel finished goods decrease 3% in the first quarter of 2015 compared with the same period of 2014.

Cost of Sales
The cost of sales decreased 1% from Ps. 6,057 million in the first quarter of 2014 to Ps. 6,022 million in the same period of 2015. In the first quarter of 2015 the cost of sales represents the 87% of the net sales compared to 92% in the same period of 2014. The average cost of sales per ton of steel finished goods decreased 8% in the first quarter of 2015 compared to the same period of 2014.

Gross Profit
The gross profit of the company for the same period increased 67% from Ps. 525 million in 2014 to Ps. 875 million in the same period of 2015. Gross profit as a percentage of net sales in the first quarter of 2015 was 13% and for the same period of 2014 was 8%. The increase in gross profit is due to an increase in sales volume shipped and higher production with better cost of the raw materials in the first quarter of 2015 compared with the same period of 2014.

General, Sales and administrative Expenses
General, selling and administrative expenses were maintained in both periods, from Ps. 274 million in the first quarter of 2014 compared to Ps. 273 million in the same period of 2015, and representing 4% of net sales in both periods.

Other Expenses (Income) net
The company recorded other income net of Ps. 3 million in the first quarter of 2015 compared to other income net of Ps. 3 million in the same period of 2014.

Operating Income
The operating income increased 138% from Ps. 254 million for the first quarter of 2014 compared to Ps. 605 million in the same period of 2015. Operating income as a percentage of net sales was 9% in the first quarter of 2015 compared to 4% in the same period of 2014. The increase in operating income is due to an increase in sales volume shipped and a better cost of sales in the first quarter of 2015 compared with the same period of 2014.

EBITDA
The EBITDA of the company for the first quarter of 2015, show an increase of 75%, by the above mentioned to pass from Ps. 501 million in the first quarter of 2014 compared against Ps. 876 million of the first quarter of 2015.
 

Comprehensive Financial Cost 
The Comprehensive financial cost in the first quarter of 2015 represented a net income of Ps. 19 million compared with an expense of Ps.18 million in the same period of 2014. Net interest was an expense of Ps. 4 million in the first quarter of 2015 compared with a net expense of Ps. 4 million in the same period of 2014. At the same time, Simec registered an exchange income of Ps. 23 million in the first quarter of 2015 compared with an exchange loss of Ps. 14 million in the same period of 2014.

Income Taxes
Income Taxes recorded an expense of Ps. 267 million in the first quarter of 2015 (including the income of Ps. 8 million of deferred income taxes) compared to an income of Ps. 1 million in the same period of 2014 (including the benefits of Ps. 23 million of deferred income taxes).

Net Income (loss) (Before Non- controlling Interest)
As a result of the foregoing, net income increased 35% to Ps. 441 million in the first quarter of 2015 from Ps. 327 million in the same period of previous year.

Liquidity and Capital Resources
As of March 31, 2015, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.6 million (accrued interest on March 31, 2015 was U.S. $537,766, or Ps. 8.2 million).  As of March 31, 2014, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 4.0 million (accrued interest on March 31, 2014 was U.S. $536,529 or Ps. 7.2 million).

For the full report, including comparative figures for the first quarter of 2015 vs. fourth quarter of 2014, visit http://www.gsimec.com.mx