Grupo Simec, S.A.B. de C.V. announced its results of operations for the nine-month period ended 30 September 2012.

Comparative first nine months of 2012 vs. first nine months of 2011
Net Sales
Net sales of the company increased 9% from Ps. 21,434 million in the first nine months of 2011 to Ps. 23,418 million in the first nine months of 2012. Shipments of finished steel products increased 1% from 1,731 thousand tons in the first nine months of 2011 to 1,742 thousand tons in the first nine months of 2012. Total sales outside of Mexico in the first nine months of 2012 decreased 1% to Ps. 11,608 million compared to Ps. 11,696 million in the first nine months of 2011. Mexican sales increased 21% from Ps. 9,738 million in the first nine months of 2011 to Ps. 11,810 million in the first nine months of 2012. The increase in sales for the first nine months of 2012 compared to the first nine months of 2011, is due to the combined of better average sales price of 9% and increase in the volume of shipments approximately of 11 thousand tons that represent a 1%.

Cost of Sales
Cost of sales increased 5% from Ps. 18,935 million in the first nine months of 2011, to Ps. 19,954 million in the first nine months of 2012. Cost of sales as a percentage of net sales represented 85% in the first nine months of 2012 while in the first nine months of 2011 represented 88%. Cost of sales increase approximately 5% in the first nine months of 2012 compared to the first nine months of 2011, due to the major volume shipment and increase in certain raw materials.

Gross Profit
Gross profit of the Company for the first nine months of 2012 increased 39% from Ps. 2,499 million in the first nine months of 2011, to Ps. 3,464 million in the first nine months of 2012. Marginal profit as percentage of net sales in the first nine months of 2012 was of 15% while in the first nine months of 2011 was of 12%. The gross profit between both periods is due for better in the average sales price and major volume of shipments between both periods.

Operating Income
Operating income increased 42% from Ps. 1,827 million for the first nine months of 2011 compared to Ps. 2,593 million in the first nine months of 2012. Operating income as percentage of net sales was 11% in the first nine months of 2012 compared to 9% in the same period of 2011. The increase in operating income is due to an increase in revenues and increase in volume of finish good shipments.

EBITDA
The EBITDA of the first nine months of 2012, increase in Ps 679 million or 26% compared to first nine months of 2011, due to a better in the average sales price and to a major volume shipments. The EBITDA passed of Ps. 2,650 million of the first nine months of 2011 to Ps. 3,329 million in the first nine months of 2012.

Net Income
As a result of the foregoing, the company recorded an increase in net income of 49% to pass of Ps. 1,578 million in the first nine months of 2011 to Ps. 2,353 million of the same period of 2012.

Comparative third quarter of 2012 vs. second quarter of 2012
Net Sales
Net sales of the Company decreased 12% in the third quarter of 2012 compared to the second quarter to pass of Ps. 8,150 million during the second quarter of 2012 to Ps. 7,154 million in the third quarter of 2012. Shipments of finished steel products decreased 6% from 596 thousand tons in the second quarter of 2012 to 558 thousand tons in the third quarter of the same year. Total sales outside of Mexico in the third quarter of 2012 decreased 23% to get to Ps. 3,188 million compared to Ps. 4,132 million of the second quarter of the same year. Mexican sales decreased 1% from Ps. 4,018 million in the second quarter of 2012 to Ps. 3,965 million in the third quarter of the same year. The average sales price decreased 6% in the third quarter of 2012 compared to the second quarter of the same year.

Cost of Sales
Cost of sales decreased 12% from Ps. 6,901 million in the second quarter of 2012 to Ps. 6,093 million in the third quarter of 2012. Cost of sales as a percentage of net sales represented 85% as the second quarter of 2012 as the third quarter of the same year, the average cost of sales by ton record a decrease between both quarters of 6% due to a price decrease in raw materials also a less volume of domestic and foreign sales.

Gross Profit
Gross profit of the Company for the third quarter of 2012 decreased 15% to pass of Ps. 1,249 million in the second quarter of 2012 to Ps. 1,061 million in the third quarter of same year. Gross profit as a percentage of net sales in both quarters of 2012 was of 15%. The decreased in the gross profit in the third quarter of 2012 is caused by less volume of shipments in 38 thousand tons in the third quarter compared to the second quarter of the same year.

Operating Income
Operating income decreased 15%, of Ps. 942 million in the second quarter of 2012 compared to Ps. 802 of the third quarter of the same year. Operating income as percentage of net sales was 12% in the second quarter of 2012 and 11% in the third quarter of the same year. The decrease in operating income is due principally to a less level of sales in the third quarter.

EBITDA
The EBITDA in the third quarter of 2012 show an decrease of 14% compared to the second quarter of the same year, this is due to previously mentioned. The EBITDA, of the third quarter was of Ps. 1,033 million versus Ps. 1,197 million in the second quarter of 2012.

Net Income
As a result of the foregoing, the Company recorded a decrease of 45% from a net income of Ps. 1,048 million in the second quarter of 2012 compared to a net income of Ps. 576 million for the third quarter of 2012.

Comparative third quarter of 2012 vs. third quarter of 2011
Net Sales
Net sales of the Company decreased 7% from Ps. 7,676 million during the third quarter of 2011 to Ps. 7,154 million in the third quarter of 2012. Sales in tons of finished steel decreased 6% from 592 thousand tons in the third quarter of 2011 compared with 558 thousand tons in the third quarter of 2012. Sales outside of Mexico in the third quarter of 2012 decreased 23% from Ps. 4,120 million in the third quarter of 2011 to Ps. 3,188 million in the third quarter of 2012. Mexican sales increase 12% from Ps. 3,556 million in the third quarter of 2011 to Ps. 3,965 million in the third quarter of 2012. Average sales prices of finished products by ton decreased 1% in the third quarter of 2012 compared to the third quarter of 2011.

Cost of Sales
Cost of sales decreased 11% in the third quarter of 2012 compared to the third quarter of 2011 from Ps. 6,813 million in the third quarter of 2011 to Ps. 6,093 million in the third quarter of 2012. With respect to sales, the cost of sales of the third quarter of 2012 represented 86% compared to 85% for the third quarter of 2011. The average cost of raw materials used to produce steel products decreased 5% in the third quarter of 2012 versus the third quarter of 2011, due to decrease of raw materials, decrease in the volume of shipments and special profiles (SBQ).

Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2012 amount to Ps. 1,061 million compared to Ps.863 million in the third quarter of 2011, this represented an increase of 23% between both periods. Gross profit as a percentage of net sales for the third quarter of 2012 was 15% compared to 11% of the third quarter of 2011. The increase in gross profit is due mainly for a better average of steels mix shipment of the third quarter of 2012 compared with the third quarter of 2011.

Operating (Loss) Income
Operating income amounted to Ps. 802 million in the third quarter 2012 compared to Ps. 652 million in the third quarter of 2011, this represent 23% of increase between both quarters. The operating income as a percentage of net sales in the third quarter was 11% in the third quarter of 2012 and 8% in the third quarter of 2011. The increase in the operating income is due to better average of steels mix shipment.

EBITDA
The EBITDA of the third quarter of 2012 increase compared to the same period of 2011 in 6% from Ps 971 million in the third quarter of 2011 to Ps. 1,033 million of the same period of 2012, this is due to the above explained in the operating income.

Net Income (Loss)
As a result of the foregoing, the Company net income was of Ps. 576 million in the third quarter of 2012 compared to Ps. 660 million for the third quarter of 2011, a decrease of 13% between both quarters.