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Grupo Simec Announces Results Of Operations For The First Nine Months Of 2021

·17-min read

GUADALAJARA, Mexico, Oct. 28, 2021 /PRNewswire/ -- Grupo Simec, S.A.B. de C.V. (NYSE: SIM) ("Simec") announced today its results of operations for the nine-month period ended September 30, 2021.

Comparative first nine months of 2021 vs. first nine months of 2020

Net Sales
Net sales of the Company increased to Ps. 42,736 million in the first nine months of 2021 compared to Ps. 25,739 million in the first nine months of 2020. Shipments of finished steel products increased 6% to 1 million 954 thousand tons in the first nine months of 2021 compared to 1million 839 thousand tons in the first nine months of 2020. Total sales outside of Mexico in the first nine months of 2021 increased 64% to Ps. 21,297 million compared to Ps. 12,993 million in the same period of 2020. Mexican sales increased 68% from Ps. 12,746 million in the first nine months of 2020 to Ps. 21,439 million in the same period of 2021. The increase in sales for the first nine months of 2021 is due to an increase in the average selling price in 56% and with a higher volume of shipments compared to the first nine months of 2020 (115 thousand tons equivalent to 6% increase).

Cost of Sales
Cost of sales increased 48% from Ps. 20,855 million in the first nine months of 2020, to Ps. 30,823 million in the first nine months of 2021. Cost of sales as a percentage of net sales represented 72% in the first nine months of 2021 while in the first nine months of 2020 represented 81%. Cost of sales by steel ton increased approximately 39% in the first nine months of 2021 over the same period of 2020 due to a higher price in inputs. Mainly steel scrap.

Gross Profit
Gross profit of the Company for the first nine months of 2021 increased 144% from Ps. 4,884 million in the first nine months of 2020, to Ps. 11,913 million in the first nine months of 2021. Marginal profit as percentage of net sales in the first nine months of 2021 was of 28% while in the first nine months of 2020 was of 19%. The increase in gross profit is due to a better average sale price and a higher volume shipped.

General, Selling and Administrative Expense
Selling, general and administrative expenses increased 13%, to Ps. 1,492 million in the first nine months of 2021 from Ps. 1,316 million in the same period of 2020, selling, general and administrative expenses represented 3% to the 2021 and 5% to the 2020 of the net sales for both periods.

Other Income (Expenses,) net
The Company recorded other expenses net for Ps. 50 million during the first nine months of 2021 while in the same period of 2020 the other income net by this concept was of Ps. 216 million.

Operating Income
Operating income increased 174% to Ps. 10,371 million for the first nine months of 2021 compared to Ps. 3,784 million in the first nine months of 2020. Operating income as percentage of net sales was 24% in the first nine months of 2021 and 15% in the same period of 2020. The increase in operating income is due to a better average price and a higher volume shipped during the nine months ended September 30, 2021 compared to the same period in 2020.

Ebitda
The Ebitda increased 137%, from Ps. 4,742 million in the first nine months of 2020 as a result of a net income of Ps. 3,463 million, less minority stake of Ps. 3 million, plus income taxes of Ps. 1,303 million, less comprehensive financial cost of Ps. 979 million, plus depreciation of Ps. 958 million to Ps 11,257 million in the same period of 2021 as a result of a net income of Ps. 8,290 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 2,305 million, less comprehensive financial cost of Ps. 225 million, plus depreciation of Ps. 886.

Consolidated



Million


Comparative first nine months of 2021 vs first nine months of 2020,



2021



2020

Net income (loss) attributable to Vale's stockholders



8,290




3,463

Loss attributable to noncontrolling interests



1




(3)

Net income (loss)



8,291




(3,460)

Depreciation, depletion and amortization



886




958

Income taxes



2,305




1,303

Financial results income (loss)



(225)




(979)

EBITDA



11,257




4,742









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



11,257




4,742

Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2021 represented an income of Ps. 225 million compared with an income of Ps. 979 million for the first nine months of 2020. The net interest expense was of Ps. 35 million for the first nine months of 2021, compared with a net interest income of Ps. 39 million in the same period of 2020. Likewise, we record an exchange income of Ps. 260 million in the first nine months of 2021 compared with an exchange income of Ps. 940 million in the first nine months of 2020 due to the increased slip in the exchange rate of the Ps. against the dollar of 2.82% in the first nine months of 2021.

Income Taxes
The Company recorded an expense of Ps.2,305 million for the net income tax during the first nine months of 2021, (includes a deferred expense tax of Ps. 97 million) compared with an expense of Ps. 1,303 million of income tax for the first nine months of 2020 (includes a deferred expense tax of Ps. 15 million).

Net Income
As a result of the foregoing, the Company recorded an increase in net income of 139% to pass of Ps. 3,463 million in the first nine months of 2020 to Ps. 8,290 million of the same periods of 2021.

Liquidity and Capital Resources
At September 30, 2021, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 6.2 million (accrued interest on September 30, 2021 was U.S. $ 664,000, or Ps. 13.6 million). At 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, or Ps. 6.0 million (accrued interest on December 31, 2020 was U.S. $ 640,000, or Ps. 12.8 million).

Comparative third quarter of 2021 vs. second quarter of 2021
Net Sales
Net sales of the Company decreased to pass of Ps. 15,258 million during the second quarter of 2021 to Ps. 14,122 million in the third quarter of 2021. Shipments of finished steel products decreased to 585 thousand tons in the third quarter of 2021 from 687 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the third quarter of 2021 decreased 12% to get to Ps. 7,767 million compared to Ps. 6,838 million of the second quarter of the same year. Mexican sales in the third quarter of 2021 decreased to Ps. 7,284 million compared to Ps. 7,491 million in the second quarter of the same year. The average selling price increased 9% in the third quarter of 2021 compared to the second quarter of the same year.

Cost of Sales
Cost of sales decreased to P s. 9,913 million in the third quarter of 2021 from Ps.10,854 million in the second quarter of 2021. Cost of sales as a percentage of net sales represented 70% in the third quarter of 2021 and 71% in the second quarter of the same year. The cost of sales by ton increase 7% in the third quarter of 2021 compared to the second quarter of the same year, due mainly to a increase of some supplies for the manufacture of steel.

Gross Profit
Gross profit of the Company for the third quarter of 2021 decreased 4% to pass of Ps. 4,404 million in the second quarter of 2021 to Ps. 4,209 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2021 was of 30% compared to 29% in the second quarter of the same year. The decreased in the gross profit is due to the lowest volume shipped in the third quarter compared to the second quarter of 2021.

General, Selling and Administrative Expense
Selling, general and administrative expense remained to of Ps. 509 million in the second quarter of 2021 to Ps. 508 million in the third quarter of the same year, and as percentage of net sales represented 3% in the second quarter and 4% in the third quarter of the same year.

Other (Expenses) Income, net
The Company recorded other expenses net for Ps. 20 million during the third quarter of 2021 compared to other expenses net for Ps. 17 million in the second quarter of 2021.

Operating Income
The Operating income was of Ps. 3,681 million in the third quarter of 2021 compared to Ps. 3,878 million in the second quarter of the same year. Operating income as percentage of net sales represented 26% for the third quarter of 2021 and 25% for the second quarter of 2021.

Ebitda
The Ebitda show an decrease of 5%, to pass of Ps 4,170 million in the second quarter of 2021 as a result of a net income of Ps. 2,333 million, plus minority stake of Ps. 1 million, plus income taxes of Ps. 1,240 million, plus comprehensive financial cost of Ps. 304 million, plus depreciation of Ps. 292 million to Ps. 3,974 million in the third quarter of the same year as a result of a net income of Ps. 3,313 million, plus income taxes of Ps. 674 million, less comprehensive financial cost of Ps. 306 million, plus depreciation of Ps. 293 million.

Consolidated



Million


Comparative third quarter of 2021 vs second quarter of 2021,



Third quarter 2021



Second quarter 2021

Net income (loss) attributable to Vale's stockholders



3,313




2,333

Loss attributable to noncontrolling interests







1

Net income (loss)



3,313




2,334

Depreciation, depletion and amortization



293




292

Income taxes



674




1,240

Financial results income (loss)



(306)




304

EBITDA



3,974




4,170









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



3,974




4,170

Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2021 represented an income of Ps. 306 million compared with an expense of Ps. 304 million for the second quarter of 2021. The comprehensive financial cost is comprised for: the net interest expense of Ps. 9 million in the third quarter of 2021 compared to net interest expense of 9 million in the second quarter of the same year. Also, we record a net exchange income of Ps. 315 million in the third quarter of 2021 compared a net exchange loss of Ps. 295 million in the second quarter of the same year.

Income Taxes
The Company have been recorded Ps. 674 million of expense tax during the third quarter of 2021, (includes a deferred expense tax of Ps. 75 million) compared with the Ps. 1,240 million of expense for the second quarter of the same year, (includes a deferred expense tax of Ps. 30 million).

Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 3,313 million in the third quarter of 2021 compared to a net income of Ps. 2,333 million for the second quarter of 2021.

Comparative third quarter of 2021 vs. third quarter of 2020
Net Sales
Net sales of the Company increased 46% from Ps. 9,643 million during the third quarter of 2020 to Ps. 14,122 million in the third quarter of 2021. Sales in tons of finished steel decreased to 585 thousand tons in the third quarter of 2021 from 676 thousand tons in the third quarter of 2020. Sales outside of Mexico increased 42% from Ps. 4,824 million in the third quarter of 2020 to Ps. 6,838 million in the third quarter of 2021. Mexican sales increased 51% from Ps. 4,819 million in the third quarter of 2020 to Ps. 7,284 million in the third quarter of 2021. The average sales price increased approximately 69% in the third quarter of 2021, compared to the same period of 2020.

Cost of Sales
Cost of sales increased 29% in the third quarter of 2021 compared to the third quarter of 2020 from Ps. 7,682 million in the third quarter of 2020 to Ps. 9,913 million in the third quarter of 2021. With respect to sales, the cost of sales of the third quarter of 2020 represented 80% compared to 70% for the third quarter of 2021. The average cost of raw materials used to produce steel products increased in 49%, due to an increase of raw materials prices. Mainly steel scrap.

Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2021 increased 115% from Ps. 1,961 million in the third quarter of 2020 compared to Ps. 4,209 million in the third quarter of 2021. Gross profit as a percentage of net sales for the third quarter of 2021 was 30% compared to 20% of the third quarter of 2020. The increase in gross profit is due to a better average sales price.

General, Selling and Administrative Expense
The selling, general and administrative expense increased 13% in the third quarter of 2021 to Ps. 508 million in the third quarter of 2021 from Ps. 449 million in the third quarter of 2020. Selling, general and administrative expense as a percentage of net sales represented 4% in the third quarter of 2021 and 5% in the third quarter of 2020.

Other Income (Expenses), net
The company recorded other expense net of Ps. 20 million in the third quarter of 2021 compared with other income net of Ps. 56 million for the third quarter of 2020.

Operating (Loss) Income
Operating income increased from Ps. 1,568 million in the third quarter of 2020 compared to Ps. 3,681 million in the third quarter of 2021, this represent 135% of increase between both quarters. The operating income as a percentage of net sales was 26% for the third quarter of 2021 compared to 16% for the third quarter of 2020. The increase in the operating income is due to higher average price.

Ebitda
The Ebitda of the Company increased 110% from Ps 1,891 million in the third quarter of 2020 as a result of a net income of Ps. 1,003 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 352 million, plus comprehensive financial cost of Ps. 214 million, plus depreciation of Ps. 323 million to Ps. 3,974 million of the same period of 2021, as a result of a net income of Ps. 3,313 million, plus income taxes of Ps. 674 million, less comprehensive financial cost of Ps. 306 million, plus depreciation of Ps. 293 million.

Consolidated



Million


Comparative third quarter of 2021 vs third quarter of 2020,



Third quarter 2021



Third quarter 2020

Net income (loss) attributable to Vale's stockholders



3,313




1,003

Loss attributable to noncontrolling interests







(1)

Net income (loss)



3,313




1,002

Depreciation, depletion and amortization



293




323

Income taxes



674




352

Financial results income (loss)



(306)




214

EBITDA



3,974




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



3,974




1,891

Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2021 represented a net income of Ps. 306 million compared with an expense of Ps. 214 million for the third quarter of 2020. The comprehensive financial cost is comprised for: the net interest expense of Ps. 6 million in the third quarter of 2020, compared to a net interest expense of Ps. 9 million for the same period of 2021. Also record an exchange loss of Ps. 208 million in the third quarter of 2020 and an exchange income of Ps. 315 million in the third quarter of 2021.

Income Taxes
The company recorded an expense tax for Ps. 674 million in the third quarter of 2021, (includes a deferred expense tax of Ps. 75 million) compared to an expense tax of Ps. 352 million for the third quarter of 2020, (includes an accrual of deferred income tax of Ps. 18 million).

Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 3,313 million in the third quarter of 2021 compared to a net income of Ps. 1,003 million for the same period of 2020.

(millions of pesos)

Jan - Sep '21


Jan - Sep '20


Year 21 vs
'20

Sales

42,736


25,739


66%

Cost of Sales

30,823


20,855


48%

Gross Profit

11,913


4,884


144%

Selling, General and Administrative Expense

1,492


1,316


13%

Other Income (Expenses), net

(50)


216


(123%)

Operating Profit

10,371


3,784


174%

EBITDA

11,257


4,742


137%

Net income

8,290


3,463


139%

Sales Outside Mexico

21,297


12,993


64%

Sales in Mexico

21,439


12,746


68%

Total Sales (Tons)

1,954


1,839


6%

Cost by ton

15,774


11,340


39%

Quarter






(millions of pesos)

3Q'21

2Q '21

3Q '20

3Q´21vs
2Q´21

3Q´21 vs
3Q '20

Sales

14,122

15,258

9,643

(7%)

46%

Cost of Sales

9,913

10,854

7,682

(9%)

29%

Gross Profit

4,209

4,404

1,961

(4%)

115%

Selling, General and Adm. Expenses

508

509

449

0%

13%

Other Income (Expenses), net

(20)

(17)

56

18%

(136%)

Operating Profit

3,681

3,878

1,568

(5%)

135%

EBITDA

3,974

4,170

1,891

(5%)

110%

Net Income

3,313

2,333

1,003

42%

230%

Sales Outside Mexico

6,838

7,767

4,824

(12%)

42%

Sales in Mexico

7,284

7,491

4,819

(3%)

51%

Total Sales (Tons)

585

687

676

(15%)

(13%)

Cost per Tons

16,945

15,799

11,364

7%

49%

Product

Thousands of Tons

Jan-Sep 2021

Millions of Pesos Jan-Sep 2021

Average Price per Ton

Jan-Sep

2021

Thousands of Tons

Jan – Sep 2020

Millions of Pesos Jan- Sep 2020

Average Price per Ton

Jan-Sep

2020

Special Profiles

714

17,116

23,972

571

9,695

16,979

Commercial Profiles

1,240

25,620

20,661

1,268

16,044

12,653

Total

1,954

42,736

21,871

1,839

25,739

13,996

Product

Thousands of Tons

Jul-Sep 2021

Millions of Pesos Jul-Sep 2021

Average Price per Ton

Jul-Sep

2021

Thousands of Tons

Apr-Jun

2021

Millions of Pesos Apr-Jun

2021

Average Price per Ton

Apr-Jun

2021

Thousands of Tons Jul-Sep

2020

Millions of Pesos Jul-Sep 2020

Average Price per Ton Jul-Sep

2020

Special Profiles

225

5,976

26,560

242

5,900

24,380

215

3,551

16,516

Commercial Profiles

360

8,146

22,628

445

9,358

21,029

461

6,092

13,215











Total

585

14,122

24,140

687

15,258

22,210

676

9,643

14,265

Contact: José 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

Cision
Cision

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