Grupo Simec Announces Results of Operations for the First Six Months of 2012
GUADALAJARA, Mexico, July 26, 2012 /PRNewswire/ — Grupo Simec, S.A.B. de C.V. (AMEX: SIM) (“Simec”) announced today its results of operations for the sixth-month period ended June 30, 2012.
Comparative first six months of 2012 vs. first six months of 2011
Net Sales
Net sales of the Company increased 18% from Ps. 13,758 million in the first half of 2011 to Ps. 16,264 million in the first half of 2012. Shipments of finished steel products increased 4% from 1,139 thousand tons in the first half of 2011 to 1,184 thousand tons in the first half of 2012. Total sales outside of Mexico in the first half of 2012 increased 11% to Ps. 8,420 million compared to Ps. 7,575 million in the first half of 2011. Mexican sales increased 27% from Ps. 6,183 million in the first half of 2011 to Ps. 7,844 million in the first half of 2012. The increase in sales for the first half of 2012 compared to the first half of 2011, is due to the combined of better average sales price of 14% and increase in the volume of shipments approximately of 45 thousand tons that represent a 4%.
Cost of Sales
Cost of sales increased 14% from Ps. 12,122 million in the first half of 2011, to Ps. 13,860 million in the first half of 2012. Cost of sales as a percentage of net sales represented 85% in the first half of 2012 while in the first half of 2011 represented 88%. Cost of sales increase due to the major volume shipment and increase in certain raw materials.
Gross Profit
Gross profit of the Company for the first half of 2012 increased 47% from Ps. 1,636 million in the first half of 2011, to Ps. 2,404 million in the first half of 2012. Marginal profit as percentage of net sales in the first half of 2012 was of 15% while in the first half 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.
General, Selling and Administrative Expense
Selling, general and administrative expense increase 33%, from Ps. 453 million in the first half of 2011 to Ps. 604 million in the same period 2012, selling, general and administrative expense represented 4% of the net sales of the first half of 2012 and 3% of net sales in the first half of 2011.
Other Income (Expenses,) net
The Company recorded other expense net for Ps. 8 million during the first half of 2012 while in the same period of 2011 the other expense net by this concept was of Ps. 8 million.
Operating Income
Operating income increased 53% from Ps. 1,175 million for the first half of 2011 compared to Ps. 1,792 million in the first half of 2012. Operating income as percentage of net sales was 11% in the first half 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 half of 2012, increase in Ps 618 million or 37% compared to first half of 2011, due to a better in the average sales price and to a major volume shipments. The EBITDA passed of Ps. 1,678 million of the first half of 2011 to Ps. 2,296 million in the first half of 2012
Comprehensive Financial Cost
Comprehensive financial cost for the first half of 2012 represented an expense of Ps. 27 million compared with of Ps. 172 million of expense for the first six half of 2011. The comprehensive financial cost is comprised by the exchange loss of Ps.28 million in the first half of 2012 compared with an exchange loss of Ps. 176 million in the first half of 2011. Also record a net income interest of Ps. 1 million and Ps. 4 million in 2012 and 2011 respectively. As of June 30, 2012 the Mexican peso record a revaluation of 2% versus dollar compared the exchange rate of Mexican peso to dollar as of December 31, 2011.
Income Taxes
The Company recorded an income of Ps. 49 million for the net income tax during the first half of 2012, (comprised for a current income tax of Ps. 16 million and deferred income tax of Ps. 65 million) compared with an income of Ps. 26 million of income tax for the first half of 2011 (comprised for a current income tax of Ps. 17 million and an income for deferred income tax of Ps. 43 million).
Net Income
As a result of the foregoing, the Company record an increase in net income of 94% to pass of Ps. 917 million in the first half of 2011 to Ps. 1,777 million of the same period of 2012.
Comparative second quarter of 2012 vs. first quarter of 2012
Net Sales
Net sales of the Company were very similar in the second quarter of 2012 compared to the first quarter of the same period, to pass of Ps. 8,115 million during the first quarter of 2012 to Ps. 8,150 million in the second quarter of 2012. Shipments of finished steel products increased 1% from 588 thousand tons in the first quarter of 2012 to 596 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the second quarter of 2012 decreased 4% to get to Ps. 4,132 million compared to Ps. 4,288 million of the first quarter of the same year. Mexican sales show an growth of 5% from Ps. 3,827 million in the first quarter of 2012 to Ps. 4,018 million in the second quarter of the same year. Sales between both period are very similar affected for slight fall in the average sale price in the second quarter of the year.
Cost of Sales
Cost of sales decreased 1% from Ps. 6,960 million in the first quarter of 2012 to Ps. 6,901 million in the second quarter of 2012. Cost of sales as a percentage of net sales represented 85% in the second quarter of 2012 while in the first quarter of the same year represented 86%, the average cost of sales by ton record a decrease between both quarters of 2%..
Gross Profit
Gross profit of the Company for the second quarter of 2012 increased 8% to pass of Ps. 1,155 million in the first quarter of 2012 to Ps. 1,249 million in the second quarter of same year. Gross profit as a percentage of net sales in the second quarter of 2012 was of 15%, while that in the first quarter was of 14%. The increased in the gross profit in the second quarter of 2012 is caused by the combination of slight fall in the average sales price, cost of sale by ton and better volume of finished good shipments between both quarters.
General, Selling and Administrative Expense
Selling, general and administrative expense decrease 9%, of Ps. 316 million in the first quarter of 2012 and Ps. 288 million in the second quarter of the same year, and as percentage of net sales represented 4% for both quarters.
Other (Expenses) Income, net
The Company recorded other expense net for Ps. 19 million during the second quarter of 2012 compared to other income net for Ps. 11 million in the first quarter of 2012.
Operating Income
Operating income increased 11%, of Ps. 850 million in the first quarter of 2012 compared to Ps. 942 of the second quarter of the same year. Operating income as percentage of net sales was 10% in the first quarter of 2012 and 12% in the second quarter of the same year. The increase in operating income is due to a better gross profit and reduction in the general, sell and administrative expense of the second quarter.
EBITDA
The EBITDA in the second quarter of 2012 show an increase of 9% compared to the first quarter of the same year, this is due to previously mentioned. The EBITDA, of the second quarter was of Ps. 1,197 million versus Ps. 1,098 million in the first quarter of 2012.
Comprehensive Financial Cost
Comprehensive financial cost of the Company in the second quarter of 2012 represented an income of Ps. 120 million compared with an expense of Ps. 147 million for the first quarter of 2012. The comprehensive financial cost is comprised for: the net interest income, of Ps. 2 million in the second quarter of 2012, while that in the first quarter represented a net expense interest net of Ps. 2 million. Also we record a net exchange gain net of Ps. 118 million in the second quarter of 2012 compared a net exchange loss of Ps. 145 million in the first quarter of the same year.
Income Taxes
The Company have been recorded an income of Ps. 19 million of income tax during the second quarter of 2012, (comprised for a current income tax of Ps. 14 million and an income for deferred income tax of Ps. 33 million) compared with the Ps. 30 million of income for the first quarter of the same year, (comprised for a current income tax of Ps. 2 million and of an income for deferred income tax of Ps. 32 million).
Net Income
As a result of the foregoing, the Company recorded an increase of 44% from a net income of Ps. 729 million in the first quarter of 2012 compared to a net income of Ps. 1,048 million for the second quarter of 2012.
Liquidity and Capital Resources
As of June 30, 2012, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN’s”) due 1998, or Ps. 4.1 million (accrued interest on June 30, 2011 was U.S. $486,000, or Ps. 6.6 million). 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, or Ps. 3.7 million (accrued interest on December 31, 2010 was U.S. $445,000, or Ps. 5.5 million).
Comparative second quarter of 2012 vs. second quarter of 2011
Net Sales
Net sales of the Company increased 13% from Ps. 7,193 million during the second quarter of 2011 to Ps. 8,150 million in the second quarter of 2012. Sales in tons of finished steel decreased 1% from 601 thousand tons in the second quarter of 2011 compared with 596 thousand tons in the second quarter of 2012. Sales outside of Mexico in the second quarter of 2012 increased 6% from Ps. 3,897 million in the second quarter of 2011 to Ps. 4,132 million in the second quarter of 2012. Mexican sales increase 22% from Ps. 3,296 million in the second quarter of 2011 to Ps. 4,018 million in the second quarter of 2012. Average sales prices of finished products by ton increased 14% in the second quarter of 2012 compared to the second quarter of 2011.
Cost of Sales
Cost of sales increased 8% in the second quarter of 2012 compared to the second quarter of 2011 from Ps. 6,417 million in the second quarter of 2011 to Ps. 6,901 million in the second quarter of 2012. With respect to sales, the cost of sales of the second quarter of 2012 represented 85% compared to 89% for the second quarter of 2011. The average cost of raw materials used to produce steel products increased 8% in the second quarter of 2012 versus the second quarter of 2011, due to increase of raw materials.
Gross (Loss) Profit
Gross profit of the Company for the second quarter of 2012 amount to Ps. 1,249 million compared to Ps.776 million in the second quarter of 2011, this represented an increase of 61% between both periods. Gross profit as a percentage of net sales for the second quarter of 2012 was 15% compared to 11% of the second quarter of 2011. The increase in gross profit is due mainly for a better average sales price of the second quarter of 2012 compared with the second quarter of 2011.
General, Selling and Administrative Expense
The selling, general and administrative expense increased 68% in the second quarter of 2012 from Ps. 171 million in the second quarter of 2011 to Ps. 288 million in the second quarter of 2012. Selling, general and administrative expense as a percentage of net sales represented 4% during the second quarter of 2012 and 2% during the second quarter of 2011.
Other Income (Expenses), net
The company recorded other expense net of Ps. 19 million in the second quarter of 2012 compared with other expense net of Ps. 9 million for the second quarter of 2011.
Operating (Loss) Income
Operating income amounted to Ps. 942 million in the second quarter 2012 compared to Ps. 596 million in the second quarter of 2011, this represent 58% of increase between both quarters. The operating income as a percentage of net sales in the second quarter of 2012 was 12% in the second quarter of 2012 and 8% in the second quarter of 2011. The increase in the operating income is due to better average sales price effective in the second quarter of 2012 compared to the same period of 2011, even the effect of the selling, general and administrative expense increased in Ps. 117 million in the second quarter of 2012.
EBITDA
The EBITDA of the second quarter of 2012 increase compared to the same period of 2011 in 42% from Ps 845 million in the second quarter of 2011 to Ps. 1,197 million of the same period of 2012, this is due to the above explained in the operating income.
Comprehensive Financial Cost
Comprehensive financial cost of the Company for the second quarter of 2012 represented a net income of Ps. 120 million compared with an expense of Ps. 87 million for the second quarter of 2011. The comprehensive financial cost is comprised for; the net interest income of Ps. 2 million in the second quarter of 2012, compared to an net interest income of Ps. 2 million for the same period of 2011. Also record an exchange gain of Ps. 118 million in the second quarter of 2012 and an exchange loss of Ps. 89 million in the second quarter of 2011.
Income Taxes
The company recorded an income for income tax for Ps. 19 million in the second quarter of 2012, (comprised for a current income tax of Ps. 14 million and an income for deferred income tax of Ps. 33 million) compared to an income of Ps. 12 million for income tax for the second quarter of 2011, (comprised for an income of current income tax of Ps. 5 million and an income for deferred income tax of Ps. 7 million).
Net Income (Loss)
As a result of the foregoing, the Company net income was of Ps. 1,048 million in the second quarter of 2012 compared to Ps. 454 million for the second quarter of 2011, an increase of 131% between both quarters.
Year 12
(millon of pesos) 1H '12 1H '11 vs
----------------- ------ ------ '11
---
Sales 16,264 13,758 18%
----- ------ ------ ---
Cost of Sales 13,860 12,122 14%
------------- ------ ------ ---
Gross Profit 2,404 1,636 47%
------------ ----- ---
Selling, General and
Administrative Expense 604 453 33%
----------------------- --- --- ---
Other Income (Expenses), net (8) (8) 0%
---------------------------- --- ---
Operating Profit 1,792 1,175 53%
---------------- ----- ---
EBITDA 2,296 1,678 37%
------ ----- ---
Net income 1,777 917 94%
---------- ----- ---
Sales Outside Mexico 8,420 7,575 11%
-------------------- ----- ---
Sales in Mexico 7,844 6,183 27%
--------------- ----- ---
Total Sales (Tons) 1,184 1,139 4%
------------------ ----- ---
Quarter
-------
2Q´12vs 2Q´12 vs
(millones of pesos) 2Q'12 1Q '12 2Q '11 1Q´12 2Q '11
------------------- ----- ------ ------ -------- ---------
Sales 8,150 8,115 7,193 0% 13%
-------------------- ----- ----- --- ---
Cost of Sales 6,901 6,960 6,417 (1%) 8%
------------- ----- ----- ---- ---
Gross Profit 1,249 1,155 776 8% 61%
------------ ----- ----- --- ---
Selling, General and
Adm. Expenses 288 316 171 (9%) 68%
-------------------- --- --- --- ---- ---
Other Income
(Expenses), net (19) 11 (9) (273%) 111%
---------------- --- --- --- ------ ---
Operating Profit 942 850 596 11% 58%
---------------- --- --- --- ---
EBITDA 1,197 1,098 845 9% 42%
------ ----- ----- --- ---
Net Income 1,048 729 454 44% 131%
---------- ----- --- --- ---
Sales Outside Mexico 4,132 4,288 3,897 (4%) 6%
-------------------- ----- ----- ---- ---
Sales in Mexico 4,018 3,827 3,296 5% 22%
--------------- ----- ----- --- ---
Total Sales (Tons) 596 588 601 1% (1%)
------------------ --- --- --- ----
Million Million
of of
Pesos Pesos
Jan- Average Jan- Average
Thousand Jun Price Thousand Jun Price
Product of Tons 2012 per Ton of Tons 2011 per Ton
Jan -
Jan-Jun Jun
2012 Jan-Jun 2011 Jan-Jun
2012 2011
Commercial
Profiles 501 5,663 11,305 419 4,148 9,900
Special
Profiles 683 10,601 15,521 720 9,610 13,347
Total 1,184 16,264 13,737 1,139 13,758 12,079
Million Million
of Million Thousand of Average
Pesos of of Pesos Price
Apr- Average Pesos Average Tons Apr- per Ton
Thousand Jun Price Thousand Jan- Price Apr- Jun Apr-
Product of Tons 2012 per Ton of Tons Mar per Ton Jun 2011 Jun
------- -------- ------- ------- -------- ------- ------- -------- -------- -------
Apr-Jun Jan -
2012 Apr-Jun Mar 2012 Jan-Mar 2011 2011
-------- ------- ------ ---- ------- ---- ----
2012 2012 2012
---- ---- ----
Commercial
Profiles 247 2,717 10,997 254 2,947 11,599 2164 9,746
---------- --- ----- ------ --- ----- ------ ---- -----
222
---
Special
Profiles 349 5,433 15,568 334 5,168 15,482 5,029 13,269
--------- --- ----- ------ --- ----- ------ ----- ------
379
---
Total 596 8,150 13,674 588 8,115 13,803 601 7,193 11,968
----- --- ----- ------ --- ----- ------ --- ----- ------
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.
SOURCE Grupo Simec, S.A.B. de C.V.
