Grupo Simec Announces Comprehensive Operational Results
Grupo Simec, S.A.B. de C.V. (NYSE: SIM), a leading industrial steel producer, recently disclosed its audited operational results for the twelve-month period concluding December 31, 2024. This report reflects pivotal shifts in the company's performance over the previous year.
Net Sales Overview
During 2024, Grupo Simec experienced a notable 18% decline in net sales, primarily driven by a decrease in shipments of finished steel products by 6% and an average sales price reduction of 13%. Sales diminished from Ps. 41,139 million in 2023 to Ps. 33,658 million in 2024. Finished steel shipments fell to 2,056 thousand tons in 2024 compared to 2,176 thousand tons the prior year. Notably, sales outside of Mexico decreased by 8%, totaling Ps. 15,388 million, down from Ps. 16,814 million in 2023. Domestically, total sales plummeted by 25%, from Ps. 24,325 million to Ps. 18,270 million in the same period.
Analyzing Cost of Sales
The cost of sales also saw a decline, diminishing from Ps. 31,100 million in 2023 to Ps. 26,033 million in 2024—a 16% reduction. This represents 77% and 76% of net sales for the respective years. The average cost of steel production decreased by 11%, largely attributed to reduced scrap prices.
Gross Profit and Operating Income
In terms of gross profit, Grupo Simec reported Ps. 7,625 million in 2024 compared to Ps. 10,039 million in 2023, indicating a gross profit margin shift from 24% to 23% for the respective years. Operating income experienced a more substantial decline, dropping by 30% from Ps. 7,603 million in 2023 to Ps. 5,301 million in 2024, representing 16% and 18% of net sales correspondingly.
EBITDA and Financial Performance
Furthermore, the company's EBITDA fell by 26%, sinking from Ps. 8,638 million in 2023 to Ps. 6,367 million in 2024. This period's net income reflected notable progress, surging by 145% from Ps. 4,283 million in the previous year to Ps. 10,488 million in 2024. This improvement stems from strategic adjustments and operational efficiencies.
Performance Comparison: 2024 vs 2023
When dissecting the quarters, the year 2024 compared favorably to previous performance in terms of sales strategies. In the fourth quarter of 2024, net sales climbed to Ps. 8,830 million from Ps. 8,549 million in the third quarter, although they lagged marginally behind the Ps. 8,738 million of the fourth quarter of 2023. The cost of sales similarly increased, requiring careful management to maintain financial health amidst fluctuating market conditions.
Year-End Debt and Financial Strategies
As of December 31, 2024, Grupo Simec's total consolidated debt stood at U.S. $302,000 in medium-term notes. Effective financial management was crucial, as reflected by the substantial net interest income of Ps. 1,616 million in 2024, compared to Ps. 778 million in the previous year.
Future Outlook
Despite the challenges faced in 2024, Grupo Simec remains optimistic about future growth and stability. By continuing to adapt to market dynamics and focusing on core operational improvements, the company aims to enhance its product offerings and market presence in the upcoming year. The strategies that underpin these goals will set the stage for resilience in the competitive steel industry.
Frequently Asked Questions
What were Grupo Simec's total net sales in 2024?
Total net sales for Grupo Simec in 2024 were Ps. 33,658 million.
How much did the operating income decrease?
The operating income decreased by 30%, from Ps. 7,603 million in 2023 to Ps. 5,301 million in 2024.
What is the EBITDA for Grupo Simec in 2024?
The EBITDA reported for Grupo Simec in 2024 was Ps. 6,367 million.
How did sales outside Mexico perform in 2024?
Sales outside Mexico decreased by 8%, totaling Ps. 15,388 million in 2024.
Who can I contact for investor relations information?
For inquiries, you can contact José Luis Tinajero or Mario Moreno Cortez at Grupo Simec, S.A.B. de C.V.
