1. Grupo Simec's net sales decreased to Ps. 7,783 million in Q1 2025. 2. Cost of sales dropped to Ps. 5,786 million, improving margins. 3. Gross profit slightly declined by 1% to Ps. 1,997 million. 4. Operating income increased 66%, indicating operational efficiency gains. 5. Net income fell to Ps. 1,305 million due to lower sales.
Despite operational improvements, the decline in net income and sales may discourage investors. Historically, similar patterns have led to negative market responses during earnings seasons.
The earnings report reveals key financial metrics affecting investor perception and company value. Decreasing sales and net profit could raise concerns about growth potential.
The immediate market sentiment is influenced by quarterly earnings reports, often impacting prices shortly after the announcement.
The net sales of the company decreased derived from a lower sales price. Sales decreased from Ps. 7,885 million in the first quarter of 2024 to Ps. 7,783 million in the same period of 2025. Shipments of steel finished goods decreased 1% from 479 thousand tons in the first quarter of 2024 compared to 476 thousand tons in the same period of 2025. Total sales outside of Mexico in the first quarter of 2025 decreased 6% to reach Ps. 3,469 million compared to Ps. 3,694 million in the same period of 2024. The Mexican sales increased 3% from Ps. 4,191 million in the first quarter of 2024 to Ps. 4,314 million in the same period of 2025. The average sales price per ton of steel finished goods decreased 1% in the first quarter of 2025 compared with the same period of 2024.
The cost of sales decreased from Ps. 5,876 million in the first quarter of 2024 to Ps. 5,786 million in the same period of 2025. Cost of sales as a percentage of net sales in the first quarter of 2025 and 2024 represented 74% and 75% for said periods respectively. The average cost of sales per ton of steel finished goods decreased 1% in the first quarter of 2025 compared to the same period of 2024.
The gross profit of the company decreased 1% from Ps. 2,009 million in 2024 to Ps. 1,997 million in the same period of 2025. Gross profit as a percentage of net sales in the first quarter of 2025 and 2024 represented 26% and 25% respectively. The decrease in gross profit is caused by a lower volume of tons shipped in the first quarter of 2025 compared with the same period of 2024, and lower average sales price per ton of steel finished goods.
General, selling, and administrative expenses increased 6%, from Ps. 595 million in the first quarter of 2024 to Ps. 633 million in the same period of 2025, representing 8% of net sales for both periods 2025 and 2024.
The company recorded other income net of Ps. 62 million in the first quarter of 2025 compared to other income net of Ps. 5 million in the same period of 2024.
The operating income was Ps. 1,419 million in the first quarter of 2024 compared to Ps. 1,426 million in the same period of 2025. Operating income as a percentage of net sales was 18% for both the first quarters of 2025 and 2024.
The EBITDA of the Company was Ps. 1,668 million in the first quarter of 2024 (result of a net income of Ps. 1,456 million, plus income taxes of Ps. 110 million, less comprehensive financial income of Ps. 147 million, plus depreciation of Ps. 249 million). Compared to an EBITDA of Ps. 1,692 million in the same period of 2025 (result of a net income of Ps. 1,305 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 179 million, less comprehensive financial income of Ps. 57 million, plus depreciation of Ps. 266 million).
The Comprehensive financial income in the first quarter of 2025 represented a net income of Ps. 57 million compared with a net income of Ps. 147 million in the same period of 2024. Net interest was an income of Ps. 213 million in the first quarter of 2025 compared with a net income of Ps. 250 million in the same period of 2024. At the same time, Simec registered an exchange loss of Ps. 156 million in the first quarter of 2025 compared with an exchange loss of Ps. 103 million in the same period of 2024.
Income Taxes recorded an expense of Ps. 179 million in the first quarter of 2025 (including the benefits of Ps. 7 million of deferred income taxes), compared to an expense of Ps. 110 million in the same period of 2024 (including the benefits of Ps. 8 million of deferred income taxes).
As a result of the foregoing, net income decreased to Ps. 1,305 million in the first quarter of 2025 from Ps. 1,456 million in the same period of the previous year.
As of March 31, 2025, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTNs") due 1998, or Ps. 6.2 million (accrued interest on March 31, 2025 was U.S. $849 or Ps. 17.3 million). As of March 31, 2024, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes ("MTNs") due 1998, or Ps. 5.0 million (accrued interest on March 31, 2024 was U.S. $820 or Ps. 13.7 million).
The net sales of the company decreased 12% comparing Ps. 8,830 million in the fourth quarter of 2024 to Ps. 7,783 million in the first quarter of 2025. The tons sales decreased 8%, from 520 thousand tons in the fourth quarter of 2024 compared to 476 thousand tons in the first quarter of 2025. Total sales outside of Mexico in the first quarter of 2025 decreased 21% from Ps. 4,410 million in the last quarter of 2024 compared to Ps. 3,469 million in the first quarter of 2025. The Mexican sales decreased 2% from Ps. 4,420 million in the fourth quarter of 2024 to Ps. 4,314 million in the first quarter of 2025. The decrease was mainly due to a lower volume of tons shipped in the first quarter of 2025 compared with the fourth quarter of 2024.
Cost of sales decreased 22% from Ps. 7,408 million in the fourth quarter of 2024 to Ps. 5,786 million in the first quarter of 2025. Cost of sales as a percentage of net sales in the first quarter of 2025 represented 74% and in the last quarter of 2024 cost of sales represented 84%. The average cost of finished steel products in the first quarter of 2025 decreased 15% compared to the fourth quarter of 2024 as a result of lower input costs in the first quarter of 2025.
Gross profit of the company for the first quarter of 2025 increased to Ps. 1,997 million in 2025 from Ps. 1,422 million in the last quarter of 2024. Gross profit as a percentage of net sales in the first quarter of 2025 was 26% and for the last period of 2024 was 16%. The increase in gross profit was due to lower costs for inputs.
General selling, and administrative expenses decreased to Ps. 633 million in the first quarter of 2025 compared to Ps. 768 million in the fourth quarter of 2024, representing 8% for the first quarter 2025 and 9% for the fourth quarter 2024.
The company recorded other net income of Ps. 62 million in the first quarter of 2025 compared to other net income of Ps. 207 million in the fourth quarter of 2024.
Operating income increased 66% to Ps. 1,426 million in the first quarter of 2025 compared to Ps. 861 million in the last quarter of 2024. Operating income as a percentage of net sales was 18% in the first quarter of 2025, compared to 10% in the last quarter of 2024. The increase in operating profit is mainly due to lower input costs and lower expenses in the first quarter of 2025 compared to the fourth quarter of 2024.
The EBITDA of the Company was Ps. 1,178 million in the fourth quarter of 2024 (result of a net income of Ps. 1,901 million, less minority stake of Ps. 5 million, plus income taxes of Ps. 1,298 million, less comprehensive financial income of Ps. 2,333 million, plus depreciation of Ps. 317 million). Compared to an EBITDA of Ps. 1,692 million in the first quarter of 2025 (result of net income of Ps. 1,305 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 179 million, less comprehensive financial income of Ps. 57 million, plus depreciation of Ps. 266 million).
Comparative first quarter of 2025 vs fourth quarter of 2024:
| Item | 2025 | 2024 |
|---|---|---|
| Net income (loss) Controlling interest | 1,305 | 1,901 |
| Loss attributable to noncontrolling interests | (1) | (5) |
| Net income (loss) | 1,304 | 1,896 |
| Depreciation and amortization | 266 | 317 |
| Income taxes | 179 | 1,298 |
| Financial results (income) loss | (57) | (2,333) |
| EBITDA | 1,692 | 1,178 |
Comprehensive financial income in the first quarter of 2025 represented a net income of Ps. 57 million compared with a net income of Ps. 2,333 million in the fourth quarter of 2024. Net interest income of the first quarter of 2025 was of Ps. 213 million compared with an interest net income of Ps. 550 million in the last quarter of 2024. Likewise, an exchange loss of Ps. 156 million was recorded in the first quarter of 2025 against an exchange profit of Ps. 1,757 million in the last quarter of 2024. In the fourth quarter of 2024, other net financial income was recorded for Ps. 26 million.
Income Taxes recorded an expense of Ps. 179 million in the first quarter of 2025 (including an income of deferred tax of Ps. 7 million) compared to a net tax expense of Ps. 1,298 million in the fourth quarter of 2024 (including an income of deferred tax of Ps. 205 million).
As a result of the foregoing, the net income of the first quarter of 2025 is of Ps. 1,305 million compared to a net income of Ps. 1,901 million in the fourth quarter 2024.
| Item | 1Q'25 | 4Q '24 | 1Q 24 | 1Q´25 vs 4Q´24 | 1Q´25 vs 1Q '24 |
|---|---|---|---|---|---|
| Sales | 7,783 | 8,830 | 7,885 | (12 %) | (1 %) |
| Cost of Sales | 5,786 | 7,408 | 5,876 | (22 %) | (2 %) |
| Gross Profit | 1,997 | 1,422 | 2,009 | 40 % | (1 %) |
| Selling, General and Adm. Expenses | 633 | 768 | 595 | (18 %) | 6 % |
| Other Income (Expenses), net | 62 | 207 | 5 | (70 %) | 1140 % |
| Operating Profit | 1,426 | 861 | 1,419 | 66 % | 0 % |
| EBITDA | 1,692 | 1,178 | 1,668 | 44 % | 1 % |
| Net Income Controlling interest | 1,305 | 1,901 | 1,456 | (31 %) | (10 %) |
| Sales Outside Mexico | 3,469 | 4,410 | 3,694 | (21 %) | (6 %) |
| Sales in Mexico | 4,314 | 4,420 | 4,191 | (2 %) | 3 % |
| Total Sales (Tons thousands) | 476 | 520 | 479 | (8 %) | (1 %) |
| Cost per Ton (Pesos) | 12,155 | 14,246 | 12,267 | (15 %) | (1 %) |
| Product | Thousands of Tons | Millions of Pesos | Average Price per Ton | Thousands of Tons | Millions of Pesos | Average Price per Ton | Thousands of Tons | Millions of Pesos | Average Price per Ton |
|---|---|---|---|---|---|---|---|---|---|
| Commercial Long Steel | 360 | 5,374 | 14,928 | 403 | 6,350 | 15,757 | 352 | 5,435 | 15,440 |
| Special Bar Quality SBQ | 116 | 2,409 | 20,767 | 117 | 2,480 | 21,197 | 127 | 2,450 | 19,291 |
| Total | 476 | 7,783 | 16,351 | 520 | 8,830 | 16,981 | 479 | 7,885 | 16,461 |
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.
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
SOURCE Grupo Simec, S.A.B. de C.V.