Grupo Simec (SIM) Q3 2023 earnings summary

Executive summary

• 9M 2023 sales fell 26% YoY to Ps. 32,401m as average selling prices declined 23% and shipments fell 5%; operating income fell 34% and net income fell 52%.

• Q3 sales declined 30% YoY to Ps. 9,454m, while net income was Ps. 1,802m, down from Ps. 1,940m; QoQ net income rose from Ps. 987m.

Financial highlights

• 9M revenue Ps. 32,401m vs. Ps. 44,012m YoY; gross profit Ps. 8,096m vs. Ps. 11,769m, with gross margin at 25% vs. 27%.

• 9M operating income Ps. 6,676m vs. Ps. 10,051m; EBITDA Ps. 7,499m vs. Ps. 10,885m; net income Ps. 3,821m vs. Ps. 8,037m.

• Q3 gross profit Ps. 2,277m vs. Ps. 3,162m YoY; operating income Ps. 1,816m vs. Ps. 2,572m; EBITDA Ps. 2,079m vs. Ps. 2,857m.

• Q3 QoQ revenue fell 7% to Ps. 9,454m, while gross profit fell 13% to Ps. 2,277m and operating income fell 17% to Ps. 1,816m.

• Basic EPS was Ps. 7.68 for 9M 2023 vs. Ps. 16.15 YoY, and Ps. 3.62 in Q3 vs. Ps. 3.90 in Q3 2022.

Segment performance

• 9M finished-steel shipments decreased 5% YoY to 1.64m tons; Mexican sales fell 19% to Ps. 18,830m and sales outside Mexico fell 35% to Ps. 13,571m.

• Q3 shipments were 531k tons vs. 541k YoY; Mexican sales declined 20% to Ps. 5,522m and sales outside Mexico declined 40% to Ps. 3,932m.

• 9M commercial profiles generated Ps. 21,606m on 1.161m tons; special profiles generated Ps. 10,795m on 479k tons.