Grupo Simec (SIM) Q4 2023 earnings summary

Executive summary

• FY23 net sales fell 24% YoY to Ps. 41,217 million as average selling prices declined 21% and finished-steel shipments fell 4%.

• FY23 net income declined 33% to Ps. 5,186 million; adjusted EBITDA fell 29% to Ps. 9,412 million.

• Q4 gross margin improved QoQ to 29% from 24%, while net sales fell 7% and EBITDA fell 8%.

Financial highlights

• FY23 gross profit was Ps. 10,629 million, down 27% YoY; selling, general and administrative expenses decreased 4% to Ps. 2,348 million.

• FY23 operating income declined 31% YoY to Ps. 8,385 million; net income was Ps. 5,186 million versus Ps. 7,703 million in FY22.

• Q4 net sales were Ps. 8,815 million, down 13% YoY; gross profit was Ps. 2,533 million, down 6% YoY.

• Q4 net income was Ps. 1,365 million, compared with a Ps. 334 million net loss in Q4 2022.

Segment performance

• FY23 sales in Mexico declined 18% YoY to Ps. 24,326 million; sales outside Mexico declined 31% to Ps. 16,891 million.

• Q4 domestic sales fell 15% YoY to Ps. 5,495 million; sales outside Mexico fell 10% to Ps. 3,320 million.

• FY23 finished-steel shipments declined 4% YoY to 2.176 million tons; Q4 shipments were 536,000 tons versus 535,000 tons in Q4 2022.