#Mexico #financial results #Steel Industry #Guadalajara #Grupo Simec

Grupo Simec's Financial Overview for Q1 2025

Grupo Simec, S.A.B. de C.V. (NYSE: SIM), based in Guadalajara, Mexico, has released its financial results for the first quarter of 2025, closing on March 31. In a comparative analysis with the first quarter of 2024, the company experienced a decline in net sales, primarily attributed to lower sales prices. The total net sales dropped from Ps. 7,885 million in Q1 2024 to Ps. 7,783 million in the same quarter of 2025.

Sales Performance

The shipped volume of finished steel products also saw a minor reduction, slipping 1% from 479,000 tons in Q1 2024 to 476,000 tons in Q1 2025. Breaking down the figures, international sales contracted by 6%, resulting in Ps. 3,469 million, compared to Ps. 3,694 million last year. Conversely, domestic sales slightly improved, showing a 3% rise from Ps. 4,191 million in Q1 2024 to Ps. 4,314 million in Q1 2025. The average sales price per ton of finished steel edged down by 1% in the latest quarter.

Cost Analysis

Total sales costs for the company also saw a decline, reducing from Ps. 5,876 million in Q1 2024 to Ps. 5,786 million in Q1 2025. This means cost of sales made up 74% of net sales in Q1 2025, a slight improvement over the prior year’s 75%. The average cost per ton of finished steel products decreased by 1% from the same period in 2024.

Gross Profit and Margins

Grupo Simec reported a gross profit of Ps. 1,997 million in Q1 2025, slightly down from Ps. 2,009 million in the previous year. However, gross profit as a percentage of net sales improved from 25% in Q1 2024 to 26% in Q1 2025. This boost in percentage, despite lower gross profit figures, was primarily related to reduced shipping volumes and average sales prices.

General and Administrative Expenses

Operating expenses have been a point of focus, with general, selling, and administrative expenses increasing 6% from Ps. 595 million in Q1 2024 to Ps. 633 million in Q1 2025, making up 8% of net sales for both periods.

Net Income and Earnings

Simec recorded other net income of Ps. 62 million through Q1 2025, compared to just Ps. 5 million in the earlier quarter of 2024. Operating income was reported at Ps. 1,426 million for Q1 2025, reflecting a stable performance alongside the prior year’s figures. Meanwhile, EBITDA for the company improved slightly, totaling Ps. 1,692 million in Q1 2025, compared to Ps. 1,668 million in Q1 2024.

Year-over-Year Performance

Despite these figures, net income at the controlling interest fell from Ps. 1,456 million in Q1 2024 to Ps. 1,305 million in Q1 2025. This decline further highlights the tightening market conditions in the steel industry, marked by reduced international demand and fluctuating sales prices.

Outlook and Forward-Looking Statements

As Grupo Simec navigates through these economic challenges, the company’s operational strategies and cost management practices will remain crucial. The Board has indicated a commitment to focusing on core steel operations while adjusting to market dynamics promptly and effectively.

In summary, the financial insights from Grupo Simec for Q1 2025 reveal a landscape of price pressures, yet stable operating profits that position the company to continue capitalizing on domestic market opportunities. Investors will be keen to follow updates as ever-shifting steel market conditions will be pivotal in shaping future performance indicators.