#Mexico #Guadalajara #Grupo Simec #SIMEC #Steel Products

Grupo Simec 2025 Operational Results Overview

Grupo Simec, S.A.B. de C.V., a prominent player in the steel manufacturing industry listed on the NYSE under the symbol SIM, has issued its operational results for the twelve-month period ending December 31, 2025. The results reveal a notable decline across key metrics compared to the previous year.

Declining Net Sales and Shipment Volumes

In 2025, Grupo Simec reported a 10% drop in net sales, falling from Ps. 33,658 million in the prior year to Ps. 30,291 million. This decline is attributed to a 6% decrease in shipments of finished steel products and a 4% reduction in average sales prices. Specifically, the volume of finished steel products shipped was 1.933 million tons, down from 2.056 million tons in 2024. The company's sales figures outside of Mexico also suffered, decreasing by 14% to Ps. 13,234 million from Ps. 15,388 million, while sales within Mexico dropped by 7%, from Ps. 18,270 million to Ps. 17,057 million.

Cost of Sales and Gross Profit Analysis

Grupo Simec's cost of sales decreased by 12%, from Ps. 26,033 million in 2024 to Ps. 22,783 million in 2025. Despite this reduction, costs represented 75% of net sales in 2025, compared to 77% in 2024. The company experienced a 7% decrease in the average cost of finished steel, predominantly due to lower scrap costs. Consequently, Grupo Simec's gross profit marginally fell from Ps. 7,625 million in 2024 to Ps. 7,508 million in 2025, indicating a 23% gross margin on sales.

Operating Expenses Raise Concerns

Interestingly, selling, general, and administrative expenses rose by 9%, from Ps. 2,603 million to Ps. 2,829 million. This increase has resulted in these expenses comprising 9% of total net sales in 2025, placing further strain on profitability.

The operating profit saw a slight decrease of 2%, reaching Ps. 5,205 million, while the margin on operating profit stood at 16%. Meanwhile, EBITDA was reported at Ps. 6,287 million, a decline of 1% from Ps. 6,367 million in the previous year.

Net Income: A Dramatic Drop

The most alarming figure from the report is the net income, which plummeted by 86%, falling from Ps. 10,488 million in 2024 to just Ps. 1,496 million in 2025. This significant decline is primarily attributed to a shift from a net exchange profit of Ps. 5,556 million in 2024 to a net exchange loss of Ps. 3,607 million in 2025, highlighting the volatility in the financial landscape affecting Grupo Simec.

Liquidity and Financial Position

As of December 31, 2025, Grupo Simec's total consolidated debt included U.S. $302,000 of 8 7/8% medium-term notes, with accrued interest recorded significantly lower than its 2024 figures. This suggests a more stable but cautious approach to financial management moving forward.

Insights on Quarterly Performance

Looking at the quarterly results, net sales for the fourth quarter of 2025 increased by 7% compared to the third quarter, with a notable uplift in sales outside of Mexico up by 10%. The sequential growth hints at a potential recovery, although year-over-year figures remain less promising.

Conclusion

In summary, Grupo Simec's operational performance in 2025 reflects a tumultuous period characterized by reduced sales volume and profitability challenges, exacerbated by fluctuating exchange rates and market conditions. The results underscore the need for strategic adjustments to enhance resilience in a competitive landscape. Investors and stakeholders will be watching closely as the company navigates these challenges in 2026.