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

Grupo Simec Reports Operational Results for Q1-Q3 2025

Grupo Simec, S.A.B. de C.V. recently published its financial results for the first nine months of 2025, revealing considerable challenges in the steel market. The data illustrates a noteworthy downturn in both net sales and overall profitability compared to the same period in 2024.

Declining Net Sales

In the first nine months of 2025, Grupo Simec experienced a 10% decrease in net sales, which plummeted from Ps. 24,828 million to Ps. 22,320 million. This decline can largely be attributed to a 9% drop in shipments of finished steel products and a 1% reduction in the average selling price. Total shipments of finished steel products fell to 1.4 million tons, down from 1.5 million tons in the preceding year.

Sales outside of Mexico also saw a decline, with total sales in international markets decreasing 11%, translating to Ps. 9,751 million, compared to Ps. 10,979 million in 2024. Domestically, sales decreased by 9% from Ps. 13,849 million to Ps. 12,569 million.

Cost of Sales and Profitability Challenges

Simec's cost of sales decreased 9%, dropping to Ps. 16,893 million, yet it still accounted for 76% of net sales. This is a slight increase from 75% in the prior year, indicating heightened costs relative to revenue.

Gross profit also dwindled by 13% to Ps. 5,427 million, with gross profit margins dropping from 25% to 24% of net sales. This was primarily driven by reduced volumes of steel shipped and lower selling prices.

In terms of administrative expenses, selling, general, and administrative costs rose by 11%, totaling Ps. 2,036 million, which saw these expenses jumping from 7% to 9% of net sales.

EBITDA and Operating Profit

For the nine-month period, the company's operating profit fell by 15% to Ps. 3,784 million, which represents 17% of net sales compared to 18% in the previous year. This drop in profitability can be closely tied to the reduced shipment volumes of finished steel products.

Meanwhile, the reported EBITDA fell by 11%, amounting to Ps. 4,594 million, down from Ps. 5,189 million in 2024.

Net Income and Market Dynamics

The most striking figure from the recent report is the 91% decrease in net income, which fell from Ps. 8,587 million to just Ps. 763 million. The stark contrast was mainly due to the previous year's favorable net exchange income of Ps. 3,799 million, which flipped to a loss of Ps. 3,050 million in 2025.

As Simec navigates through these challenging times, its leadership must strategize on enhancing productivity and sales while managing costs. With changing dynamics in the global steel market, the company’s ability to adapt will be crucial for future financial health.

Liquidity Position

As for liquidity, as of September 30, 2025, the company's total consolidated debt remained stable. The management noted that its medium-term notes, due in 1998, sat at approximately US$ 302,000.

In summary, Grupo Simec's recent operational results paint a picture of a challenging landscape for one of the steel industry's key players. Managing costs, boosting shipments, and enhancing pricing strategies will be essential to returning to past levels of profitability.