Grupo Simec(SIM) - 2024 Q4 - Annual Report

Financial Performance - Net sales decreased by 18% from Ps. 41,139 million in 2023 to Ps. 33,658 million in 2024, with shipments of finished steel products down 6%[3] - Gross profit fell to Ps. 8,190 million in 2024, down from Ps. 10,039 million in 2023, maintaining a gross profit margin of 24% for both years[5] - Operating income decreased by 23% from Ps. 7,603 million in 2023 to Ps. 5,830 million in 2024, representing 17% of net sales in 2024 compared to 18% in 2023[8] - EBITDA declined by 21% from Ps. 8,638 million in 2023 to Ps. 6,864 million in 2024[9] - Net income increased by 168% from Ps. 4,283 million in 2023 to Ps. 11,475 million in 2024[13] - Total sales for the year 2024 were Ps. 33,658 million, representing an 18% decrease from Ps. 41,139 million in 2023[38] - Cost of sales for 2024 was Ps. 25,468 million, also down by 18% compared to Ps. 31,100 million in 2023[38] - EBITDA for Q4 2024 was Ps. 1,673 million, a 47% increase compared to Ps. 1,140 million in Q4 2023[34] - Net income for Q4 2024 reached Ps. 2,888 million, a significant increase of 525% from Ps. 462 million in Q4 2023[39] - Revenue for the current year reached 33,657,672 thousand pesos, compared to 41,139,248 thousand pesos in the previous year, reflecting a decrease of approximately 18.0%[47] - Gross profit for the current quarter was 8,189,959 thousand pesos, up from 1,943,277 thousand pesos in the previous quarter, indicating an increase of about 12.7%[47] - Net profit attributable to owners of the parent for the current year was 11,475,209 thousand pesos, significantly higher than 4,282,906 thousand pesos in the previous year, representing an increase of approximately 168.5%[48] - Operating profit for the current year was 5,829,729 thousand pesos, down from 7,602,538 thousand pesos in the previous year, a decrease of approximately 23.4%[48] Expenses and Costs - Selling, general and administrative expenses rose by 7% from Ps. 2,317 million in 2023 to Ps. 2,487 million in 2024, accounting for 7% of net sales in 2024[6] - Cost of sales decreased by 18% from Ps. 31,100 million in 2023 to Ps. 25,468 million in 2024, with the average cost of finished steel produced down 13%[4] - Selling, General and Administrative Expenses for Q4 2024 were Ps. 654 million, a decrease of 10% from Ps. 730 million in Q4 2023[39] Financial Position - Cash and cash equivalents increased to Ps. 29,157 million in the current quarter from Ps. 23,584 million in the previous year[41] - Total assets rose to Ps. 74,809 million in the current quarter, up from Ps. 66,787 million in the previous year[41] - The company recorded a comprehensive financial cost of Ps. 1,724 million in Q4 2024, compared to a net expense of Ps. 270 million in Q4 2023[35] - The company incurred interest expenses of $3,723, a decrease from $153,729, indicating reduced financing costs[52] - The balance of retained earnings (accumulated losses) improved to $(27,707) from $(317,267), reflecting a positive shift in financial health[58] - The company’s total equity increased to $59,173,064, up from $49,780,624, representing a growth of 18.5%[58] Cash Flow - Net cash flows from operating activities increased to $5,540,079 from $4,263,295, a growth of 30% year-over-year[52] - Cash flows before income tax rose to $11,808,306, up from $6,222,898, marking an increase of 89.5%[52] - Net cash flows used in investing activities decreased to $(270,467) from $(1,283,100), indicating improved cash management[52] - The company reported a net increase in cash and cash equivalents of $5,139,392, compared to $2,737,425 in the previous year, a growth of 87.5%[52] - Total cash and cash equivalents at the end of the period reached $29,157,266, up from $23,584,335, reflecting a 23.7% increase[52] Shareholder Information - The company repurchased 36,704,310 shares, up from 36,023,685 shares in the previous year, indicating an increase of approximately 1.9%[46] - The company repurchased shares worth $126,497, compared to $89,041 in the previous year, showing an increase in shareholder returns[55] - Total number of shares representing the capital stock is 497,709,214[157] - Fixed portion of shares is 441,786, while the variable portion is 1,978,444[157] - The nominal value of shares is not specified, but the total number of shares includes 90,850,050 fixed shares and 406,859,164 variable shares[157] - The company has no coupon associated with the shares[157] Operational Insights - The company has significant investments in associates and joint ventures, with ownership percentages mostly at or near 100%[143] - The total investment in associates is recorded as zero, indicating no current financial value attributed to these investments[143] - The company is listed on the Mexican Stock Exchange under the ticker SIMEC, indicating its public trading status[144] - The document does not provide specific financial performance metrics or future guidance[157] - There is no mention of new products, technologies, market expansion, or mergers in the provided content[157] - The document focuses primarily on the characteristics of the shares rather than operational performance[157] - No financial data such as revenue or profit margins are included in the content[157] Accounting Policies - The company follows the average cost method for inventory valuation, ensuring that the recorded value does not exceed the market value or net realizable value[87] - Goodwill is recognized as an asset at the acquisition date, subject to annual impairment reviews[102] - Impairment losses for tangible and intangible assets are recognized immediately in profit or loss if the recoverable amount is less than the carrying amount[102] - Provisions are recognized when there is a present obligation and a reliable estimate can be made of the amount required to settle it[103] - Contributions to defined contribution retirement plans are recognized as expenses when employees render services[104] - Earnings per share are calculated by dividing net income attributable to controlling interest by the weighted average of common shares outstanding[105] - Current income tax is based on fiscal profits and cash flows, computed using tax rates enacted at the end of the reporting period[106] - Deferred tax assets and liabilities are recognized for temporary differences and reviewed annually for recoverability[108] Risk Management - The company utilizes derivative financial instruments to manage exposure to natural gas price fluctuations, which are recognized at fair value at the contract date and remeasured at the end of the reporting period[134] - The company employs exchange contracts or swaps for cash flow of natural gas, receiving a floating price and paying a fixed price, with fluctuations recognized as part of operating costs[135] - The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recognized in other comprehensive income, while gains and losses on ineffective portions are recognized immediately in income[137] - Hedge accounting is discontinued when the hedging relationship is reversed or the hedging instrument no longer meets criteria, with cumulative gains or losses remaining in equity until the forecast transaction is recognized[139] - The company is focused on managing risks associated with natural gas prices through documented hedging strategies and ongoing assessments of effectiveness[136]