Grupo Simec(SIM) - 2025 Q2 - Quarterly Report

Report Overview Filing Information Grupo Simec filed a Form 6-K for June 2025 as a foreign private issuer under Form 20-F, signed by the CEO on July 25, 2025 - Grupo Simec, S.A.B. de C.V. filed a Form 6-K for June 2025, confirming its status as a foreign private issuer filing under Form 20-F[1][2] - The report was signed by Sergio Vigil González, Chief Executive Officer, on July 25, 2025[4] Earnings Announcement Grupo Simec, S.A.B. de C.V. announced its operational results for the six-month period ended June 30, 2025, through a press release issued on July 25, 2025 - Grupo Simec announced its results of operations for the six-month period ended June 30, 2025, on July 25, 2025[5] Financial Performance Analysis First Six Months 2025 vs. 2024 Grupo Simec saw significant 1H 2025 declines in net income and operating profit versus 1H 2024, primarily from decreased steel shipments and a substantial shift to comprehensive financial cost - The decrease in operating profit is mainly due to less shipments of finished steel products[11] - The Company recorded a decrease in net income of 94% from Ps. 5,435 million in the first half of 2024 to Ps. 304 million in the same period of 2025[16] - Comprehensive financial cost for the first half of 2025 represented an expense of Ps. 1,845 million compared with a net income of Ps. 2,809 million for the first half of 2024, primarily due to an exchange loss[14] Net Sales Net Sales Performance (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :----------------------------- | :-------------------- | :-------------------- | :--------- | | Net Sales | 14,835 | 16,279 | (9)% | | Shipments (Thousand Tons) | 901 | 1,015 | (11)% | | Average Sales Price | - | - | 3% (higher)| | Sales Outside Mexico | 6,573 | 7,287 | (10)% | | Sales in Mexico | 8,262 | 8,992 | (8)% | Cost of Sales Cost of Sales Performance (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Cost of Sales | 11,167 | 12,232 | (9)% | | Cost of Sales as % of Net Sales | 75% | 75% | 0% | | Average Cost of Finished Steel | - | - | 3% (higher)| Gross Profit Gross Profit Performance (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :----------- | :-------------------- | :-------------------- | :--------- | | Gross Profit | 3,668 | 4,047 | (9)% | | Gross Margin | 25% | 25% | 0% | Selling, General and Administrative Expenses SG&A Expenses (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | SG&A Expenses | 1,307 | 1,176 | 11% | | SG&A as % of Net Sales | 9% | 7% | 2% pts | Other Income (Expenses), net Other Income (Expenses), net (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :------------------------ | :-------------------- | :-------------------- | :--------- | | Other Income (Expenses), net | 263 | 45 | 484% | Operating Profit Operating Profit Performance (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :--------------- | :-------------------- | :-------------------- | :--------- | | Operating Profit | 2,624 | 2,916 | (10)% | | Operating Margin | 18% | 18% | 0% | EBITDA Consolidated EBITDA (1H 2025 vs. 1H 2024) | Consolidated (Ps. million) | 2025 | 2024 | Change (%) | | :------------------------- | :--- | :--- | :--------- | | Net income (loss) | 304 | 5,435| (94)% | | Depreciation and amortization | 541 | 497 | 8.9% | | Income taxes | 476 | 291 | 63.6% | | Financial results (income) loss | 1,845| (2,809)| N/C | | EBITDA | 3,165| 3,413| (7)% | Comprehensive Financial Cost Comprehensive Financial Cost (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change | | :-------------------------- | :-------------------- | :-------------------- | :----- | | Comprehensive Financial Cost | 1,845 (expense) | 2,809 (income) | Shift from income to expense | | Exchange (Loss) Income | (2,332) (loss) | 2,030 (income) | Shift from income to loss | | Net Interest Income | 487 | 737 | (34)% | Income Taxes Income Taxes (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :---------------- | :-------------------- | :-------------------- | :--------- | | Net Tax Expense | 476 | 291 | 63.6% | | Current Tax Expense | 383 | 412 | (7)% | | Deferred Tax (Expense) Income | 93 (expense) | (121) (income) | Shift from income to expense | Net Income Net Income Performance (1H 2025 vs. 1H 2024) | Metric | 1H 2025 (Ps. million) | 1H 2024 (Ps. million) | Change (%) | | :--------- | :-------------------- | :-------------------- | :--------- | | Net Income | 304 | 5,435 | (94)% | Second Quarter 2025 vs. First Quarter 2025 In Q2 2025, Grupo Simec experienced a significant deterioration in financial performance compared to Q1 2025, reporting a net loss of Ps. 1,000 million, a sharp decline from a net income of Ps. 1,305 million in the previous quarter, primarily driven by decreased net sales, lower shipments, and a substantial increase in comprehensive financial cost due to exchange losses - Net sales decreased 9% in Q2 2025 compared to Q1 2025, mainly due to lower shipments of finished steel products (11%)[17] - The Company recorded a decrease in net income from Ps. 1,305 million in Q1 2025 to a net loss of Ps. 1,000 million for Q2 2025[29] - Comprehensive financial cost in Q2 2025 was an expense of Ps. 1,902 million, a significant shift from a net income of Ps. 57 million in Q1 2025, primarily due to a net exchange loss of Ps. 2,176 million[27] Net Sales Net Sales Performance (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :----------------------------- | :-------------------- | :-------------------- | :--------- | | Net Sales | 7,052 | 7,783 | (9)% | | Shipments (Thousand Tons) | 425 | 476 | (11)% | | Average Sales Price | - | - | 1% (higher)| | Sales Outside Mexico | 3,104 | 3,469 | (11)% | | Domestic Sales | 3,948 | 4,314 | (8)% | Cost of Sales Cost of Sales Performance (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Cost of Sales | 5,381 | 5,786 | (7)% | | Cost of Sales as % of Net Sales | 76% | 74% | 2% pts | | Average Cost of Sales per Ton | - | - | 4% (increase)| Gross Profit Gross Profit Performance (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :----------- | :-------------------- | :-------------------- | :--------- | | Gross Profit | 1,671 | 1,997 | (16)% | | Gross Margin | 24% | 26% | (2)% pts | Selling, General and Administrative Expense SG&A Expense (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | SG&A Expense | 674 | 633 | 6% | | SG&A as % of Net Sales | 10% | 8% | 2% pts | Other (Expenses) Income, net Other (Expenses) Income, net (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :------------------------ | :-------------------- | :-------------------- | :--------- | | Other Income (Expenses), net | 201 | 62 | 224% | Operating Income Operating Income Performance (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :--------------- | :-------------------- | :-------------------- | :--------- | | Operating Income | 1,198 | 1,426 | (16)% | | Operating Margin | 17% | 18% | (1)% pts | EBITDA Consolidated EBITDA (Q2 2025 vs. Q1 2025) | Consolidated (Ps. million) | Q2 2025 | Q1 2025 | Change (%) | | :------------------------- | :------ | :------ | :--------- | | Net income (loss) | (1,000) | 1,305 | N/C |\ | Depreciation and amortization | 275 | 266 | 3.4% |\ | Income taxes | 297 | 179 | 65.9% |\ | Financial results (income) loss | 1,902 | (57) | N/C |\ | EBITDA | 1,473 | 1,692 | (13)% | Comprehensive Financial Cost Comprehensive Financial Cost (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change | | :-------------------------- | :-------------------- | :-------------------- | :----- | | Comprehensive Financial Cost | 1,902 (expense) | 57 (income) | Shift from income to expense | | Net Interest Income | 274 | 213 | 28.6% | | Net Exchange Loss | (2,176) | (156) | 1295% | Income Taxes Income Taxes (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change (%) | | :---------------- | :-------------------- | :-------------------- | :--------- | | Income Tax Expense | 297 | 179 | 65.9% | | Current Tax Expense | 197 | 186 | 5.9% | | Deferred Tax (Expense) Income | 100 (expense) | (7) (income) | Shift from income to expense | Net Income Net Income Performance (Q2 2025 vs. Q1 2025) | Metric | Q2 2025 (Ps. million) | Q1 2025 (Ps. million) | Change | | :--------- | :-------------------- | :-------------------- | :----- | | Net Income | (1,000) (loss) | 1,305 (income) | Shift from income to loss | Second Quarter 2025 vs. Second Quarter 2024 In Q2 2025, Grupo Simec reported a net loss of Ps. 1,000 million, a significant reversal from a net profit of Ps. 3,979 million in Q2 2024, primarily driven by a 16% decrease in net sales due to lower shipment volumes, increased SG&A expenses, and a dramatic shift from comprehensive financial income to a large financial cost, mainly from exchange losses - Net sales decreased 16% in Q2 2025 compared to Q2 2024, primarily due to a 21% decrease in finished steel product shipments, despite a 6% increase in average sales price[31] - The Company recorded a net loss of Ps. 1,000 million in Q2 2025 compared to Ps. 3,979 million of net profit in Q2 2024[41] - Comprehensive financial cost for Q2 2025 was a net expense of Ps. 1,902 million, a significant shift from a net income of Ps. 2,662 million for Q2 2024, largely due to an exchange loss of Ps. 2,176 million[39] Net Sales Net Sales Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :----------------------------- | :-------------------- | :-------------------- | :--------- | | Net Sales | 7,052 | 8,394 | (16)% | | Shipments (Thousand Tons) | 425 | 536 | (21)% | | Average Sales Price | - | - | 6% (increase)| | Sales Outside Mexico | 3,104 | 3,593 | (14)% | | Domestic Sales | 3,948 | 4,801 | (18)% | Cost of Sales Cost of Sales Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Cost of Sales | 5,381 | 6,356 | (15)% | | Cost of Sales as % of Net Sales | 76% | 76% | 0% | | Average Cost of Sales by Ton | - | - | 7% (increase)| Gross (Loss) Profit Gross Profit Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :----------- | :-------------------- | :-------------------- | :--------- | | Gross Profit | 1,671 | 2,038 | (18)% | | Gross Margin | 24% | 24% | 0% | - The decrease in gross profit is mainly due to a lower volume of finished steel products shipped[33] Selling, General and Administrative Expense SG&A Expenses (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | SG&A Expenses | 674 | 580 | 16% | | SG&A as % of Net Sales | 10% | 7% | 3% pts | Other Income (Expenses), net Other Income (Expenses), net (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :------------------------ | :-------------------- | :-------------------- | :--------- | | Other Income (Expenses), net | 201 | 40 | 403% | Operating (Loss) Income Operating Income Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :--------------- | :-------------------- | :-------------------- | :--------- | | Operating Income | 1,198 | 1,498 | (20)% | | Operating Margin | 17% | 18% | (1)% pts | - The decrease in operating profit was due to a lower volume of finished steel products shipped[36] EBITDA Consolidated EBITDA (Q2 2025 vs. Q2 2024) | Consolidated (Ps. million) | Q2 2025 | Q2 2024 | Change (%) | | :------------------------- | :------ | :------ | :--------- | | Net income (loss) | (1,000) | 3,979 | N/C |\ | Depreciation and amortization | 275 | 249 | 10.4% |\ | Income taxes | 297 | 181 | 63.9% |\ | Financial results (income) loss | 1,902 | (2,662) | N/C |\ | EBITDA | 1,473 | 1,747 | (16)% | Comprehensive Financial Cost Comprehensive Financial Cost (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change | | :-------------------------- | :-------------------- | :-------------------- | :----- | | Comprehensive Financial Cost | 1,902 (expense) | 2,662 (income) | Shift from income to expense | | Net Interest Income | 274 | 487 | (43.7)%|\ | Exchange (Loss) Income | (2,176) (loss) | 2,133 (income) | Shift from income to loss | Income Taxes Income Taxes (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change (%) | | :---------------- | :-------------------- | :-------------------- | :--------- | | Net Tax Expense | 297 | 181 | 63.9% | | Deferred Tax (Expense) Income | 100 (expense) | (113) (income) | Shift from income to expense | Net Income (Loss) Net Income (Loss) Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Ps. million) | Q2 2024 (Ps. million) | Change | | :--------- | :-------------------- | :-------------------- | :----- | | Net Income | (1,000) (loss) | 3,979 (profit) | Shift from profit to loss | Summary Financial Tables The summary tables provide a consolidated view of Grupo Simec's financial performance for the first semester and second quarter of 2025, alongside comparative data for 2024 and Q1 2025. Key trends include significant declines in sales, operating profit, EBITDA, and net income across all comparative periods, primarily driven by reduced shipment volumes and adverse financial costs First Semester Comparative Data First Semester Financial Performance (1H 2025 vs. 1H 2024) | (Ps. million) | 1H '25 | 1H '24 | Year 25 VS' 24 | | :-------------------------------- | :----- | :----- | :------------- | | Sales | 14,835 | 16,279 | (9)% | | Cost of Sales | 11,167 | 12,232 | (9)% | | Gross Profit | 3,668 | 4,047 | (9)% | | Selling, General and Administrative Expense | 1,307 | 1,176 | 11% | | Other Income (Expenses), net | 263 | 45 | 484% | | Operating Profit | 2,624 | 2,916 | (10)% | | EBITDA | 3,165 | 3,413 | (7)% | | Net income | 304 | 5,435 | (94)% | | Sales Outside Mexico | 6,573 | 7,287 | (10)% | | Sales in Mexico | 8,262 | 8,992 | (8)% | | Total Sales (Thousand Tons) | 901 | 1,015 | (11)% | Quarterly Comparative Data Quarterly Financial Performance (Q2 2025 vs. Q1 2025 vs. Q2 2024) | (Ps. million) | 2Q'25 | 1Q '25 | 2Q '24 | 2Q´25 vs 1Q´25 | 2Q´25 vs 2Q ´24 | | :-------------------------------- | :---- | :----- | :----- | :------------- | :------------- | | Sales | 7,052 | 7,783 | 8,394 | (9)% | (16)% | | Cost of Sales | 5,381 | 5,786 | 6,356 | (7)% | (15)% | | Gross Profit | 1,671 | 1,997 | 2,038 | (16)% | (18)% | | Selling, General and Adm. Expenses | 674 | 633 | 580 | 6% | 16% | | Other Income (Expenses), net | 201 | 62 | 40 | 224% | 403% | | Operating Profit | 1,198 | 1,426 | 1,498 | (16)% | (20)% | | EBITDA | 1,473 | 1,692 | 1,747 | (13)% | (16)% | | Net Income | (1,000)| 1,305 | 3,979 | N/C | N/C | | Sales Outside Mexico | 3,104 | 3,469 | 3,593 | (11)% | (14)% | | Sales in Mexico | 3,948 | 4,314 | 4,801 | (8)% | (18)% | | Total Sales (Thousand Tons) | 425 | 476 | 536 | (11)% | (21)% | Product Sales Data Product Sales Data (Jan-Jun 2025 vs. Jan-Jun 2024) | Product | Thousands of Tons Jan-Jun 2025 | Ps. million Jan-Jun 2025 | Average Price per Ton Jan-Jun 2025 | Thousands of Tons Jan-Jun 2024 | Ps. million Jan-Jun 2024 | Average Price per Ton Jan-Jun 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | | Commercial Long Steel | 642 | 9,503 | 14,802 | 744 | 11,191 | 15,042 | | Special Bar Quality SBQ | 259 | 5,332 | 20,587 | 271 | 5,088 | 18,775 | | Total | 901 | 14,835 | 16,465 | 1,015 | 16,279 | 16,038 | Product Sales Data (Q2 2025 vs. Q1 2025 vs. Q2 2024) | Product | Thousands of Tons Apr-Jun 2025 | Ps. million Apr-Jun 2025 | Average Price per Ton Apr-Jun 2025 | Thousands of Tons Jan-Mar 2025 | Ps. million Jan-Mar 2025 | Average Price per Ton Jan-Mar 2025 | Thousands of Tons Apr-Jun 2024 | Ps. million Apr-Jun 2024 | Average Price per Ton Apr-Jun 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | :----------------------------- | :----------------------------- | :--------------------------------- | | Commercial Long Steel | 319 | 4,855 | 15,219 | 360 | 5,374 | 14,928 | 392 | 5,756 | 14,684 | | Special Bar Quality SBQ | 106 | 2,197 | 20,726 | 116 | 2,409 | 20,767 | 144 | 2,638 | 18,319 | | Total | 425 | 7,052 | 16,593 | 476 | 7,783 | 16,351 | 536 | 8,394 | 15,660 | Financial Statements Statements of Financial Position As of June 30, 2025, Grupo Simec's total assets decreased slightly to Ps. 71.3 billion from Ps. 73.3 billion at the previous year-end, mainly driven by a decrease in cash and cash equivalents and a reduction in total current liabilities, while total equity saw a modest increase Statements of Financial Position (As of June 30, 2025 vs. December 31, 2024) | Account | Ending Current Quarter (Ps. thousand) | Ending Previous Year (Ps. thousand) | | :-------------------------- | :------------------------------------ | :---------------------------------- | | TOTAL ASSETS | 71,297,240 | 73,298,400 | | TOTAL CURRENT ASSETS | 46,475,998 | 48,376,308 | | CASH AND CASH EQUIVALENTS | 27,503,193 | 29,158,227 | | TRADE RECEIVABLES, NET | 4,469,275 | 4,491,623 | | INVENTORIES | 10,740,555 | 11,164,370 | | TOTAL NON-CURRENT ASSETS | 24,821,242 | 24,922,092 | | PROPERTY, PLANT AND EQUIPMENT, NET | 20,380,573 | 19,630,424 | | TOTAL LIABILITIES | 11,639,174 | 14,056,389 | | TOTAL CURRENT LIABILITIES | 7,779,592 | 10,199,924 | | TRADE PAYABLES | 2,843,348 | 4,166,934 | | TOTAL NON-CURRENT LIABILITIES | 3,859,582 | 3,856,465 | | DEFERRED TAX LIABILITIES | 3,686,944 | 3,668,882 | | TOTAL EQUITY | 59,658,066 | 59,242,011 | | RETAINED EARNINGS | 52,872,672 | 42,384,854 | | NET INCOME FOR THE PERIOD | 304,297 | 10,487,818 | Informational Data (As of June 30, 2025 vs. December 31, 2024) | Informational data | Ending Current Quarter (Ps. thousand) | Ending Previous Year (Ps. thousand) | | :------------------------- | :--------------------- | :------------------- | | SHORT-TERM FOREIGN CURRENCY LIABILITIES | 3,962,931 | 3,962,931 | | LONG-TERM FOREIGN CURRENCY LIABILITIES | 488,242 | 488,242 | | OUTSTANDING SHARES (+) | 497,709,214 | 497,709,214 | | REPURCHASED SHARES (+) | 37,080,000 | 36,716,000 | Statements of Comprehensive Income Grupo Simec's Statements of Comprehensive Income show a significant decline in profitability for both the accumulated six-month period and the second quarter of 2025 compared to the previous year. Net profit attributable to owners of parent decreased by 94% for the six-month period and shifted to a net loss for Q2 2025, primarily due to a substantial increase in finance costs driven by exchange losses Statements of Comprehensive Income (Current Year vs. Previous Year) | (Ps. thousand) | CURRENT YEAR ACCUMULATED | CURRENT YEAR QUARTER | PREVIOUS YEAR ACCUMULATED | PREVIOUS YEAR QUARTER | | :-------------------------------- | :----------------------- | :------------------- | :------------------------ | :-------------------- | | REVENUE | 14,834,750 | 7,052,139 | 16,278,981 | 8,393,523 | | COST OF SALES | 11,166,978 | 5,380,759 | 12,232,354 | 6,355,950 | | GROSS PROFIT | 3,667,772 | 1,671,380 | 4,046,627 | 2,037,573 | | GENERAL EXPENSES | 1,307,231 | 674,588 | 1,175,723 | 580,767 | | OPERATING PROFIT (LOSS) (*) | 2,624,316 | 1,198,262 | 2,916,183 | 1,497,562 | | FINANCE INCOME (COSTS), NET | (1,845,243) | (1,902,227) | 2,808,859 | 2,661,834 | | PROFIT (LOSS) BEFORE INCOME TAX | 779,073 | (703,965) | 5,725,042 | 4,159,396 | | INCOME TAX EXPENSE | 475,882 | 296,882 | 290,908 | 180,777 | | NET PROFIT (LOSS) | 303,191 | (1,000,847) | 5,434,134 | 3,978,619 | | PROFIT (LOSS) ATTRIBUTABLE TO OWNERS OF PARENT | 304,297 | (1,000,380) | 5,435,369 | 3,979,068 | | BASIC EARNINGS (LOSS) PER SHARE | 0.61 | (2.01) | 10.92 | 7.99 | Other Comprehensive Income (Net of Income Tax) | OTHER COMPREHENSIVE INCOME (NET OF INCOME TAX) | CURRENT YEAR ACCUMULATED | CURRENT YEAR QUARTER | PREVIOUS YEAR ACCUMULATED | PREVIOUS YEAR QUARTER | | :--------------------------------------------- | :----------------------- | :------------------- | :------------------------ | :-------------------- | | NET PROFIT (LOSS) | 303,191 | (1,000,847) | 5,434,134 | 3,978,619 | | FOREING CURRENCY TRANSLATION | 69,281 | (1,249,693) | (520,854) | (374,527) | | TOTAL OTHER COMPREHENSIVE INCOME | 177,809 | (1,249,693) | (520,854) | (374,527) | | TOTAL COMPREHENSIVE INCOME | 481,000 | (2,250,540) | 4,913,280 | 3,604,092 | | COMPREHENSIVE INCOME, ATTRIBUTABLE TO OWNERS OF PARENT | 483,926 | (2,248,365) | 4,913,527 | 3,603,250 | Informative Data (12 Months) | Informative data (12 Months) | CURRENT YEAR (Ps. thousand) | PREVIOUS YEAR (Ps. thousand) | | :--------------------------- | :-------------------------- | :--------------------------- | | REVENUE NET () | 32,213,441 | 34,471,254 | | OPERATING PROFIT (LOSS) () | 5,009,225 | 5,875,359 | | PROFIT (LOSS) ATTRIBUTABLE TO OWNERS OF PARENT() | 5,323,913 | 7,845,669 | | NET PROFIT (LOSS) () | 5,331,107 | 7,851,660 | Statements of Cash Flows For the first half of 2025, Grupo Simec reported a net decrease in cash and cash equivalents of Ps. 1,657,182 thousand, a significant reversal from a net increase of Ps. 4,312,878 thousand in the previous year, primarily driven by negative cash flows from operating activities and continued investment in property, plant, and equipment Statements of Cash Flows (Current Year vs. Previous Year) | (Ps. thousand) | CURRENT YEAR | PREVIOUS YEAR | | :-------------------------------- | :----------- | :------------ | | PROFIT (LOSS) BEFORE INCOME TAX | 779,073 | 5,725,042 | | DEPRECIATION AND AMORTISATION FOR THE PERIOD | 541,487 | 497,198 | | NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES | (1,528,152) | 3,936,799 | | NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES | (10,967) | (210,590) | | (-) INVESTMENT IN PROPERTY, PLANT AND EQUIPMENT | (1,377,247) | (725,205) | | NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | (118,063) | 165,489 | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,657,182) | 4,312,878 | | CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 29,158,227 | 23,584,335 | | CASH AND CASH EQUIVALENTS AT END OF PERIOD | 27,503,193 | 27,965,651 | Statements of Changes in Equity Grupo Simec's total equity increased slightly to Ps. 59,658,066 thousand as of June 30, 2025, from Ps. 59,242,011 thousand at January 1, 2025, primarily driven by retained earnings and other comprehensive income, despite share repurchases Statements of Changes in Equity (As of June 30, 2025) | (Ps. thousand) | CAPITAL STOCK | SHARES REPURCHASED | PREMIUM ON ISSUANCE OF SHARES | RETAINED EARNINGS (ACCUMULATED LOSSES) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | EQUITY ATTRIBUTABLE TO OWNERS OF PARENT | NON-CONTROLLING INTERESTS | TOTAL EQUITY | | :-------------------------------- | :------------ | :----------------- | :---------------------------- | :------------------------------------- | :-------------------------------------------- | :-------------------------------------- | :------------------------ | :----------- | | BALANCE AT 1 JANUARY 2025 | 2,832,268 | 4,481,816 | 4,575,233 | 52,872,672 | (3,556,863) | 59,213,787 | 28,224 | 59,242,011 | | REPURCHASE OF SHARES | | 64,945 | | | | (64,945) | | (64,945) | | (DECREASE) INCREASE IN NON-CONTROLLING INTERESTS | | | | | 71,101 | 71,101 | (1,820) | 69,281 | | COMPREHENSIVE INCOME | | | | 304,297 | | 304,297 | (1,106) | 303,191 | | BALANCE AT 30 JUNE 2024 | 2,832,268 | 4,546,761 | 4,575,233 | 53,176,969 | (3,485,762) | 59,632,768 | 25,298 | 59,658,066 | Notes to Financial Statements Nature of Business and Relevant Events Grupo Simec, S.A.B. de C.V. and its subsidiaries primarily engage in the manufacture and sale of special bar quality (SBQ) commercial and structural steel products for the automotive and construction industries across Mexico, the United States, and Canada. The Company is a subsidiary of Industrias CH, S.A.B. de C.V - Grupo Simec's principal activities are the manufacture and sale of SBQ commercial and profiles structural steel products for the automotive and construction industries in Mexico, USA, and Canada[56] - The Company is a subsidiary of Industrias CH, S.A.B. de C.V[56] Basis of Preparation The consolidated financial statements are prepared in accordance with IAS 34 (interim financial information) and IFRS 1 (first-time adoption), consistent with policies applied at December 31, 2024. They are based on historical cost, except for certain fair-valued financial instruments, and include entities controlled by the Company, with intercompany transactions eliminated - Consolidated financial statements are interim, unaudited, and prepared according to IAS 34 and IFRS 1, consistent with policies applied at December 31, 2024[57][58] - Statements are prepared on the historical cost basis, except for certain financial instruments valued at fair value[60] - Consolidated financial statements include Grupo Simec and entities controlled by the company, with all intercompany transactions, balances, income, and expenses eliminated[59][60] Consolidated Financial Statements - The consolidated financial statements are interim, unaudited, and prepared according to IAS 34, as part of the first consolidated financial statement under IFRS issued for the year ended December 31, 2012, adopting IFRS 1[57] - The accounting policies applied are consistent with those used for the consolidated financial statements at December 31, 2024[58] Historic Cost - Consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments valued at fair value[60] Consolidated Base - Consolidated financial statements include Grupo Simec and entities controlled by the company, where control is defined as the power to govern financial and operating policies to obtain benefits[60] - Business acquisitions are recorded using the purchase method, with identifiable assets and liabilities recognized at fair value at the acquisition date[64][65] - Goodwill is recognized as an asset at the acquisition date, valued as the excess of consideration paid over the fair value of acquired net identifiable assets and liabilities[67] Subsidiaries Included in Consolidation Subsidiaries Included in Consolidation (2025 vs. 2024) | Subsidiaries established in Mexico | Percentage of equity owned 2025 | Percentage of equity owned 2024 | | :--------------------------------- | :------------------------------ | :------------------------------ | | Compañía Siderúrgica de Guadalajara, S.A. de C.V. | 99.99% | 99.99% | | Arrendadora Simec, S.A. de C.V. | 100.00% | 100.00% | | Simec International, S.A. de C.V. | 100.00% | 100.00% | | Compañía Siderúrgica del Pacífico, S.A. de C.V. | 99.99% | 99.99% | | ... (partial list) | ... | ... | | Republic Steel(5) | 99.41% | 99.41% | | GV do Brasil Industria e Comercio de Aco LTDA (7) | 99.99% | 99.99% | - The list includes numerous subsidiaries in Mexico, the United States (e.g., Republic Steel, Pacific Steel, Simec USA, Corp.), Curacao (Undershaft Investments, NV.), and Brazil (GV do Brasil Industria e Comercio de Aco LTDA, Companhia Siderúrgica do Espirito Santo S.A.), with ownership percentages mostly at 99.99% or 100%[75] Summary of Significant Accounting Policies This section outlines Grupo Simec's key accounting policies, including the conversion of foreign subsidiary financial statements using IAS 21, valuation of cash and equivalents, provisions for doubtful accounts and slow-moving inventory, depreciation of property, plant and equipment, and the accounting treatment for leases, borrowing costs, intangible assets, goodwill, impairment, provisions, retirement benefits, income per share, income taxes, foreign currency transactions, financial instruments, derivative financial instruments, and revenue recognition - The functional and reporting currency of the Company is the Mexican peso, with foreign subsidiaries' financial statements translated according to IAS 21[78] - Inventories are recorded at the lower of acquisition/production cost and market/net realizable value, using the average cost method, with a reserve for slow-moving inventory[83][85] - The Company uses derivative financial instruments (natural gas swaps) to manage exposure to natural gas price fluctuations, recognizing effective portions of fair value changes in other comprehensive income[129][130][133] Conversion of Financial Statements of Foreign Subsidiaries - The functional and reporting currency of the Company is the Mexican peso. Financial statements of foreign subsidiaries are translated to Mexican pesos in accordance with IAS 21, 'The Effects of Changes in Foreign Exchange Rates'[78] - The U.S. dollar is the functional currency for U.S. subsidiaries, and the Brazilian real for GV do Brasil. Assets and liabilities are translated at the balance sheet date exchange rate, while equity, revenues, costs, and expenses use historical rates[79][81] Exchange Rate (Mexican pesos per one U.S. dollar) | Exchange Rate (Mexican pesos per one U.S. dollar) | Rate | | :------------------------------------------------ | :--- | | Current exchange rate as of March 31, 2025 | 20.4003 | | Current exchange rate as of June 30, 2025 | 18.8483 | | Current exchange rate as of September 30, 2024 | 19.6697 | | Current exchange rate as of December 31, 2024 | 20.5103 | Cash and Cash Equivalents - Cash consists of non-interest-generating bank deposits. Cash equivalents are short-term fixed income investments with original maturities less than three months, stated at cost plus accrued yields, similar to fair value[82] Allowances for Doubtful Accounts - The Company records an allowance for doubtful accounts based on customer balances older than one year, those under litigation, or potential losses from non-fulfillment[82] Inventories and Cost of Sales - Inventories are recorded at the lower of acquisition/production cost and market/net realizable value, using the average cost method[83] - A reserve is created for slow-moving inventory, considering products and raw materials with turnover greater than one year[85] Property, Plant and Equipment - Property, plant and equipment are recorded at cost less impairment, depreciated using the straight-line method over their useful lives, starting when assets are ready for use[87] - Land is not depreciated. Useful lives, residual values, and depreciation methods are reviewed annually[87][88] Estimated Useful Life of Assets | Asset Category | Estimated Useful Life (Years) | | :--------------- | :---------------------------- | | Buildings | 10 to 65 | | Machinery and equipment | 5 to 40 | | Transportation equipment | 4 | | Furniture, mixtures and computer equipment | 3 to 10 | Leasing - Leases are classified as finance leases if they transfer substantially all risks and benefits of ownership, otherwise as operating leases[89] - Assets under finance leases are recognized at fair value or present value of minimum lease payments, with corresponding liabilities. Operating lease payments are expensed straight-line[90][91][92] Borrowing Cost - Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized to the cost of those assets until they are ready for use or sale[92] Intangible Assets - Intangible assets with finite useful lives are recorded at cost less accumulated amortization and impairment, amortized straight-line. Indefinite useful life intangibles are recognized at cost less impairment[94] - Internally generated intangible assets from development activities are recognized only if specific criteria demonstrating technical feasibility, intention, ability to use/sell, future economic benefits, adequate resources, and reliable expenditure valuation are met[95][99] Goodwill - Goodwill from business combinations is recognized as an asset at the acquisition date, less accumulated impairment losses[98] - Goodwill is allocated to cash-generating units and subject to annual impairment reviews, or more frequently if impairment is indicated[98] Impairment of Tangible and Intangible Assets - The Company reviews carrying amounts of tangible and intangible assets annually for impairment indications. If indicated, the recoverable amount (higher of fair value less cost to sell and value in use) is calculated[103] - Impairment losses are recognized immediately in profit or loss, unless the asset is carried at a revalued amount. Reversals are also recognized in profit or loss, up to the amount that would have been if no impairment was recognized[103] Provisions - Provisions are recognized when the Company has a present legal or assumed obligation from past events, it is probable that the obligation will be settled, and the amount can be reliably estimated[103] - The recognized amount is the best estimate of the expenditure required, considering risks and uncertainties, and is discounted to present value if cash flows are estimated[100] Cost of Retirement Benefits - Contributions to defined contribution plans are expensed when services are rendered. Defined benefit plan costs are determined using the projected unit credit method with actuarial valuations[101] Income Per Share - Earnings per share are calculated by dividing net income controlling interest by the weighted average of common shares outstanding[102] Income Taxes - Income tax expense is the sum of current and deferred income tax. Current tax is based on fiscal profits, and deferred tax is recognized on temporary differences using the liability method[104][105] - Deferred tax assets are recognized if future taxable profits are probable, and their carrying value is reviewed annually[105][106] - Current and deferred taxes are recognized in profit or loss, unless related to items recognized in other comprehensive income or directly in equity[110] Foreign Currency Transaction - Transactions in foreign currencies are recorded using exchange rates at transaction dates. Monetary items in foreign currency are converted at period-end exchange rates[112] - Exchange rate differences are recognized in the income statement, with exceptions for certain loans related to assets under construction, hedging transactions, and foreign operation investments[114][118] Financial Instruments (Assets and Liabilities) - Financial assets are classified as 'financial assets at fair value through income', 'preserved at maturity investment', 'financial assets available for sale', and 'loans and charge receivable'[114] - The Company has no financial assets classified as 'financial assets at fair value through income', 'preserved at maturity investments' or 'financial assets available for sale'. Loans and receivables are stated at amortized cost less impairment[115] - Financial liabilities are classified as 'financial liabilities at fair value through income' or 'other financial liabilities', with the latter valued at fair value net of transaction costs and amortized using the effective interest rate method[125][127][128] Derivative Financial Instruments - The Company uses derivative financial instruments, specifically natural gas swaps, to manage exposure to natural gas price risk for production[129][130] - Derivatives are initially recognized at fair value and remeasured at fair value at period-end. Effective portions of cash flow hedges are recognized in other comprehensive income[129][133] - Hedge accounting is discontinued if the hedging relationship is reversed, the instrument expires/is sold, or no longer meets effectiveness criteria (80%-125% compensation)[133][135] Revenue Recognition - Revenue is recognized when the risks and benefits of inventories are transferred to the customer, typically coinciding with product delivery[137] - Net sales represent goods sold at list price, less returns and discounts[137] Segments Information - Segment information is presented based on region and operational business, aligning with management's decision-making information[137] Earnings (Loss) Per Share - Earnings per share are calculated by dividing controlling net income or loss by the weighted average shares outstanding during each year presented[136][137] Supplementary Information Investments in Associates and Joint Ventures The report lists numerous subsidiaries and associated companies, primarily involved in steel manufacturing, sales, and related services across Mexico, the US, and Brazil. However, the provided table indicates zero acquisition cost and current value for all listed investments, suggesting these are fully consolidated subsidiaries rather than equity-accounted associates/joint ventures Investments in Associates and Joint Ventures | COMPANY NAME | PRINCIPAL ACTIVITY | NUMBER OF SHARES | % OWNERSHIP | ACQUISITION COST | CURRENT VALUE | | :-------------------------------- | :----------------------------------- | :--------------- | :---------- | :--------------- | :------------ | | SIMEC INTERNATIONAL | FABRICACION Y VENTA DE PROD. DE ACERO | 0 | 99.99 | 0 | 0 | | ARRENDADORA SIMEC | FABRICACION Y VENTA DE PROD DE ACERO | 0 | 100.00 | 0 | 0 | | PACIFIC STEEL | COMPRA VENTA DE CHATARRA | 0 | 100.00 | 0 | 0 | | ... (partial list) | ... | ... | ... | ... | ... | | TOTAL INVESTMENT IN ASSOCIATES | | | | 0 | 0 | - The table lists numerous entities with high ownership percentages (e.g., 99.99%, 100%) but shows zero acquisition cost and current value, indicating these are likely fully consolidated subsidiaries rather than equity-accounted investments[140] Breakdown of Credits Grupo Simec's credit breakdown indicates no bank loans. The only listed stock market loan is unsecured medium-term notes with a current year balance of Ps. 5,692 thousand, maturing within one year. Supplier credits are significant, with Ps. 1,013,920 thousand due within the current year and Ps. 1,829,428 thousand due in 5 years or more Breakdown of Credits (Current Year) | CREDIT TYPE / INSTITUTION | CURRENT YEAR (Ps. thousand) | UNTIL 1 YEAR (Ps. thousand) | UNTIL 5 YEAR OR MORE (Ps. thousand) | | :------------------------ | :-------------------------- | :-------------------------- | :---------------------------------- | | TOTAL BANKS | 0 | 0 | 0 | | UNSECURED MEDIUM TERM NOTES | 5,692 | 5,692 | 0 | | TOTAL SUPPLIERS | 1,013,920 | 1,013,920 | 1,829,428 | - The company has no bank loans. Its only listed stock market loan is unsecured medium-term notes totaling Ps. 5,692 thousand, due within one year[141] - Supplier credits amount to Ps. 1,013,920 thousand for the current year (within 1 year) and Ps. 1,829,428 thousand for 5 years or more[141] Monetary Foreign Currency Position Grupo Simec holds a significant net monetary asset position in foreign currency, primarily U.S. dollars, totaling Ps. 27,542,318 thousand, composed of Ps. 31,471,740 thousand in monetary assets and Ps. 3,929,422 thousand in liabilities Monetary Foreign Currency Position | FOREIGN CURRENCY POSITION | DOLLARS (Ps. thousand) | OTHER CURRENCIES (Ps. thousand) | TOTAL (Ps. thousand) | | :------------------------ | :----------------------- | :-------------------------------- | :--------------------- | | MONETARY ASSETS | 31,471,740 | 0 | 31,471,740 | | LIABILITIES | 3,929,422 | 0 | 3,929,422 | | NET BALANCE | 27,542,318 | 0 | 27,542,318 | - The Company has a net monetary foreign currency balance of Ps. 27,542,318 thousand, entirely in U.S. dollars[143] Debt Instruments and Financial Limitations Grupo Simec has outstanding 8 7/8% medium-term notes (MTNs) due in 1998, with a remaining balance of Ps. 5.7 million ($302,000 USD) as of June 30, 2025. The company is in compliance with all financial covenants related to these notes, including current assets to current liabilities, total liabilities to total assets, and operating income plus non-cash items - The remaining balance of 8 7/8% medium-term notes (MTNs) due 1998 is Ps. 5.7 million ($302,000 USD) as of June 30, 2025[30][146] Financial Limitations (Covenants) Compliance | Financial Limitation (Covenant) | Required | Actual Situation (as of June 30, 2025) | Compliance | | :-------------------------------- | :------- | :------------------------------------- | :--------- | | Current assets to current liabilities | 1.0 times or more | 5.97 times | Accomplished | | Total liabilities to total assets | Not more than 0.60 | 0.16 | Accomplished | | Operating income plus non-cash items | 2.0 times or more | 59.60 | Accomplished | Distribution of Revenue by Product For Q2 2025, Grupo Simec's total revenue was Ps. 14,834,750 thousand, with domestic sales contributing Ps. 8,261,627 thousand and foreign sales (including foreign subsidiaries) contributing Ps. 6,573,123 thousand. Commercial Profiles represent the largest product line in both domestic and foreign markets Distribution of Revenue by Product (Q2 2025) | Product Line | Sales Market | Share % Volume | Amount (Ps. thousand) | | :---------------- | :----------- | :------------- | :-------------------- | | COMMERCIAL PROFILES | DOMESTIC | 345 | 5,268,021 | | SPECIAL PROFILES | DOMESTIC | 138 | 2,993,606 | | TOTAL | DOMESTIC | 483 | 8,261,627 | | COMMERCIAL PROFILES | FOREIGN | 296 | 4,234,357 | | SPECIAL PROFILES | FOREIGN | 100 | 1,798,952 | | TOTAL | FOREIGN | 396 | 6,033,309 | | SPECIAL PROFILES | FOREIGN SUBSIDIARIES | 22 | 539,814 | | T O T A L | | 901 | 14,834,750 | - Total revenue for Q2 2025 was Ps. 14,834,750 thousand, with domestic sales accounting for Ps. 8,261,627 thousand and foreign sales (including foreign subsidiaries) for Ps. 6,573,123 thousand[147] - Commercial Profiles are the largest revenue contributor in both domestic (Ps. 5,268,021 thousand) and foreign (Ps. 4,234,357 thousand) markets[147] Analysis of Paid Capital Stock Grupo Simec's total capital stock consists of 497,709,214 shares, comprising 90,850,050 fixed portion shares and 406,859,164 variable portion shares. The total capital social is Ps. 2,420,230 thousand (Ps. 441,786 thousand fixed and Ps. 1,978,444 thousand variable) Analysis of Paid Capital Stock | Characteristic | Fixed Portion | Variable Portion | Total | | :--------------- | :------------ | :--------------- | :---- | | Number of Shares | 90,850,050 | 406,859,164 | 497,709,214 | | Capital Social (Ps. thousand) | 441,786 | 1,978,444 | 2,420,230 | | Total Number of Shares Representing the Capital Stock | | | 497,709,214 | - The total number of shares representing the capital stock is 497,709,214[147]