Grupo Simec(SIM) - 2023 Q1 - Quarterly Report

Financial Performance - Net sales decreased by 1% from Ps. 55,620 million in 2021 to Ps. 55,112 million in 2022, with shipments of finished steel products down 10% to 2.255 million tons[2]. - Cost of sales increased by 2% from Ps. 39,968 million in 2021 to Ps. 40,753 million in 2022, representing 74% of net sales in 2022 compared to 72% in 2021[3]. - Gross profit decreased from Ps. 15,652 million in 2021 to Ps. 14,359 million in 2022, with gross profit as a percentage of net sales dropping from 28% to 26%[4]. - Operating income fell by 11% from Ps. 13,532 million in 2021 to Ps. 12,045 million in 2022, representing 22% of net sales in 2022 compared to 24% in 2021[7]. - EBITDA decreased by 11% from Ps. 14,707 million in 2021 to Ps. 13,162 million in 2022[8]. - Net income decreased by 9% from Ps. 9,444 million in 2021 to Ps. 8,639 million in 2022[12]. - Selling, general and administrative expenses increased by 18% from Ps. 2,043 million in 2021 to Ps. 2,401 million in 2022[5]. - Total sales for the year 2022 were Ps. 55,112 million, a decline of 1% from Ps. 55,620 million in 2021[41]. - Gross profit for the year 2022 decreased by 8% to Ps. 14,359 million from Ps. 15,652 million in 2021[41]. - Net profit for the current year amounted to 8,639,334 thousand pesos, a decline of 8.5% from 9,444,208 thousand pesos in the previous year[47]. - Operating profit for the current year was 12,045,036 thousand pesos, down from 13,532,122 thousand pesos in the previous year, indicating a decrease of 11.0%[48]. Sales and Market Performance - Total sales outside of Mexico decreased by 8% to Ps. 25,468 million in 2022, while total sales in Mexico increased by 6% to Ps. 29,644 million[2]. - Total income for Grupo Simec in Q4 2022 reached Ps. 55,620,356 thousand, with domestic sales contributing Ps. 28,044,620 thousand and foreign sales contributing Ps. 19,072,122 thousand[150]. - Sales outside Mexico for Q4 2022 were Ps. 4,657 million, a decrease of 26% compared to Ps. 6,279 million in Q4 2021[41]. - Grupo Simec's commercial profiles accounted for 18,723,229 thousand in domestic sales volume, while special profiles contributed 9,321,391 thousand[150]. - Foreign subsidiaries generated Ps. 8,503,614 thousand in sales from special profiles[150]. Cash Flow and Assets - Cash and cash equivalents rose to Ps. 23,343,154 thousand in Q4 2022, up from Ps. 15,130,192 thousand in Q4 2021[44]. - Net cash flows from operating activities increased to 11,118,962 thousand pesos, compared to 8,387,332 thousand pesos in the previous year, representing a 32.6% increase[51]. - Cash flows from investing activities showed a net outflow of 2,286,967 thousand pesos, significantly higher than the previous year's outflow of 1,009,673 thousand pesos[51]. - Total assets increased to Ps. 67,439,536 thousand in Q4 2022 from Ps. 57,342,572 thousand in the previous year[44]. - The company reported a net increase in cash and cash equivalents of 8,685,514 thousand pesos for the current year, compared to an increase of 7,215,717 thousand pesos in the previous year[51]. Equity and Liabilities - Total equity increased to 48,175,412 thousand pesos, up from 41,962,528 thousand pesos in the previous year, representing a growth of 14.5%[47]. - Total non-current liabilities were reported at 4,395,389 thousand pesos, slightly down from 4,480,580 thousand pesos in the previous year[46]. - The company reported no current liabilities with cost, indicating a favorable financial position[147]. - The total investment in associates is reported as zero, indicating no current financial investment in these entities[141]. Employee and Shareholder Information - The number of employees decreased to 1,850 from 1,890 in the previous year, reflecting a reduction of 2.1%[46]. - The company repurchased 35,573,326 shares, an increase from 35,128,483 shares in the previous year[46]. - The total number of shares representing the capital stock is 497,709,214[151]. - The nominal value of the shares is set at 0 Mexican pesos[151]. - The total amount of capital stock is 1,978,444 Mexican pesos[151]. Financial Reporting and Compliance - The company continues to adopt IFRS standards for its financial reporting, ensuring compliance and transparency in its financial statements[59]. - 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[81]. - Current income tax is based on fiscal profits and cash flows, with liabilities computed using enacted tax rates[101]. - Deferred tax assets are recognized for deductible temporary differences, provided future taxable profits are probable[102]. Risk Management and Derivatives - The company utilizes derivative financial instruments to manage exposure to natural gas price fluctuations, which are critical for production[130]. - Derivative contracts are initially recognized at fair value and subsequently remeasured at fair value at the end of the reporting period[130]. - Gains and losses on ineffective portions of hedging instruments are recognized immediately in income[133]. - The effective portion of changes in fair value of derivatives designated as cash flow hedges is recognized in other comprehensive income[133].