Grupo Simec(SIM) - 2024 Q1 - Quarterly Report

Financial Performance - Net sales decreased by 38% from Ps. 12,825 million in Q1 2023 to Ps. 7,885 million in Q1 2024, with shipments of finished steel goods down 21%[2] - Gross profit fell by 37% from Ps. 3,207 million in Q1 2023 to Ps. 2,009 million in Q1 2024, maintaining a gross profit margin of 25% for both periods[4] - Operating income decreased by 47% from Ps. 2,678 million in Q1 2023 to Ps. 1,419 million in Q1 2024, with operating income as a percentage of net sales dropping from 21% to 18%[7] - EBITDA declined by 44% from Ps. 2,959 million in Q1 2023 to Ps. 1,668 million in Q1 2024[8] - Net income increased to Ps. 1,456 million in Q1 2024 from Ps. 1,033 million in Q1 2023, reflecting a growth of 41%[12] - Total sales outside of Mexico decreased by 29% to Ps. 3,694 million in Q1 2024 compared to Ps. 5,181 million in Q1 2023[2] - The average sales price per ton of finished steel goods decreased by 22% in Q1 2024 compared to Q1 2023[2] - 1Q'24 sales decreased by 11% compared to 4Q'23, totaling 7,885 million pesos, and decreased by 39% compared to 1Q'23[26] - Gross profit for 1Q'24 was 2,009 million pesos, down 21% from 4Q'23 and down 37% from 1Q'23[26] - Net income increased by 7% in 1Q'24, reaching 1,456 million pesos, compared to 1,365 million pesos in 4Q'23, and up 41% from 1Q'23[26] - Sales outside Mexico rose by 11% in 1Q'24, totaling 3,694 million pesos, while sales in Mexico fell by 24% to 4,191 million pesos[26] - Total sales volume in tons decreased by 11% in 1Q'24, totaling 479 thousand tons, and decreased by 21% compared to 1Q'23[26] Expenses and Costs - General, selling, and administrative expenses rose by 1% from Ps. 587 million in Q1 2023 to Ps. 595 million in Q1 2024, representing 8% of net sales[5] - Selling, general and administrative expenses decreased by 22% in 1Q'24, totaling 595 million pesos, compared to 761 million pesos in 4Q'23[26] - Cost per ton increased by 5% in 1Q'24, reaching 12,267 pesos, compared to 11,720 pesos in 4Q'23, and decreased by 23% from 15,924 pesos in 1Q'23[26] Income Taxes and Financial Costs - Income taxes recorded an expense of Ps. 110 million in Q1 2024, significantly lower than the Ps. 531 million expense in Q1 2023[11] - Comprehensive financial cost improved to a net income of Ps. 147 million in Q1 2024 from a net expense of Ps. 1,116 million in Q1 2023[10] - The company reported a significant reduction in finance costs, which fell to 103,799 thousand pesos from 1,330,552 thousand pesos in the previous year[33] Assets and Equity - Total assets reached $68.68 billion, with current assets at $45.51 billion[29] - Cash and cash equivalents amounted to $24.07 billion, reflecting a strong liquidity position[29] - Total non-current assets were reported at $23.17 billion, indicating a stable asset base[29] - The company holds net receivables of $6.39 billion, showcasing effective credit management[29] - Inventories are valued at $10.68 billion, which is crucial for operational efficiency[29] - The company has $1.40 billion in property, plant, and equipment, essential for production capabilities[29] - Goodwill stands at $1.81 billion, reflecting past acquisitions and market positioning[29] - Total equity increased to $51,308,412 from $50,022,475, reflecting a growth of approximately 2.56%[30] - Retained earnings increased to 44,056,885 thousand pesos by December 31, 2023, up from 39,134,651 thousand pesos at the end of 2022, indicating improved profitability[41] Employee and Shareholder Information - The number of employees increased to 1,404 from 1,414, showing a slight decrease of 0.7%[31] - The total number of executives increased to 55 from 52, reflecting a growth of approximately 5.8%[31] - The company repurchased 36,148,360 shares, up from 36,023,685, reflecting an increase of approximately 0.35%[31] Future Outlook and Strategic Initiatives - Future guidance indicates expected revenue growth of 10% for the next quarter, driven by new product launches[29] - The company plans to expand its market presence through strategic acquisitions in emerging markets[29] - The company continues to focus on strategic growth through potential acquisitions and market expansion in the steel industry[42] Accounting and Reporting Standards - The company operates under International Financial Reporting Standards (IFRS), ensuring transparency and consistency in financial reporting[45] - The company has maintained a consistent approach to accounting policies across its subsidiaries, ensuring alignment in financial reporting practices[44] - The company has adopted IFRS-1 for the preparation of its financial statements, ensuring compliance with international accounting standards[64] Financial Ratios and Position - The company has a total liability of 11,565,763 thousand pesos, with short-term liabilities at 11,564,499 thousand pesos[130] - Current monetary assets are reported at 30,410,707 thousand pesos[130] - The company has current assets to current liabilities ratio of 3.37 times, indicating strong liquidity[134] - Total liabilities to total assets ratio stands at 0.25, which is below the 0.60 threshold[134]