GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST SIX MONTHS OF 2025

Core Insights - Grupo Simec reported a significant decline in net income, dropping 94% from Ps. 5,435 million in the first half of 2024 to Ps. 304 million in the first half of 2025, primarily due to decreased sales and shipments of finished steel products [13][40]. Sales Performance - Net sales decreased by 9% from Ps. 16,279 million in the first half of 2024 to Ps. 14,835 million in the first half of 2025, driven by an 11% reduction in shipments of finished steel products [2][40]. - Total sales outside of Mexico fell by 10% to Ps. 6,573 million, while domestic sales decreased by 8% to Ps. 8,262 million [2][40]. - In the second quarter of 2025, net sales decreased by 9% compared to the first quarter, from Ps. 7,783 million to Ps. 7,052 million [14][40]. Cost and Profitability - Cost of sales decreased by 9% from Ps. 12,232 million in the first half of 2024 to Ps. 11,167 million in the first half of 2025, maintaining a consistent percentage of 75% of net sales for both periods [3][40]. - Gross profit fell from Ps. 4,047 million in the first half of 2024 to Ps. 3,668 million in the first half of 2025, representing a gross profit margin of 25% for both periods [4][40]. - Selling, general, and administrative expenses increased by 11% from Ps. 1,176 million to Ps. 1,307 million, rising from 7% to 9% of net sales [5][40]. Operating and EBITDA Performance - Operating profit decreased by 10% from Ps. 2,916 million in the first half of 2024 to Ps. 2,624 million in the first half of 2025, with an operating margin of 18% for both periods [7][40]. - EBITDA declined by 7% from Ps. 3,413 million in the first half of 2024 to Ps. 3,165 million in the first half of 2025 [8][40]. Financial Costs and Income - Comprehensive financial costs shifted from a net income of Ps. 2,809 million in the first half of 2024 to an expense of Ps. 1,845 million in the first half of 2025, primarily due to an exchange loss of Ps. 2,332 million [11][40]. - The company recorded a net tax expense of Ps. 476 million in the first half of 2025, compared to Ps. 291 million in the same period of 2024 [12][40]. Quarterly Comparison - In the second quarter of 2025, net income turned into a loss of Ps. 1,000 million, compared to a profit of Ps. 3,979 million in the second quarter of 2024 [39][40]. - The second quarter of 2025 saw a 16% decrease in net sales compared to the same quarter in 2024, dropping from Ps. 8,394 million to Ps. 7,052 million [28][40].