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Operating Income
Operating income decreased 33% to Ps. 4,440 million for the first nine months of 2024 compared to Ps. 6,676 million in the first nine months of 2023. Operating income as percentage of net sales was 18% in the first nine months of 2024 and 21% in the same period of 2023. The decrease in operating income is due to a lower average sales price and to a lower volume shipped during the nine months ended September 30, 2024 compared to the same period in 2023.

Ebitda
The Ebitda decreased 31%, from Ps. 7,499 million in the first nine months of 2023 as a result of a net income of Ps. 3,821 million, less minority stake of Ps. 4 million, plus income taxes of Ps. 1,541 million, plus comprehensive financial cost of Ps. 1,318 million, plus depreciation of Ps. 823 million to Ps 5,189 million in the same period of 2024 as a result of a net income of Ps. 8,587 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 762 million, less comprehensive financial cost of Ps. 4,907 million, plus depreciation of Ps. 749 million.

Comprehensive Financial Cost
Comprehensive financial cost for the first nine months of 2024 represented an income of Ps. 4,907 million compared with an expense of Ps. 1,318 million for the first nine months of 2023. The net interest income was of Ps. 1,066 million for the first nine months of 2024, compared with a net interest income of Ps. 392 million in the same period of 2023. Likewise, we record an exchange income of Ps. 3,799 million in the first nine months of 2024 compared with an exchange loss of Ps. 1,754 million in the first nine months of 2023, and other financial income for Ps 42 million for the first nine months of 2024, dividends earned on purchase of shares, compared with other financial income for Ps. 44 million in the same period of the previous year.

Income Taxes
The Company recorded an expense of Ps.762 million for during the first nine months of 2024, (includes a deferred income tax of Ps. 88 million) compared with an expense of Ps. 1,541 million for the first nine months of 2023 (includes a deferred income tax of Ps. 8 million).

Net Income
As a result of the foregoing, the Company recorded a increase in net income of 125% to pass of Ps. 3,821 million in the first nine months of 2023 to Ps. 8,587 million of the same periods of 2024.

Liquidity and Capital Resources
At September 30, 2024, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.9 million (accrued interest on September 30, 2024 was U.S. $ 985,000, or Ps. 16.4 million).  At September 30, 2023, Simec's total consolidated debt consisted of U.S. $ 302,000 of 8 7/8% medium-term notes ("MTN's") due 1998, or Ps. 5.3 million (accrued interest on September 30, 2023 was U.S. $ 806,000, or Ps. 14.2 million).

Comparative third quarter of 2024 vs. second quarter of 2024

Net Sales
Net sales of the Company increased to pass of Ps. 8,394 million during the second quarter of 2024 to Ps. 8,549 million in the third quarter of 2024. Shipments of finished steel products decreased to 521 thousand tons in the third quarter of 2024 from 536 thousand tons in the second quarter of the same year. Total sales outside of Mexico in the third quarter of 2024 increased 3% to get to Ps. 3,593 million compared to Ps. 3,691 million of the second quarter of the same year. Mexican sales in the third quarter of 2024 increased to Ps. 4,858 million compared to Ps. 4,801 million in the second quarter of the same year. The average selling price increased 5% in the third quarter of 2024 compared to the second quarter of the same year.

Cost of Sales
Cost of sales increased to P s. 6,393 million in the third quarter of 2024 from Ps.6,356 million in the second quarter of 2024. Cost of sales as a percentage of net sales represented 75% in the third quarter of 2024 and 76% in the second quarter of the same year. The cost of sales increase 3% in the third quarter of 2024 compared to the second quarter of the same year, due mainly to a decrease of some supplies for the manufacture of steel.

Gross Profit
Gross profit of the Company for the third quarter of 2024 increased 6% to pass of Ps. 2,038 million in the second quarter of 2024 to Ps. 2,156 million in the third quarter of same year. Gross profit as a percentage of net sales in the third quarter of 2024 was of 25% compared to 24% in the second quarter of the same year. The increased in the gross profit is due to increase in the average price in the third quarter compared to the second quarter of 2024.

General, Selling and Administrative Expenses
Selling, general and administrative expenses increased 13% to of Ps. 658 million in the third quarter of 2024 from Ps. 580 million the second quarter of the same year, and as percentage of net sales represented 8% for the third quarter of 2024 compared to 7% for the second quarter of the same year.

Other (Expenses) Income, net 
The Company recorded other income net for Ps. 26 million during the third quarter of 2024 compared to other income net for Ps. 40 million in the second quarter of 2024.

Operating Income
The Operating income was of Ps. 1,524 million in the third quarter of 2024 compared to Ps. 1,498 million in the second quarter of the same year. Operating income as percentage of net sales represented 18% for the third quarter of 2024 and for the second quarter of 2024.

Ebitda
The Ebitda show a increase of 2%, to pass of Ps 1,747 million in the second quarter of 2024 as a result of a net income of Ps. 3.979 million, plus income taxes of Ps. 181 million, less comprehensive financial cost of Ps. 2,662 million, plus depreciation of Ps. 249 million to Ps. 1,776 million in the third quarter of the same year as a result of a net income of Ps. 3,152 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 471 million, less comprehensive financial cost of Ps. 2,098 million, plus depreciation of Ps. 252 million.

Comprehensive Financial Cost
Comprehensive financial cost of the Company in the third quarter of 2024 represented an income of Ps. 2,098 million compared with an income of Ps. 2,662 million for the second quarter of 2024. The comprehensive financial cost is comprised for the net interest income of Ps. 329 million in the third quarter of 2024 compared to net interest income of 487 million in the second quarter of the same year. Also, we record a net exchange income of Ps. 1,769 million in the third quarter of 2024 compared a net exchange income of Ps. 2,133 million in the second quarter of the same year, and other financial income for Ps 42 million in the second quarter of 2023, dividends earned on purchase of shares.

Income Taxes
The Company have been recorded Ps. 471 million of expense tax during the third quarter of 2024, (includes a deferred expense tax of Ps. 33 million) compared with the Ps. 181 million of expense for the second quarter of the same year, (includes a deferred income tax of Ps. 113 million).

Net Income
As a result of the foregoing, the Company recorded a net income of Ps. 3,152 million in the third quarter of 2024 compared to a net income of Ps. 3,979 million for the second quarter of 2024.

Comparative third quarter of 2024 vs. third quarter of 2023

Net Sales
Net sales of the Company decreased 10% from Ps. 9,454 million during the third quarter of 2023 to Ps. 8,549 million in the third quarter of 2024. Sales in tons of finished steel decreased to 521 thousand tons in the third quarter of 2024 from 531 thousand tons in the third quarter of 2023. Sales outside of Mexico decreased 6% from Ps. 3,932 million in the third quarter of 2023 to Ps. 3,691 million in the third quarter of 2024. Mexican sales decreased 12% from Ps. 5,522 million in the third quarter of 2023 to Ps. 4,858 million in the third quarter of 2024. The average sales price decreased approximately 8% in the third quarter of 2024, compared to the same period of 2023.

 Cost of Sales
Cost of sales decreased 11% in the third quarter of 2024 compared to the third quarter of 2023 from Ps. 7,177 million in the third quarter of 2023 to Ps. 6,393 million in the third quarter of 2024. With respect to sales, the cost of sales of the third quarter of 2023 represented 76% compared to 75% for the third quarter of 2024. The average cost of raw materials used to produce steel products decreased in 9%, due to a decrease of raw materials prices, mainly steel scrap.

Gross (Loss) Profit
Gross profit of the Company for the third quarter of 2024 decreased 5% from Ps. 2,277 million in the third quarter of 2023 compared to Ps. 2,156 million in the third quarter of 2024. Gross profit as a percentage of net sales for the third quarter of 2024 was 25% compared to 24% of the third quarter of 2023. The decrease in gross profit originates mainly from a lower average sales price.

General, Selling and Administrative Expenses
The selling, general and administrative expenses increased 36% in the third quarter of 2024 to Ps. 658 million in the third quarter of 2024 from Ps. 485 million in the third quarter of 2023. Selling, general and administrative expense as a percentage of net sales represented 8% periods quarter 2024 compared to 5% for the third quarter of 2023.

Other Income (Expenses), net 
The company recorded other income net of Ps. 26 million in the third quarter of 2024 compared with other income net of Ps. 24 million for the third quarter of 2023.

Operating (Loss) Income
Operating income decreased from Ps. 1,816 million in the third quarter of 2023 compared to Ps. 1,524 million in the third quarter of 2024, this represents 16% of decrease between both quarters. The operating income as a percentage of net sales was 19% for the third quarter of 2023 and 18% for the third quarter of 2024. The decrease in operating profit is due to a lower average sales price and an increase in selling expenses.

Ebitda
The Ebitda of the Company decreased 15% from Ps 2,079 million in the third quarter of 2023 as a result of a net income of Ps. 1,802 million, less minority stake of Ps. 2 million, plus income taxes of Ps. 298 million, less comprehensive financial cost of Ps. 283 million, plus depreciation of Ps. 264 million to Ps. 1,776 million of the same period of 2024, as a result of a net income of Ps. 3,152 million, less minority stake of Ps. 1 million, plus income taxes of Ps. 471 million, less comprehensive financial cost of Ps. 2,098 million, plus depreciation of Ps. 252 million.

Comprehensive Financial Cost
Comprehensive financial cost of the Company for the third quarter of 2024 represented a net income of Ps. 2,098 million compared with an income of Ps. 283 million for the third quarter of 2023. The comprehensive financial cost is comprised for the net interest income of Ps. 28 million in the third quarter of 2023, compared to a net interest income of Ps. 329 million for the same period of 2024. Also record an exchange income of Ps. 255 million in the third quarter of 2023 and an exchange income of Ps. 1,769 million in the third quarter of 2024.

Income Taxes
The company recorded an expense tax for Ps. 471 million in the third quarter of 2024, (includes a deferred expense tax of Ps. 33 million) compared to an expense tax of Ps. 298 million for the third quarter of 2023, (includes an accrual of deferred income tax of Ps. 8 million).

Net Income (Loss)
As a result of the foregoing, the Company recorded a net income of Ps. 3,152 million in the third quarter of 2024 compared to a net income of Ps. 1,802 million for the same period of 2023.

Any forward-looking information contained herein is inherently subject to various risks, uncertainties and assumptions which, if incorrect, may cause actual results to vary materially from those anticipated, expected or estimated. The company assumes no obligation to update any forward-looking information contained herein.

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SOURCE Grupo Simec, S.A.B. de C.V.