Grupo Simec SAB de CV announced its results of operations for the sixth month period ended June 30th 2012.

Comparative first half of 2012 vs first half of 2011

Net Sales
Net sales of the company increased 18% from MXN 13,758 million in the first half of 2011 to MXN 16,264 million in the first half of 2012. Shipments of finished steel products increased 4% from 1,139,000 tonnes in the first half of 2011 to 1,184,000 tonnes in the first half of 2012. Total sales outside of Mexico in the first half of 2012 increased 11% to MXN 8,420 million compared to MXN 7,575 million in the first half of 2011. Mexican sales increased 27% from MXN 6,183 million in the first half of 2011 to MXN 7,844 million in the first half of 2012. The increase in sales for the first half of 2012 compared to the first half of 2011, is due to the combined of better average sales price of 14% and increase in the volume of shipments approximately of 45 thousand tons that represent a 4%.

Cost of Sales
Cost of sales increased 14% from MXN 12,122 million in the first half of 2011, to MXN 13,860 million in the first half of 2012. Cost of sales as a percentage of net sales represented 85% in the first half of 2012 while in the first half of 2011 represented 88%. Cost of sales increase due to the major volume shipment and increase in certain raw materials.

Gross Profit
Gross profit of the Company for the first half of 2012 increased 47% from MXN 1,636 million in the first half of 2011, to MXN 2,404 million in the first half of 2012. Marginal profit as percentage of net sales in the first half of 2012 was of 15% while in the first half of 2011 was of 12%. The gross profit between both periods is due for better in the average sales price and major volume of shipments between both periods.

General, Selling and Administrative Expense
Selling, general and administrative expense increase 33%, from MXN 453 million in the first half of 2011 to MXN 604 million in the same period 2012, selling, general and administrative expense represented 4% of the net sales of the first half of 2012 and 3% of net sales in the first half of 2011.

Other Income (Expenses,) net
The Company recorded other expense net for MXN 8 million during the first half of 2012 while in the same period of 2011 the other expense net by this concept was of MXN 8 million.

Operating Income
Operating income increased 53% from MXN 1,175 million for the first half of 2011 compared to MXN 1,792 million in the first half of 2012. Operating income as percentage of net sales was 11% in the first half of 2012 compared to 9% in the same period of 2011. The increase in operating income is due to an increase in revenues and increase in volume of finish good shipments.

EBITDA
The EBITDA of the first half of 2012, increase in MXN 618 million or 37% compared to first half of 2011, due to a better in the average sales price and to a major volume shipments. The EBITDA passed of MXN 1,678 million of the first half of 2011 to MXN 2,296 million in the first half of 2012.

Comprehensive Financial Cost
Comprehensive financial cost for the first half of 2012 represented an expense of MXN 27 million compared with of MXN 172 million of expense for the first six half of 2011. The comprehensive financial cost is comprised by the exchange loss of MXN28 million in the first half of 2012 compared with an exchange loss of MXN 176 million in the first half of 2011. Also record a net income interest of MXN 1 million and MXN 4 million in 2012 and 2011 respectively. As of June 30th 2012 the Mexican peso record a revaluation of 2% versus dollar compared the exchange rate of Mexican peso to dollar as of December 31st 2011.

Income Taxes
The Company recorded an income of MXN 49 million for the net income tax during the first half of 2012, (comprised for a current income tax of MXN 16 million and deferred income tax of MXN 65 million) compared with an income of MXN 26 million of income tax for the first half of 2011 (comprised for a current income tax of MXN 17 million and an income for deferred income tax of MXN 43 million).

Net Income
As a result of the foregoing, the Company record an increase in net income of 94% to pass of MXN 917 million in the first half of 2011 to MXN 1,777 million of the same period of 2012.

In MXN million

Source - Grupo Simec

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