Grupo Collado, a major steel service center in Mexico, reported a 97.9% drop in third-quarter earnings, falling from $6 million to $129,200. The decrease was attributed to an 8.3% drop in sales and a steeper decline in the cost of sales.
Grupo Collado, one of Mexico's largest steel service centers, recently reported a significant drop in its earnings for the third quarter of the year. The earnings plummeted from a substantial $6 million to a meager $129,200. The company announced these numbers to the Mexican Stock Exchange (BMV).
One of the main factors behind this decline is an 8.3% drop in sales value, according to Grupo Collado. However, it's not just the sales that have suffered; the cost of sales also recorded a more drastic dip of 11.4%. Surprisingly, the gross profit rose by 2.5% to $38.9 million, despite the shrinking sales and revenues.
The sales for the July-September period also reflect the troubling trend, falling 8.3% to $155 million. Of these sales, 74.2% were made to the national market, while exports accounted for the remaining 25.8%.
When it comes to steel prices, Grupo Collado reports fluctuating trends. In the first four months of 2023, steel prices were on the rise. However, from May to September, the prices saw a downward trend. When comparing the prices of steel from January to September of this year to the same period last year, there was a 22.7% decrease.
Grupo Collado isn't just a small player in the market; it has 11 plants, 7 warehouses, and 22 sales offices across Mexico. Its substantial size and reach make these financial dips even more noteworthy and could potentially indicate a broader issue in the Mexican steel industry.
While the company has faced some financial challenges, it is also focusing on improving its market position. Despite the setbacks, Grupo Collado is still a key player in Mexico's steel industry and aims to bounce back in the coming quarters.
Looking forward, the fluctuating steel prices and overall economic volatility make it challenging to predict Grupo Collado's future performance. However, this third-quarter report certainly serves as a wakeup call not just for the company, but also for the entire steel industry in Mexico.
Grupo Collado's significant drop in third-quarter earnings, down to just $129,200, raises questions about the state of the steel industry in Mexico. Despite the bleak financial picture, the company aims to recover and adapt to market trends. The financial results are a wakeup call that requires immediate attention and action from both the company and industry stakeholders.