UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-11176
For the month of October , 2009.
---------------------------------------------------------
Group Simec, Inc.
--------------------------------------------------------------------------------
(Translation of Registrant's Name Into English)
Av. Lazaro Cardenas 601, Colonia la Nogalera,
Guadalajara, Jalisco, Mexico 44440
--------------------------------------------------------------------------------
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F |_|
Indicate by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1)
Yes |_| No |X|
Indicate by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7)
Yes |_| No |X|
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes |_| No |X|
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-_______________________.)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GRUPO SIMEC, S.A.B. de C.V.
--------------------------------
(Registrant)
Date: October 29, 2009. By: /s/ Luis Garcia Limon
--------------------------------
Name: Luis Garcia Limon
Title: Chief Executive Officer
[LOGO] GRUPO
SIMEC
PRESS RELEASE Contact: Sergio Vigil Gonzalez
Jose Flores Flores
Grupo Simec, S.A. de C.V.
Calzada Lazaro Cardenas 601
44440 Guadalajara, Jalisco, Mexico
52 55 1165 1025
52 33 3770 6734
GRUPO SIMEC ANNOUNCES RESULTS OF OPERATIONS FOR THE FIRST NINE MONTHS OF 2009
GUADALAJARA, MEXICO, October 28, 2009- Grupo Simec, S.A.B. de C.V. (AMEX: SIM)
("Simec") announced today its results of operations for the nine-month period
ended September 30, 2009.
Nine-Month Period Ended September 30, 2009 compared to Nine-Month Period Ended
September 30, 2008
Net Sales
Net sales decreased 48% to Ps. 14,277 million in the nine-month period ended
September 30, 2009 (including the net sales generated by the newly acquired
plants of Grupo San of Ps. 2,854 million) compared to Ps. 27,567 million in the
same period 2008 (including the net sales generated by the newly acquired plants
of Grupo San of Ps. 1,586 million). Shipments of finished steel products
decreased 35% to 1,528 thousand tons in the nine-month period ended September
30, 2009 (including the net sales generated by the newly acquired plants of
Grupo San of 386 thousand tons) compared to 2,357 thousand tons in the same
period 2008 (including the net sales generated by the newly acquired plants of
Grupo San of 144 thousand tons). Total sales outside of Mexico in the nine-month
period ended September 30, 2009 decreased 69% to Ps. 6,108 million (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 9
million) compared with Ps. 19,489 million in the same period 2008, (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 97
million) while total Mexican sales increased 1% from Ps. 8,078 million in the
nine-month period ended September 30, 2008 (including the net sales generated by
the newly acquired plants of Grupo San of Ps. 1,489 million) to Ps. 8,169
millions in the same period 2009 (including the net sales generated by the newly
acquired plants of Grupo San of Ps. 2,845 million). The decrease in sales is due
to lower shipments during the nine-month period ended September 30, 2009,
compared to the same period in 2008 (a 829,000 tons decrease). The average price
of steel products decreased 20% in the nine-month period ended September 30,
2009 compared with the same period of 2008.
Direct Cost of Sales
Direct cost of sales decreased 48% from Ps. 22,469 million in the nine-month
period ended September 30, 2008 (including the cost of sales generated by the
newly acquired plants of Grupo San of Ps. 970 million) to Ps. 11,610 million in
the same period 2009 (including the cost of sales generated by the newly
acquired plants of Grupo San of Ps. 1,912 million). Direct cost of sales as a
percentage of net sales represented 81% in the nine-month period ended September
30, 2009 compared to 82% in the same period 2008. The average cost of raw
materials used to produce steel products decreased 20% in the nine-month period
ended September 30, 2009 versus the same period 2008, primarily as a result of
decreases in the price of scrap and certain other raw materials.
Marginal Profit
Marginal profit in the nine-month period ended September 30, 2009 was Ps. 2,667
million (including the marginal profit generated by the newly acquired plants of
Grupo San of Ps. 942 million) compared to Ps. 5,098 million in the same period
2008 (including the marginal profit generated by the newly acquired plants of
Grupo San of Ps. 616 million). Marginal profit as a percentage of net sales in
the nine-month period ended September 30, 2009 was 19% compared to 18% in the
same period 2008. The decline in marginal profit is due to lower shipments of
35% during the nine-month period ended September 30, 2009 compared with the same
period of 2008.
Operating Expenses
Operating expenses increased 23% to Ps. 1,665 million in the nine-month period
ended September 30, 2009 (including the operating expenses from the newly
acquired plants of Grupo San of Ps. 331 million and the amortization of the
tangible and intangible assets of Ps. 269 million registered by the acquisition
of Grupo San) compared to Ps. 1,358 million in the same period 2008 (including
the operating expenses from the newly acquired plants of Grupo San of Ps. 202
million), and represented 12% of net sales in the nine-month period ended
September 30, 2009 and 5% of net sales in the same period 2008.
Operating Income
Operating income decreased 73% to Ps. 1,002 million for the nine-month period
ended September 30, 2009 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 342 million) compared to Ps. 3,740 million
in the same period 2008 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 414 million). Operating income as a
percentage of net sales was 7% in the nine-month period ended September 30, 2009
compared to 14% in the same period 2008. The decline in operating income is due
to lower shipments of 35% during the nine-month period ended September 30, 2009
compared with the same period of 2008.
Comprehensive Financial Cost
Comprehensive financial cost in the nine-month period ended September 30, 2009
represented an expense of Ps. 49 million compared with an expense of Ps. 233
million in the same period 2008. Net interest expense was Ps. 24 million in the
nine-month period ended September 30, 2009 compared with a net interest income
of Ps. 81 million in the same period 2008. At the same time, we registered an
exchange loss of Ps. 25 million in the nine-month period ended September 30,
2009 compared with an exchange loss of Ps. 314 million in the same period 2008,
reflecting a 0.3% increase in the value of the peso versus the dollar in the
nine-month period ended September 30, 2009 compared to the same period of 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the nine-month period
ended September 30, 2009 compared to other income net of Ps. 53 million in the
same period 2008.
Income Taxes
Income Taxes recorded a provision of Ps. 168 million in the nine-month period
ended September 30, 2009 (including the provision of Ps. 15 million of deferred
income taxes) compared to Ps. 1,209 million in the same period of 2008
(including the provision of Ps. 771 million of deferred income taxes).
Net Income
As a result of the foregoing, net income decreased by 66% to Ps. 792 million in
the nine-month period ended September 30, 2009 from Ps. 2,351 million in the
same period 2008.
Liquidity and Capital Resources
As of September 30, 2009, Simec's total consolidated debt consisted of U.S.
$302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest on
September 30, 2009 was U.S. $411,654). As of December 31, 2008, Simec's total
consolidated debt consisted of U.S. $952,000; U.S. $650,000 is a credit bank and
U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest
on December 31, 2008 was U.S. $387,882).
Comparative third quarter 2009 vs second quarter 2009
Net Sales
Net sales increased 21% from Ps. 4,161 million for the second quarter 2009 to
Ps. 5,035 million for the third quarter 2009. Sales in tons of finished steel
increased 17% to 551 thousand tons in the third quarter 2009 compared with 471
thousand tons in the second quarter 2009. The total sales outside of Mexico for
the third quarter 2009 increased 53% to Ps. 2,348 million compared with Ps.
1,538 million for the second quarter 2009. Total Mexican sales increased 2% to
Ps. 2,687 million in the third quarter 2009 from Ps. 2,623 million in the second
quarter 2009. Prices of finished products sold in the third quarter 2009
increased approximately 3% compared to the second quarter 2009.
Direct Cost of Sales
Direct cost of sales increased 30% from Ps. 3,256 million in the second quarter
2009 to Ps. 4,243 million for the third quarter 2009. With respect to sales, in
the third quarter 2009, the direct cost of sales represents 85% compared to 78%
for the second quarter 2009. The average cost of raw materials used to produce
steel products increased 12% in the third quarter 2009 versus the second quarter
2009, primarily as a result of increases in the price of scrap and certain other
raw materials.
Marginal Profit
Marginal profit for the third quarter 2009 decreased 12% to Ps. 792 million
compared to Ps. 905 million in the second quarter 2009. The marginal profit as a
percentage of net sales for the third quarter 2009 was 16% compared with 22% for
the second quarter of 2009. The decline in marginal profit is due to the
increase in the cost of raw materials used to produce steel products in the
third quarter 2009 versus the second quarter 2009.
Operating Expenses
Operating expenses decreased 1% to Ps. 537 million in the third quarter 2009
compared to Ps. 543 million for the second quarter 2009. Operating expenses as a
percentage of net sales represented 11% during the third quarter 2009 and 13%
during the second quarter 2009.
Operating Income
Operating income decreased 30% from an operating income of Ps. 362 million in
the second quarter 2009 to Ps. 255 million of operating income for the third
quarter 2009. The operating income as a percentage of net sales in the third
quarter 2009 was 5% compared to 9% in the second quarter 2009. The decrease in
operating income is due to the increase in the cost of raw materials used to
produce steel products in the third quarter 2009 versus the second quarter 2009.
Comprehensive Financial Income (Cost)
Comprehensive financial income for the third quarter 2009 represented a gain of
Ps. 12 million compared with an expense of Ps. 121 million for the second
quarter 2009. Net interest expense was Ps. 13 million in the third quarter 2009
compared with Ps. 8 million of net interest expense in the second quarter 2009.
At the same time we registered an exchange gain of Ps. 25 million in the third
quarter 2009 compared with an exchange loss of Ps. 113 million in the second
quarter 2009.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the third quarter 2009
compared with other expense net of Ps. 1 million for the second quarter 2009.
Income Taxes
Income Taxes for the third quarter 2009 was an expense of Ps. 7 million compared
to Ps. 154 million of expense for the second quarter 2009.
Net Income
As a result of the foregoing, net income was Ps. 267 million in the third
quarter 2009 compared to Ps. 86 million of net income in the second quarter
2009.
Comparative third quarter 2009 vs third quarter 2008
Net Sales
Net sales decreased 52% from Ps. 10,533 million for the third quarter 2008
(including the net sales generated by the newly acquired plants of Grupo San of
Ps. 1,073 million) to Ps. 5,035 million for the third quarter 2009 (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 955
million). Sales in tons of finished steel decreased 31% to 551 thousand tons in
the third quarter 2009 compared with 795 thousand tons in the third quarter
2008. The total sales outside of Mexico for the third quarter 2009 decreased 68%
to Ps. 2,348 million compared with Ps. 7,317 million for the third quarter 2008.
Total Mexican sales decreased 16% to Ps. 2,687 million in the third quarter 2009
from Ps. 3,216 million in the third quarter 2008. Prices of finished products
sold in the third quarter 2009 decreased approximately 31% compared to the third
quarter 2008.
Direct Cost of Sales
Direct cost of sales decreased 51% from Ps. 8,726 million in the third quarter
2008 (including the cost of sales generated by the newly acquired plants of
Grupo San of Ps. 663 million) to Ps. 4,243 million for the third quarter 2009
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 671 million). With respect to sales, in the third quarter 2009, the
direct cost of sales represents 84% compared to 83% for the third quarter 2008.
The average cost of raw materials used to produce steel products decreased 30%
in the third quarter 2009 versus the third quarter 2008, primarily as a result
of decreases in the price of scrap and certain other raw materials.
Marginal Profit
Marginal profit for the third quarter 2009 decreased 56% to Ps. 792 million
(including the marginal profit generated by the newly acquired plants of Grupo
San of Ps. 284 million) compared to Ps. 1,807 million in the third quarter 2008
(including the marginal profit generated by the newly acquired plants of Grupo
San of Ps. 410 million). The marginal profit as a percentage of net sales for
the third quarter 2009 was 16% compared with 17% for the third quarter 2008. The
decline in marginal profit is due to lower shipments of 31% during the third
quarter 2009 compared with the third quarter 2008.
Operating Expenses
Operating expenses decreased 5% to Ps. 537 million in the third quarter 2009
(including the operating expenses from the newly acquired plants of Grupo San of
Ps. 109 million and the amortization of the tangible and intangible assets of
Ps. 89 million registered by the acquisition of Grupo San) compared to Ps. 564
million for the third quarter 2008 (including the operating expenses from the
newly acquired plants of Grupo San of Ps. 149 million). Operating expenses as a
percentage of net sales represented 11% during the third quarter 2009 and 5%
during the third quarter 2008.
Operating Income
Operating income decreased 79% from an operating income of Ps. 1,243 million in
the third quarter 2008 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 261 million) to Ps. 255 million of operating
income for the third quarter 2009 (including the operating loss generated by the
newly acquired plants of Grupo San of Ps. 86 million). The operating income as a
percentage of net sales in the third quarter 2009 was 5% compared to 12% in the
third quarter 2008. The decrease in operating income is due to lower shipments
of 31% during the third quarter 2009 compared with the third quarter 2008.
Comprehensive Financial Income (Cost)
Comprehensive financial income for the third quarter 2009 represented a gain of
Ps. 12 million compared with a gain of Ps. 25 million for the third quarter
2008. Net interest expense was Ps. 13 million in the third quarter 2009 compared
with Ps. 11 million of net interest expense in the third quarter 2008. At the
same time we registered an exchange gain of Ps. 25 million in the third quarter
2009 compared with an exchange gain of Ps. 36 million in the third quarter 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the third quarter 2009
compared with other income net of Ps. 49 million for the third quarter 2008.
Income Taxes
Income Taxes for the third quarter 2009 was an expense of Ps. 7 million compared
to Ps. 483 million of income for the third quarter 2008.
Net Income
As a result of the foregoing, net income was Ps. 267 million in the third
quarter 2009 compared to Ps. 834 million of net income in the third quarter
2008.
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.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
AT SEPTEMBER 30 OF 2009 AND 2008
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
s01 TOTAL ASSETS 30,629,914 100 30,807,410 100
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s02 CURRENT ASSETS 13,425,170 44 14,099,087 46
------------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 1,709,796 6 621,529 2
------------------------------------------------------------------------------------------------------------------------
s04 ACCOUNTS AND NOTES RECEIVABLE (NET) 2,523,430 8 4,276,608 14
------------------------------------------------------------------------------------------------------------------------
s05 OTHER ACCOUNTS AND NOTES RECEIVABLE 584,230 2 712,722 2
------------------------------------------------------------------------------------------------------------------------
s06 INVENTORIES 8,371,833 27 8,281,058 27
------------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 235,881 1 207,170 1
------------------------------------------------------------------------------------------------------------------------
s08 LONG-TERM 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s09 ACCOUNTS AND NOTES RECEIVABLE (NET) 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s10 INVESTMENT IN SHARES OF NON-CONSOLIDATED
SUBSIDIARIES AND ASSOCIATES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s11 OTHER INVESTMENTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s12 PROPERTY, PLANT AND EQUIPMENT (NET) 9,931,055 32 9,505,835 31
------------------------------------------------------------------------------------------------------------------------
s13 LAND AND BUILDINGS 3,732,480 12 3,337,012 11
------------------------------------------------------------------------------------------------------------------------
s14 MACHINERY AND INDUSTRIAL EQUIPMENT 12,824,310 42 12,073,769 39
------------------------------------------------------------------------------------------------------------------------
s15 OTHER EQUIPMENT 231,272 1 231,790 1
------------------------------------------------------------------------------------------------------------------------
s16 ACCUMULATED DEPRECIATION 7,378,129 24 6,563,790 21
------------------------------------------------------------------------------------------------------------------------
s17 CONSTRUCTION IN PROGRESS 521,122 2 427,054 1
------------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 7,151,466 23 7,105,029 23
------------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 122,223 0 97,459 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s20 TOTAL LIABILITIES 8,465,596 100 10,114,717 100
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 4,165,860 49 6,212,902 61
------------------------------------------------------------------------------------------------------------------------
s22 SUPPLIERS 2,020,071 24 4,214,351 42
------------------------------------------------------------------------------------------------------------------------
s23 BANK LOANS 0 0 555,783 5
------------------------------------------------------------------------------------------------------------------------
s24 STOCK MARKET LOANS 4,078 0 3,226 0
------------------------------------------------------------------------------------------------------------------------
s103 OTHER LOANS WITH COST 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s25 TAXES PAYABLE 230,728 3 397,003 4
------------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES WITHOUT COST 1,910,983 23 1,042,539 10
------------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s28 BANK LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s29 STOCK MARKET LOANS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s30 OTHER LOANS WITH COST 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s32 OTHER NON-CURRENT LIABILITIES WITHOUT COST 4,299,736 51 3,901,815 39
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s33 CONSOLIDATED STOCKHOLDERS' EQUITY 22,164,318 100 20,692,693 100
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s34 MINORITY INTEREST 2,740,298 12 3,010,295 15
------------------------------------------------------------------------------------------------------------------------
s35 MAJORITY INTEREST 19,424,020 88 17,682,398 85
------------------------------------------------------------------------------------------------------------------------
s36 CONTRIBUTED CAPITAL 8,350,900 38 8,350,900 40
------------------------------------------------------------------------------------------------------------------------
S79 CAPITAL STOCK 4,142,696 19 4,142,696 20
------------------------------------------------------------------------------------------------------------------------
s39 PREMIUM ON ISSUANCE OF SHARES 4,208,204 19 4,208,204 20
------------------------------------------------------------------------------------------------------------------------
s40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s41 EARNED CAPITAL 11,073,120 50 9,331,498 45
------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,677,190 48 9,452,556 46
------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT 395,930 2 (121,058) 0
------------------------------------------------------------------------------------------------------------------------
s80 SHARES REPURCHASED 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
-----------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 1,709,796 100 621,529 100
-----------------------------------------------------------------------------------------------------------------------
s46 CASH 1,546,154 90 520,535 84
-----------------------------------------------------------------------------------------------------------------------
s47 SHORT-TERM INVESTMENTS 163,642 10 100,994 16
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 235,881 100 207,170 100
-----------------------------------------------------------------------------------------------------------------------
s81 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s82 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s83 OTHER 235,881 100 207,170 100
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 7,151,466 100 7,105,029 100
-----------------------------------------------------------------------------------------------------------------------
s48 DEFERRED EXPENSES 2,950,654 41 275,915 4
-----------------------------------------------------------------------------------------------------------------------
s49 GOODWILL 4,166,160 58 6,767,670 95
-----------------------------------------------------------------------------------------------------------------------
s51 OTHER 34,652 0 61,444 1
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 122,223 100 97,459 100
-----------------------------------------------------------------------------------------------------------------------
s84 INTANGIBLE ASSET FROM LABOR OBLIGATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s85 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s50 DEFERRED TAXES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s86 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s87 OTHER 122,223 100 97,459 100
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 4,165,860 100 6,212,902 100
-----------------------------------------------------------------------------------------------------------------------
s52 FOREIGN CURRENCY LIABILITIES 1,991,288 48 4,440,801 71
-----------------------------------------------------------------------------------------------------------------------
s53 MEXICAN PESOS LIABILITIES 2,174,572 52 1,772,101 29
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES WITHOUT COST 1,910,983 100 1,042,539 100
-----------------------------------------------------------------------------------------------------------------------
s88 DERIVATIVE FINANCIAL INSTRUMENTS 262,228 14 112,499 11
-----------------------------------------------------------------------------------------------------------------------
s89 INTEREST LIABILITIES 12,357 1 4,107 0
-----------------------------------------------------------------------------------------------------------------------
s68 PROVISIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s90 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s58 OTHER CURRENT LIABILITIES 1,636,398 86 925,933 89
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s59 FOREIGN CURRENCY LIABILITIES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s60 MEXICAN PESOS LIABILITIES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s65 NEGATIVE GOODWILL 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s67 OTHER 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s32 OTHER NON CURRENT LIABILITIES WITHOUT COST 4,299,736 100 3,901,815 100
-----------------------------------------------------------------------------------------------------------------------
s66 DEFERRED TAXES 4,218,856 98 3,732,267 96
-----------------------------------------------------------------------------------------------------------------------
s91 OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE 32,138 1 111,948 3
-----------------------------------------------------------------------------------------------------------------------
s92 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
s69 OTHER LIABILITIES 48,742 1 57,600 1
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
s79 CAPITAL STOCK 4,142,696 100 4,142,696 100
-----------------------------------------------------------------------------------------------------------------------
s37 CAPITAL STOCK (NOMINAL) 2,420,230 58 2,420,230 58
-----------------------------------------------------------------------------------------------------------------------
s69 RESTATEMENT OF CAPITAL STOCK 1,722,466 42 1,722,466 42
-----------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,677,190 100 9,452,556 100
------------------------------------------------------------------------------------------------------------------------
s93 LEGAL RESERVE 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s43 RESERVE FOR REPURCHASE OF SHARES 200,612 2 200,612 2
------------------------------------------------------------------------------------------------------------------------
s94 OTHER RESERVES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s95 RETAINED EARNINGS 9,307,346 87 7,511,209 79
------------------------------------------------------------------------------------------------------------------------
s45 NET INCOME FOR THE YEAR 1,169,232 11 1,740,735 18
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT 395,930 100 (121,058) 100
------------------------------------------------------------------------------------------------------------------------
s70 ACCUMULATED MONETARY RESULT 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s71 RESULT FROM HOLDING NON-MONETARY ASSETS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s96 CUMULATIVE RESULT FROM FOREIGN CURRENCY TRANSLATION 584,734 148 (45,040) 37
------------------------------------------------------------------------------------------------------------------------
s97 CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL INSTRUMENTS (188,804) (48) (76,018) 63
------------------------------------------------------------------------------------------------------------------------
s98 CUMULATIVE EFFECT OF DEFERRED INCOME TAXES 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s99 LABOR OBLIGATION ADJUSTMENT 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
s100 OTHER 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
BALANCE SHEETS
OTHER CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
------------------------------------------------------------------------------------------------------------------------
S72 WORKING CAPITAL 9,259,310 7,886,185
------------------------------------------------------------------------------------------------------------------------
S73 PENSIONS FUND AND SENIORITY PREMIUMS 0 103,501
------------------------------------------------------------------------------------------------------------------------
S74 EXECUTIVES (*) 60 60
------------------------------------------------------------------------------------------------------------------------
S75 EMPLOYERS (*) 1,638 2,070
------------------------------------------------------------------------------------------------------------------------
S76 WORKERS (*) 2,767 3,820
------------------------------------------------------------------------------------------------------------------------
S77 COMMON SHARES (*) 497,709,214 497,709,214
------------------------------------------------------------------------------------------------------------------------
S78 REPURCHASED SHARES (*) 0 0
------------------------------------------------------------------------------------------------------------------------
S101 RESTRICTED CASH 0 0
------------------------------------------------------------------------------------------------------------------------
S102 NET DEBT OF NON CONSOLIDATED COMPANIES 645,704 0
------------------------------------------------------------------------------------------------------------------------
(*) THESE ITEMS SHOULD BE EXPRESSED IN UNITS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
FROM JANUARY 1 TO SEPTEMBER 30 OF 2009 AND 2008
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
R
-----------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------
r01 NET SALES 14,277,276 100 27,567,332 100
-----------------------------------------------------------------------------------------------------------------------
r02 COST OF SALES 11,609,911 81 22,469,467 82
-----------------------------------------------------------------------------------------------------------------------
r03 GROSS PROFIT 2,667,365 19 5,097,865 18
-----------------------------------------------------------------------------------------------------------------------
r04 OPERATING EXPENSES 1,665,339 12 1,357,534 5
-----------------------------------------------------------------------------------------------------------------------
r05 OPERATING INCOME 1,002,026 7 3,740,331 14
-----------------------------------------------------------------------------------------------------------------------
r08 OTHER INCOME AND (EXPENSE), NET 7,799 0 52,951 0
-----------------------------------------------------------------------------------------------------------------------
r06 COMPREHENSIVE FINANCING RESULT (49,184) 0 (233,514) 0
-----------------------------------------------------------------------------------------------------------------------
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r48 NON ORDINARY ITEMS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r09 INCOME BEFORE INCOME TAXES 960,641 7 3,559,768 13
-----------------------------------------------------------------------------------------------------------------------
r10 INCOME TAXES 168,062 1 1,208,615 4
-----------------------------------------------------------------------------------------------------------------------
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 792,579 6 2,351,153 9
-----------------------------------------------------------------------------------------------------------------------
r14 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r18 NET CONSOLIDATED INCOME 792,579 6 2,351,153 9
-----------------------------------------------------------------------------------------------------------------------
r19 NET INCOME OF MINORITY INTEREST (376,653) (3) 610,418 2
-----------------------------------------------------------------------------------------------------------------------
r20 NET INCOME OF MAJORITY INTEREST 1,169,232 8 1,740,735 6
-----------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
-----------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------
r01 NET SALES 14,277,276 100 27,567,332 100
-----------------------------------------------------------------------------------------------------------------------
r21 DOMESTIC 8,168,694 57 8,078,531 29
-----------------------------------------------------------------------------------------------------------------------
r22 FOREIGN 6,108,582 43 19,488,801 71
-----------------------------------------------------------------------------------------------------------------------
r23 TRANSLATED INTO DOLLARS (***) 447,238 1,859,864
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
r08 OTHER INCOME AND (EXPENSE), NET 7,799 100 52,951 100
-----------------------------------------------------------------------------------------------------------------------
r49 OTHER INCOME AND (EXPENSE), NET 7,799 100 61,641 116
-----------------------------------------------------------------------------------------------------------------------
r34 EMPLOYEES' PROFIT SHARING EXPENSES 0 0 8,690 16
-----------------------------------------------------------------------------------------------------------------------
r35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
r06 COMPREHENSIVE FINANCING RESULT (49,184) 100 (233,514) 100
-----------------------------------------------------------------------------------------------------------------------
r24 INTEREST EXPENSE 45,496 (93) 29,218 (13)
-----------------------------------------------------------------------------------------------------------------------
r42 GAIN (LOSS) ON RESTATEMENT OF UDI'S 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r45 OTHER FINANCE COSTS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r26 INTEREST INCOME 20,955 43 110,125 47
-----------------------------------------------------------------------------------------------------------------------
r46 OTHER FINANCIAL PRODUCTS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r25 FOREIGN EXCHANGE GAIN (LOSS), NET (24,643) (50) (314,421) (135)
-----------------------------------------------------------------------------------------------------------------------
r28 RESULT FROM MONETARY POSITION 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
r10 INCOME TAXES 168,062 100 1,208,615 100
-----------------------------------------------------------------------------------------------------------------------
r32 INCOME TAX 152,674 91 437,736 36
-----------------------------------------------------------------------------------------------------------------------
r33 DEFERRED INCOME TAX 15,388 9 770,879 64
-----------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
-------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
-------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
-------------------------------------------------------------------------------------------------------------------------
r36 TOTAL SALES 14,674,857 27,900,486
-------------------------------------------------------------------------------------------------------------------------
r37 TAX RESULT FOR THE YEAR 0 0
-------------------------------------------------------------------------------------------------------------------------
r38 NET SALES (**) 21,895,164 33,391,683
-------------------------------------------------------------------------------------------------------------------------
r39 OPERATION INCOME (**) 376,924 3,776,816
-------------------------------------------------------------------------------------------------------------------------
r40 NET INCOME OF MAJORITY INTEREST (**) 1,224,634 1,845,140
-------------------------------------------------------------------------------------------------------------------------
r41 NET CONSOLIDATED INCOME (**) 341,775 2,315,149
-------------------------------------------------------------------------------------------------------------------------
r47 OPERATIVE DEPRECIATION AND AMORTIZATION 811,806 430,097
-------------------------------------------------------------------------------------------------------------------------
(**) RESTATED INFORMATION FOR THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
FROM JULY 1 TO SEPTEMBER 30 OF 2009 AND 2008
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
R
-----------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------
r01 NET SALES 5,035,211 100 10,532,672 100
-----------------------------------------------------------------------------------------------------------------------
r02 COST OF SALES 4,242,839 84 8,725,802 83
-----------------------------------------------------------------------------------------------------------------------
r03 GROSS PROFIT 792,372 16 1,806,870 17
-----------------------------------------------------------------------------------------------------------------------
r04 OPERATING EXPENSES 536,909 11 563,612 5
-----------------------------------------------------------------------------------------------------------------------
r05 OPERATING INCOME 255,463 5 1,243,258 12
-----------------------------------------------------------------------------------------------------------------------
r08 OTHER INCOME AND (EXPENSE), NET 7,330 0 48,981 0
-----------------------------------------------------------------------------------------------------------------------
r06 COMPREHENSIVE FINANCING RESULT 11,461 0 24,944 0
-----------------------------------------------------------------------------------------------------------------------
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r48 NON ORDINARY ITEMS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r09 INCOME BEFORE INCOME TAXES 274,254 5 1,317,183 13
-----------------------------------------------------------------------------------------------------------------------
r10 INCOME TAXES 7,287 0 483,004 5
-----------------------------------------------------------------------------------------------------------------------
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 266,967 5 834,179 8
-----------------------------------------------------------------------------------------------------------------------
r14 DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------
r18 NET CONSOLIDATED INCOME 266,967 5 834,179 8
-----------------------------------------------------------------------------------------------------------------------
r19 NET INCOME OF MINORITY INTEREST (80,758) (2) 218,301 2
-----------------------------------------------------------------------------------------------------------------------
r20 NET INCOME OF MAJORITY INTEREST 347,725 7 615,878 6
-----------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
------------------------------------------------------------------------------------------------------------------------
rt01 NET SALES 5,035,211 100 10,532,672 100
------------------------------------------------------------------------------------------------------------------------
rt21 DOMESTIC 2,686,776 53 3,216,177 31
------------------------------------------------------------------------------------------------------------------------
rt22 FOREIGN 2,348,435 47 7,316,495 69
------------------------------------------------------------------------------------------------------------------------
rt23 TRANSLATED INTO DOLLARS (***) 177,944 707,023
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
rt08 OTHER INCOME AND (EXPENSE), NET 7,330 100 48,981 100
------------------------------------------------------------------------------------------------------------------------
rt49 OTHER INCOME AND (EXPENSE), NET 7,330 100 46,956 96
------------------------------------------------------------------------------------------------------------------------
rt34 EMPLOYEES' PROFIT SHARING EXPENSES 0 0 (2,025) (4)
------------------------------------------------------------------------------------------------------------------------
rt35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
rt06 COMPREHENSIVE FINANCING RESULT 11,461 100 24,944 100
------------------------------------------------------------------------------------------------------------------------
rt24 INTEREST EXPENSE 15,874 139 14,938 60
------------------------------------------------------------------------------------------------------------------------
rt42 GAIN (LOSS) ON RESTATEMENT OF UDI'S 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt45 OTHER FINANCE COSTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt26 INTEREST INCOME 2,873 25 3,516 14
------------------------------------------------------------------------------------------------------------------------
rt46 OTHER FINANCIAL PRODUCTS 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
rt25 FOREIGN EXCHANGE GAIN (LOSS), NET 24,462 213 36,366 146
------------------------------------------------------------------------------------------------------------------------
rt28 RESULT FROM MONETARY POSITION 0 0 0 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
rt10 INCOME TAXES 7,287 100 483,004 100
------------------------------------------------------------------------------------------------------------------------
rt32 INCOME TAX 96,684 1,327 54,460 11
------------------------------------------------------------------------------------------------------------------------
rt33 DEFERRED INCOME TAX (89,397) (1,227) 428,544 89
------------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
-----------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
RT
-----------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
-----------------------------------------------------------------------------------------------------
rt47 OPERATIVE DEPRECIATION AND AMORTIZATION 267,057 163,935
-----------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
STATE OF CASH FLOW (INDIRECT METHOD)
FROM JANUARY 1 TO SEPTEMBER 30 OF 2009 AND 2008
(thousands of pesos)
-------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
-------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
-------------------------------------------------------------------------------------------------------------------------
ACTIVITIES OF OPERATION
-------------------------------------------------------------------------------------------------------------------------
e01 INCOME (LOSS) BEFORE INCOME TAXES 960,641 3,559,768
-------------------------------------------------------------------------------------------------------------------------
e02 + (-) ITEMS NOT REQUIRING CASH 0 450,000
-------------------------------------------------------------------------------------------------------------------------
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 788,894 319,972
-------------------------------------------------------------------------------------------------------------------------
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES 45,496 29,218
-------------------------------------------------------------------------------------------------------------------------
e05 CASH FLOW BEFORE INCOME TAX 1,795,031 4,358,958
-------------------------------------------------------------------------------------------------------------------------
e06 CASH FLOW PROVIDED OR USED IN OPERATION (474,173) (3,032.880)
-------------------------------------------------------------------------------------------------------------------------
e07 CASH FLOW PROVIDED OF OPERATING ACTIVITIES 1,320,858 1,326,078
-------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES
-------------------------------------------------------------------------------------------------------------------------
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (144,649) (8,802,003)
-------------------------------------------------------------------------------------------------------------------------
e09 CASH FLOW AFTER INVESTING ACTIVITIES 1,176,209 (7,475,925)
-------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
-------------------------------------------------------------------------------------------------------------------------
e10 NET CASH FROM FINANCING ACTIVITIES (43,154) 1,714,628
-------------------------------------------------------------------------------------------------------------------------
e11 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 1,133,055 (5,761,297)
-------------------------------------------------------------------------------------------------------------------------
e12 TRANSLATION DIFFERENCES IN CASH AND CASH EQUIVALENTS 0 (13,329)
-------------------------------------------------------------------------------------------------------------------------
e13 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 576,741 6,396,155
-------------------------------------------------------------------------------------------------------------------------
e14 CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 1,709,796 621,529
-------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
STATE OF CASH FLOW (INDIRECT METHOD)
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)
------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
------------------------------------------------------------------------------------------------------------------------
e02 + (-) ITEMS NOT REQUIRING CASH 0 450,000
------------------------------------------------------------------------------------------------------------------------
e15 + ESTIMATES FOR THE PERIOD 0 0
------------------------------------------------------------------------------------------------------------------------
e16 + PROVISIONS FOR THE PERIOD 0 450,000
------------------------------------------------------------------------------------------------------------------------
e17 + (-) OTHER UNREALIZED ITEMS 0 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 788,894 319,972
------------------------------------------------------------------------------------------------------------------------
e18 + DEPRECIATION AND AMORTIZATION FOR THE PERIOD 811,806 430,097
------------------------------------------------------------------------------------------------------------------------
e19 (-) + GAIN OR LOSS ON SALE PROPERTY, PLANT AND EQUIPMENT 0 0
------------------------------------------------------------------------------------------------------------------------
e20 + IMPAIRMENT LOSS 0 0
------------------------------------------------------------------------------------------------------------------------
e21 (-) + EQUITY IN RESULTS OF ASSOCIATES AND JOINT VENTURES 0 0
------------------------------------------------------------------------------------------------------------------------
e22 (-) DIVIDENDS RECEIVED 0 0
------------------------------------------------------------------------------------------------------------------------
e23 (-) INTEREST INCOME (20,955) (110,125)
------------------------------------------------------------------------------------------------------------------------
e24 (-) + OTHER ITEMS (1,957) 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES 45,496 29,218
------------------------------------------------------------------------------------------------------------------------
e25 + ACCRUED INTEREST 45,496 29,218
------------------------------------------------------------------------------------------------------------------------
e26 + (-) OTHER ITEMS 0 0
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
e06 CASH FLOW PROVIDED OR USED IN OPERATION (474,173) (3,032,880)
------------------------------------------------------------------------------------------------------------------------
e27 + (-) DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE 332,042 (1,402,864)
------------------------------------------------------------------------------------------------------------------------
e28 + (-) DECREASE (INCREASE) IN INVENTORIES 478,073 (3,053,291)
------------------------------------------------------------------------------------------------------------------------
e29 + (-)DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLES (142,571) (12,484)
------------------------------------------------------------------------------------------------------------------------
e30 + (-) INCREASE DECREASE IN SUPPLIERS (1,379,700) 1,864,394
------------------------------------------------------------------------------------------------------------------------
e31 + (-)INCREASE DECREASE IN OTHER LIABILITIES 687,200 (174,105)
------------------------------------------------------------------------------------------------------------------------
e32 + (-) INCOME TAXES PAID OR RETURNED (449,217) (254,530)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (144,649) (8,802,003)
------------------------------------------------------------------------------------------------------------------------
e33 (-) PERMANENT INVESTMENT IN SHARES 0 (8,470,226)
------------------------------------------------------------------------------------------------------------------------
e34 + DISPOSITION OF PERMANENT INVESTMENT IN SHARES 0 0
------------------------------------------------------------------------------------------------------------------------
e35 (-) INVESTMENT IN PROPERTY PLANT AND EQUIPMENT (165,604) (377,014)
------------------------------------------------------------------------------------------------------------------------
e36 + SALE OF PROPERTY PLANT AND EQUIPMENT 0 0
------------------------------------------------------------------------------------------------------------------------
e37 (-) INVESTMENT IN INTANGIBLE ASSETS 0 0
------------------------------------------------------------------------------------------------------------------------
e38 + DISPOSITION OF INTANGIBLE ASSETS 0 0
------------------------------------------------------------------------------------------------------------------------
e39 + OTHER PERMANENT INVESTMENTS 0 0
------------------------------------------------------------------------------------------------------------------------
e40 + DISPOSITION OF OTHER PERMANENT INVESTMENTS 0 0
------------------------------------------------------------------------------------------------------------------------
e41 + DIVIDEND RECEIVED 0 0
------------------------------------------------------------------------------------------------------------------------
e42 + INTEREST RECEIVED 20,955 110,125
------------------------------------------------------------------------------------------------------------------------
e43 + (-) DECREASE (INCREASE) ADVANCES AND LOANS TO THIRD PARTS 0 0
------------------------------------------------------------------------------------------------------------------------
e44 + (-) OTHER ITEMS 0 (64,888)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
e10 NET CASH FROM FINANCING ACTIVITIES (43,154) 1,714,628
------------------------------------------------------------------------------------------------------------------------
e45 + BANK FINANCING 0 1,483,366
------------------------------------------------------------------------------------------------------------------------
e46 + STOCK MARKET FINANCING 0 (56)
------------------------------------------------------------------------------------------------------------------------
e47 + OTHER FINANCING 0 0
------------------------------------------------------------------------------------------------------------------------
e48 (-) BANK FINANCING AMORTIZATION (8,777) (927,583)
------------------------------------------------------------------------------------------------------------------------
e49 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
------------------------------------------------------------------------------------------------------------------------
e50 (-) OTHER FINANCING AMORTIZATION 0 0
------------------------------------------------------------------------------------------------------------------------
e51 + (-) INCREASE (DECREASE ) IN CAPITAL STOCK 0 112,269
------------------------------------------------------------------------------------------------------------------------
e52 (-) DIVIDENDS PAID 0 0
------------------------------------------------------------------------------------------------------------------------
e53 + PREMIUM ON ISSUANCE OF SHARES 0 1,056,887
------------------------------------------------------------------------------------------------------------------------
e54 + CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0
------------------------------------------------------------------------------------------------------------------------
e55 (-) INTEREST EXPENSE (21,270) (29,218)
------------------------------------------------------------------------------------------------------------------------
e56 (-) REPURCHASE OF SHARES 0 0
------------------------------------------------------------------------------------------------------------------------
e57 + (-) OTHER ITEMS (13,107) 18,963
------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
DATE PER SHARE
CONSOLIDATED
---------------------------------------------------------------------------------------------------------------------
REF CATEGORIES QUARTER OF PRESENT QUARTER OF PREVIOUS
D FINANCIAL YEAR FINANCIAL YEAR
---------------------------------------------------------------------------------------------------------------------
d01 BASIC PROFIT PER ORDINARY SHARE (**) $ 0.52 $ 3.85
---------------------------------------------------------------------------------------------------------------------
d02 BASIC PROFIT PER PREFERRED SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d03 DILUTED PROFIT PER ORDINARY SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d04 EARNINGS (LOSS) BEFORE DISCONTINUED OPERATIONS PER COMMON
SHARE (**) $ 0.52 $ 3.85
---------------------------------------------------------------------------------------------------------------------
d05 DISCONTINUED OPERATIONS EFFECT ON EARNING (LOSS) PER SHARE
(**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d08 CARRYING VALUE PER SHARE $39.03 $35.53
---------------------------------------------------------------------------------------------------------------------
d09 CASH DIVIDEND ACCUMULATED PER SHARE $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------
d10 DIVIDEND IN SHARES PER SHARE 0.00 shares 0.00 shares
---------------------------------------------------------------------------------------------------------------------
d11 MARKET PRICE TO CARRYING VALUE 0.92 times 0.90 times
---------------------------------------------------------------------------------------------------------------------
d12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE 52.13 times 8.32 times
---------------------------------------------------------------------------------------------------------------------
d13 MARKET PRICE TO BASIC PROFIT PER PREFERENT SHARE (**) 0.00 times 0.00 times
---------------------------------------------------------------------------------------------------------------------
(**) TO CALCULATE THE DATE PER SHARE USE THE NET INCOME FOR THE LAST TWELVE
MONTHS.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
RATIOS
CONSOLIDATED
---------------------------------------------------------------------------------------------------------------------
REF CATEGORIES QUARTER OF PRESENT QUARTER OF PREVIOUS
P FINANCIAL YEAR FINANCIAL YEAR
---------------------------------------------------------------------------------------------------------------------
YIELD
---------------------------------------------------------------------------------------------------------------------
p01 NET INCOME TO NET SALES 5.55% 8.53%
---------------------------------------------------------------------------------------------------------------------
p02 NET INCOME TO STOCKHOLDERS' EQUITY (**) 1.54% 11.19%
---------------------------------------------------------------------------------------------------------------------
p03 NET INCOME TO TOTAL ASSETS (**) 1.12% 7.51%
---------------------------------------------------------------------------------------------------------------------
p04 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------
p05 INCOME DUE TO MONETARY POSITION TO NET INCOME 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
ACTIVITY
---------------------------------------------------------------------------------------------------------------------
p06 NET SALES TO NET ASSETS (**) 0.71 times 1.08 times
---------------------------------------------------------------------------------------------------------------------
p07 NET SALES TO FIXED ASSETS (**) 2.20 times 3.51 times
---------------------------------------------------------------------------------------------------------------------
p08 INVENTORIES TURNOVER (**) 1.39 times 3.37 times
---------------------------------------------------------------------------------------------------------------------
p09 ACCOUNTS RECEIVABLE IN DAYS OF SALES 41 days 36 days
---------------------------------------------------------------------------------------------------------------------
p10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 7.00% 6.14%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
LEVERAGE
---------------------------------------------------------------------------------------------------------------------
p11 TOTAL LIABILITIES TO TOTAL ASSETS 27.64% 32.83%
---------------------------------------------------------------------------------------------------------------------
p12 TOTAL LIABILITIES TO STOCKHOLDERS' EQUITY 0.38 times 0.49 times
---------------------------------------------------------------------------------------------------------------------
p13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 23.52% 43.90%
---------------------------------------------------------------------------------------------------------------------
p14 LONG-TERM LIABILITIES TO FIXED ASSETS 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------
p15 OPERATING INCOME TO INTEREST PAID 22.02 times 128.01 times
---------------------------------------------------------------------------------------------------------------------
p16 NET SALES TO TOTAL LIABILITIES (**) 2.59 times 3.30 times
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
LIQUIDITY
---------------------------------------------------------------------------------------------------------------------
p17 CURRENT ASSETS TO CURRENT LIABILITIES 3.22 times 2.27 times
---------------------------------------------------------------------------------------------------------------------
p18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 1.21 times 0.94 times
---------------------------------------------------------------------------------------------------------------------
p19 CURRENT ASSETS TO TOTAL LIABILITIES 1.59 times 1.39 times
---------------------------------------------------------------------------------------------------------------------
p20 AVAILABLE ASSETS TO CURRENT LIABILITIES 41.04% 10.00%
---------------------------------------------------------------------------------------------------------------------
(**) IN THESE RATIOS FOR THE DATA TAKE INTO CONSIDERATION THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
DIRECTOR REPORT
CONSOLIDATED
Nine-Month Period Ended September 30, 2009 compared to Nine-Month Period Ended
September 30, 2008
Net Sales
Net sales decreased 48% to Ps. 14,277 million in the nine-month period ended
September 30, 2009 (including the net sales generated by the newly acquired
plants of Grupo San of Ps. 2,854 million) compared to Ps. 27,567 million in the
same period 2008 (including the net sales generated by the newly acquired plants
of Grupo San of Ps. 1,586 million). Shipments of finished steel products
decreased 35% to 1,528 thousand tons in the nine-month period ended September
30, 2009 (including the net sales generated by the newly acquired plants of
Grupo San of 386 thousand tons) compared to 2,357 thousand tons in the same
period 2008 (including the net sales generated by the newly acquired plants of
Grupo San of 144 thousand tons). Total sales outside of Mexico in the nine-month
period ended September 30, 2009 decreased 69% to Ps. 6,108 million (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 9
million) compared with Ps. 19,489 million in the same period 2008, (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 97
million) while total Mexican sales increased 1% from Ps. 8,078 million in the
nine-month period ended September 30, 2008 (including the net sales generated by
the newly acquired plants of Grupo San of Ps. 1,489 million) to Ps. 8,169
millions in the same period 2009 (including the net sales generated by the newly
acquired plants of Grupo San of Ps. 2,845 million). The decrease in sales is due
to lower shipments during the nine-month period ended September 30, 2009,
compared to the same period in 2008 (a 829,000 tons decrease). The average price
of steel products decreased 20% in the nine-month period ended September 30,
2009 compared with the same period of 2008.
Direct Cost of Sales
Direct cost of sales decreased 48% from Ps. 22,469 million in the nine-month
period ended September 30, 2008 (including the cost of sales generated by the
newly acquired plants of Grupo San of Ps. 970 million) to Ps. 11,610 million in
the same period 2009 (including the cost of sales generated by the newly
acquired plants of Grupo San of Ps. 1,912 million). Direct cost of sales as a
percentage of net sales represented 81% in the nine-month period ended September
30, 2009 compared to 82% in the same period 2008. The average cost of raw
materials used to produce steel products decreased 20% in the nine-month period
ended September 30, 2009 versus the same period 2008, primarily as a result of
decreases in the price of scrap and certain other raw materials.
Marginal Profit
Marginal profit in the nine-month period ended September 30, 2009 was Ps. 2,667
million (including the marginal profit generated by the newly acquired plants of
Grupo San of Ps. 942 million) compared to Ps. 5,098 million in the same period
2008 (including the marginal profit generated by the newly acquired plants of
Grupo San of Ps. 616 million). Marginal profit as a percentage of net sales in
the nine-month period ended September 30, 2009 was 19% compared to 18% in the
same period 2008. The decline in marginal profit is due to lower shipments of
35% during the nine-month period ended September 30, 2009 compared with the same
period of 2008.
Operating Expenses
Operating expenses increased 23% to Ps. 1,665 million in the nine-month period
ended September 30, 2009 (including the operating expenses from the newly
acquired plants of Grupo San of Ps. 331 million and the amortization of the
tangible and intangible assets of Ps. 269 million registered by the acquisition
of Grupo San) compared to Ps. 1,358 million in the same period 2008 (including
the operating expenses from the newly acquired plants of Grupo San of Ps. 202
million), and represented 12% of net sales in the nine-month period ended
September 30, 2009 and 5% of net sales in the same period 2008.
Operating Income
Operating income decreased 73% to Ps. 1,002 million for the nine-month period
ended September 30, 2009 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 342 million) compared to Ps. 3,740 million
in the same period 2008 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 414 million). Operating income as a
percentage of net sales was 7% in the nine-month period ended September 30, 2009
compared to 14% in the same period 2008. The decline in operating income is due
to lower shipments of 35% during the nine-month period ended September 30, 2009
compared with the same period of 2008.
Comprehensive Financial Cost
Comprehensive financial cost in the nine-month period ended September 30, 2009
represented an expense of Ps. 49 million compared with an expense of Ps. 233
million in the same period 2008. Net interest expense was Ps. 24 million in the
nine-month period ended September 30, 2009 compared with a net interest income
of Ps. 81 million in the same period 2008. At the same time, we registered an
exchange loss of Ps. 25 million in the nine-month period ended September 30,
2009 compared with an exchange loss of Ps. 314 million in the same period 2008,
reflecting a 0.3% increase in the value of the peso versus the dollar in the
nine-month period ended September 30, 2009 compared to the same period of 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the nine-month period
ended September 30, 2009 compared to other income net of Ps. 53 million in the
same period 2008.
Income Taxes
Income Taxes recorded a provision of Ps. 168 million in the nine-month period
ended September 30, 2009 (including the provision of Ps. 15 million of deferred
income taxes) compared to Ps. 1,209 million in the same period of 2008
(including the provision of Ps. 771 million of deferred income taxes).
Net Income
As a result of the foregoing, net income decreased by 66% to Ps. 792 million in
the nine-month period ended September 30, 2009 from Ps. 2,351 million in the
same period 2008.
Liquidity and Capital Resources
As of September 30, 2009, Simec's total consolidated debt consisted of U.S.
$302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest on
September 30, 2009 was U.S. $411,654). As of December 31, 2008, Simec's total
consolidated debt consisted of U.S. $952,000; U.S. $650,000 is a credit bank and
U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest
on December 31, 2008 was U.S. $387,882).
Comparative third quarter 2009 vs second quarter 2009
Net Sales
Net sales increased 21% from Ps. 4,161 million for the second quarter 2009 to
Ps. 5,035 million for the third quarter 2009. Sales in tons of finished steel
increased 17% to 551 thousand tons in the third quarter 2009 compared with 471
thousand tons in the second quarter 2009. The total sales outside of Mexico for
the third quarter 2009 increased 53% to Ps. 2,348 million compared with Ps.
1,538 million for the second quarter 2009. Total Mexican sales increased 2% to
Ps. 2,687 million in the third quarter 2009 from Ps. 2,623 million in the second
quarter 2009. Prices of finished products sold in the third quarter 2009
increased approximately 3% compared to the second quarter 2009.
Direct Cost of Sales
Direct cost of sales increased 30% from Ps. 3,256 million in the second quarter
2009 to Ps. 4,243 million for the third quarter 2009. With respect to sales, in
the third quarter 2009, the direct cost of sales represents 85% compared to 78%
for the second quarter 2009. The average cost of raw materials used to produce
steel products increased 12% in the third quarter 2009 versus the second quarter
2009, primarily as a result of increases in the price of scrap and certain other
raw materials.
Marginal Profit
Marginal profit for the third quarter 2009 decreased 12% to Ps. 792 million
compared to Ps. 905 million in the second quarter 2009. The marginal profit as a
percentage of net sales for the third quarter 2009 was 16% compared with 22% for
the second quarter of 2009. The decline in marginal profit is due to the
increase in the cost of raw materials used to produce steel products in the
third quarter 2009 versus the second quarter 2009.
Operating Expenses
Operating expenses decreased 1% to Ps. 537 million in the third quarter 2009
compared to Ps. 543 million for the second quarter 2009. Operating expenses as a
percentage of net sales represented 11% during the third quarter 2009 and 13%
during the second quarter 2009.
Operating Income
Operating income decreased 30% from an operating income of Ps. 362 million in
the second quarter 2009 to Ps. 255 million of operating income for the third
quarter 2009. The operating income as a percentage of net sales in the third
quarter 2009 was 5% compared to 9% in the second quarter 2009. The decrease in
operating income is due to the increase in the cost of raw materials used to
produce steel products in the third quarter 2009 versus the second quarter 2009.
Comprehensive Financial Income (Cost)
Comprehensive financial income for the third quarter 2009 represented a gain of
Ps. 12 million compared with an expense of Ps. 121 million for the second
quarter 2009. Net interest expense was Ps. 13 million in the third quarter 2009
compared with Ps. 8 million of net interest expense in the second quarter 2009.
At the same time we registered an exchange gain of Ps. 25 million in the third
quarter 2009 compared with an exchange loss of Ps. 113 million in the second
quarter 2009.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the third quarter 2009
compared with other expense net of Ps. 1 million for the second quarter 2009.
Income Taxes
Income Taxes for the third quarter 2009 was an expense of Ps. 7 million compared
to Ps. 154 million of expense for the second quarter 2009.
Net Income
As a result of the foregoing, net income was Ps. 267 million in the third
quarter 2009 compared to Ps. 86 million of net income in the second quarter
2009.
Comparative third quarter 2009 vs third quarter 2008
Net Sales
Net sales decreased 52% from Ps. 10,533 million for the third quarter 2008
(including the net sales generated by the newly acquired plants of Grupo San of
Ps. 1,073 million) to Ps. 5,035 million for the third quarter 2009 (including
the net sales generated by the newly acquired plants of Grupo San of Ps. 955
million). Sales in tons of finished steel decreased 31% to 551 thousand tons in
the third quarter 2009 compared with 795 thousand tons in the third quarter
2008. The total sales outside of Mexico for the third quarter 2009 decreased 68%
to Ps. 2,348 million compared with Ps. 7,317 million for the third quarter 2008.
Total Mexican sales decreased 16% to Ps. 2,687 million in the third quarter 2009
from Ps. 3,216 million in the third quarter 2008. Prices of finished products
sold in the third quarter 2009 decreased approximately 31% compared to the third
quarter 2008.
Direct Cost of Sales
Direct cost of sales decreased 51% from Ps. 8,726 million in the third quarter
2008 (including the cost of sales generated by the newly acquired plants of
Grupo San of Ps. 663 million) to Ps. 4,243 million for the third quarter 2009
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 671 million). With respect to sales, in the third quarter 2009, the
direct cost of sales represents 84% compared to 83% for the third quarter 2008.
The average cost of raw materials used to produce steel products decreased 30%
in the third quarter 2009 versus the third quarter 2008, primarily as a result
of decreases in the price of scrap and certain other raw materials.
Marginal Profit
Marginal profit for the third quarter 2009 decreased 56% to Ps. 792 million
(including the marginal profit generated by the newly acquired plants of Grupo
San of Ps. 284 million) compared to Ps. 1,807 million in the third quarter 2008
(including the marginal profit generated by the newly acquired plants of Grupo
San of Ps. 410 million). The marginal profit as a percentage of net sales for
the third quarter 2009 was 16% compared with 17% for the third quarter 2008. The
decline in marginal profit is due to lower shipments of 31% during the third
quarter 2009 compared with the third quarter 2008.
Operating Expenses
Operating expenses decreased 5% to Ps. 537 million in the third quarter 2009
(including the operating expenses from the newly acquired plants of Grupo San of
Ps. 109 million and the amortization of the tangible and intangible assets of
Ps. 89 million registered by the acquisition of Grupo San) compared to Ps. 564
million for the third quarter 2008 (including the operating expenses from the
newly acquired plants of Grupo San of Ps. 149 million). Operating expenses as a
percentage of net sales represented 11% during the third quarter 2009 and 5%
during the third quarter 2008.
Operating Income
Operating income decreased 79% from an operating income of Ps. 1,243 million in
the third quarter 2008 (including the operating income generated by the newly
acquired plants of Grupo San of Ps. 261 million) to Ps. 255 million of operating
income for the third quarter 2009 (including the operating loss generated by the
newly acquired plants of Grupo San of Ps. 86 million). The operating income as a
percentage of net sales in the third quarter 2009 was 5% compared to 12% in the
third quarter 2008. The decrease in operating income is due to lower shipments
of 31% during the third quarter 2009 compared with the third quarter 2008.
Comprehensive Financial Income (Cost)
Comprehensive financial income for the third quarter 2009 represented a gain of
Ps. 12 million compared with a gain of Ps. 25 million for the third quarter
2008. Net interest expense was Ps. 13 million in the third quarter 2009 compared
with Ps. 11 million of net interest expense in the third quarter 2008. At the
same time we registered an
exchange gain of Ps. 25 million in the third quarter 2009 compared with an
exchange gain of Ps. 36 million in the third quarter 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 7 million in the third quarter 2009
compared with other income net of Ps. 49 million for the third quarter 2008.
Income Taxes
Income Taxes for the third quarter 2009 was an expense of Ps. 7 million compared
to Ps. 483 million of income for the third quarter 2008.
Net Income
As a result of the foregoing, net income was Ps. 267 million in the third
quarter 2009 compared to Ps. 834 million of net income in the third quarter
2008.
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.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
FINANCIAL STATEMENT NOTES
CONSOLIDATED
(1) Operations preparation bases and summary of significant accounting policies:
Grupo Simec, S.A. de C.V. and its Subsidiaries ("the Company") are subsidiaries
of Industrias CH, S.A. de C.V. ("ICH"), and their main activities consist of the
manufacturing and sale of steel products primarily destined for the construction
sector of Mexico and other countries.
Significant accounting policies and practices followed by the Companies which
affect the principal captions of the financial statements are described below:
a. Financial statement presentation - Below is a summary of the most significant
accounting policies and practices used in the preparation of the consolidated
financial statements, in conformity with Mexican Financial Reporting Standards
(MFRS), which include Bulletins and Circulars issued by the Accounting
Principles Commission (CPC) of the Mexican Institute of Public Accountants
(IMCP) which have not been amended, replaced or abrogated by MFRS issued by the
Mexican Financial Reporting Standards Research and Development Board (Consejo
Mexicano para la Investigacion y Desarrollo de Normas de Informacion Financiera,
A.C. (CINIF).
b. Principles of Consolidation - As part of the financial debt restructuring
agreement into during 1997, Compania Siderurgica de Guadalajara, S.A. de C.V.
("CSG") assumed all of the debt of the Company in return for an equity interest
in its subsidiaries. As a result of the above, the Company is the principal
shareholder of CSG, and CSG is the principal shareholder of the other
subsidiaries that Grupo Simec, S.A. de C.V. ("Simec") controlled before the
restructuring.
The main subsidiaries of CSG are the following:
o Simec International, S.A. de C.V.
o Industrias del Acero y del Alambre, S.A. de C.V.
o Pacific Steel Inc.
o SimRep Corporation and PAV Republic and Subsidiaries
o Corporacion Aceros DM, S.A. de C.V. and Subsidiaries
All significant intercompany balances and transactions have been eliminated in
consolidation.
c. Cash and cash equivalents - The Company considers short-term investments with
original maturities not greater than three months to be cash equivalent. Cash
equivalents include temporary investments and Mexican Government Treasury Bonds,
and are stated at market value, which approximates cost plus earned interest.
Any increase in market value is credited to operations for the period.
d. Inventories - Domestic subsidiaries' inventories are recorded initially at
average cost under the direct costing system. Foreign subsidiaries' inventories
are valued on a last-in, first-out (LIFO). For translation effects into MFRS the
inventories have been adjusted from LIFO to average cost under the direct
costing system.
Billet finished goods and work in process, raw materials and materials, supplies
and rollers - At the average cost.
The Company presents as non-current inventories the rollers and spare parts,
which according to historical data and production trends will not be used within
a one-year period.
e. Derivative financial instruments-- During 2009, 2008 and 2007 the Company
used derivative financial instruments for hedging risks associated with natural
gas prices for which it conducted studies on historical consumption, future
requirement and commitments acquired, thus diminishing its exposure to risks
other than its normal operating risks.
To mitigate the risks associated with changes in natural gas prices occurring
naturally as a result of the supply and demand on international markets, the
Company uses natural gas cash-flow exchange contracts or natural gas swaps to
offset fluctuations in the price of natural gas, whereby the Company receives a
floating price and pays a fixed price. Fluctuations in natural gas prices from
volumes consumed are recognized as part of the Company's operating cost.
The fair value of these assets or liabilities is restated at the end of each
month based on the new estimate. The Company periodically evaluates the changes
in cash flows of the derivative instrument to analyze if the swaps are highly
effective for mitigating the exposure to natural gas price fluctuations. A hedge
instrument is considered to be highly effective when changes in its fair value
or cash flows of the primary position are compensated on a regular or
cumulatively basis, by changes in fair value or cash flows of the hedging
instrument in a range between 80% and 125%. In 2009, 2008 and 2007 the fair
value of derivatives that did not qualify for hedge accounting was adjusted
through Statement of Income. For the derivatives that qualified for hedge
accounting their fair value was adjusted through the Stockholders' equity in the
caption Fair value of derivative financial instruments until such time as the
related item the derivative hedges is recognized in income. At that time, the
fair value included in Stockholders' equity is also recognized in income. The
Company is using derivative financial instruments for hedging risks associated
with natural gas prices and conducted studies on historical consumption, future
requirements and commitments; thus it avoided exposure to risks other than the
normal operating risks. Management of the Company examines its financial risks
by continually analyzing price, credit and liquidity risks.
f. Property, plant and equipment - Property, plant and equipment of domestic
origin are restated by using factors derived from The National Consumer Price
Index ("NCPI") from the date of their acquisition, and imported machinery and
equipment are restated by applying devaluation and inflation factors of the
country of origin, until December 31, 2007. Depreciation recorded in the
consolidated statement of income (loss) is computed based upon the estimated
useful life and the restated cost of each asset. In addition, Financial expense
incurred during the construction period is capitalized as construction in
progress. The estimated useful lives of assets as of September 30, 2009 are as
follows:
Years
-----
Buildings........................................... 15 to 50
Machinery and equipment ............................ 10 to 40
Buildings and improvements (Republic)............... 10 to 25
Land improvements (Republic)........................ 5 to 25
Machinery and equipment (Republic).................. 5 to 20
g. Other assets - Organization and pre-operating expenses are capitalized and
their amortization is calculated by the straight-line method over a period
of 20 years.
h. Seniority premiums and severance payments - According to Federal Labor Law,
employees are entitled to seniority premiums after fifteen years or more of
services. These premiums are recognized as expenses in the
years in which the services are rendered, using actuarial calculations based on
the projected unit credit method, and since 1996 by applying real interest and
salary increases.
Any other payments to which employees may be entitled in case of separation,
disability or death, are charged to operations in the period in which they
become payable.
i. Pension plan - Until 1995, the Company provided pension benefits for all
personnel with a minimum of 10 years of service and 35 years of age. The Company
had established an irrevocable trust for its contributions, which were based on
actuarial calculations. In December 1995, the board of directors of the Company,
in agreement with the trade union, discontinued these benefits and related
contributions to the trust fund. This decision was made because of the new
Mexican pension fund system, Administradoras de Fondos para el Retiro, which
establishes similar benefits for the employees. The balance of the trust fund
will be applied to the retirement benefits of qualifying employees until the
fund is exhausted due to the irrevocable status of the fund.
The Company does not have any contractual obligation regarding the payment of
pensions of retirements.
j. Income taxes - In 1999, the Mexican Institute of Public Accountants issued
Bulletin D-4, "Accounting for Income and Asset Taxes and Employee Profit
Sharing", which is effective for all fiscal years beginning January 1, 2000.
Bulletin D-4 establishes financial accounting and reporting standards for the
effects of asset tax, income tax and employee profit sharing that result from
enterprise activities during the current and preceding years.
The Company and its subsidiaries are included in the consolidated tax returns of
the company's parent.
k. Foreign currency transactions and exchange differences - All transactions in
foreign currency are recorded at the exchange rates prevailing on the date of
their execution or liquidation. Foreign currency denominated assets and
liabilities are translated at the exchange rates prevailing at the balance sheet
date. Any exchange differences incurred with regard to assets or liabilities
denominated in foreign currency are charged to operations of the period and are
included in financial income (expense) in the accompanying consolidated
statements of income (loss).
For consolidation purposes, the financial statements of the foreign
subsidiaries, were translated into pesos in conformity with Mexican accounting
Bulletin MFRS B-15, Transactions in Foreign Currency.
The first step in the process of conversion of financial information of the
operations is the determination of the functional currency, which is in first
instance the currency of primary the economic surroundings of the foreign
operation; nevertheless, despite the previous thing, the functional currency can
differ from the premises or registry, in the measurement that this one does not
represent the currency that fundamentally affects the cash flow of the
operations abroad. The financial statements of the foreign subsidiaries were
turned to Mexican pesos with the following procedure:
- Applying the prevailing exchange rate at the consolidated balance date for
monetary assets and liabilities.
- Applying the prevailing historical exchange rate for nonmonetary assets and
liabilities and for stockholders' equity accounts.
- Applying the prevailing the historical exchange rate at the consolidated
balance sheet date for revenues and expenses during the reporting period.
- The resulting effect of translation, the process of consolidation and to apply
the participation method, is recorded in stockholders' equity under the
accumulated effect by conversion forming part of the Comprehensive Income.
l. Geographic concentration of credit risk - The Company sells its products
primarily to distributors for the construction industry with no specific
geographic concentration. Additionally, no single customer accounted for a
significant amount of the Company's sales, and there were no significant
accounts receivable from a single customer or affiliate at September 30, 2009
sales to five customers accounted for approximately 34% of the Republic's sales.
The Company performs evaluations of its customers' credit histories and
establishes and allowance for doubtful accounts based upon the credit risk of
specific customers and historical trends.
m. Other income (expenses) - Other income (expenses) shown in the consolidated
statements of operations primarily includes other financial operations.
(2) Financial Debt:
As of September 30, 2009, Simec's total consolidated debt consisted of U.S.
$302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest on
September 30, 2009 was U.S. $411,654). As of December 31, 2008, Simec's total
consolidated debt consisted of U.S. $952,000; U.S. $650,000 is a credit bank and
U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest
on December 31, 2008 was U.S. $387,882).
(3) Commitments and contingent liabilities:
a. Pacific Steel, Inc. (a wholly-owned subsidiary located in the U.S.A.) has
been named in various claims and suits relating to the generation, storage,
transport, disposal and cleanup of materials classified as hazardous waste. The
Company has accrued approximately Ps. 7,761 (U.S. $574,680) at September 30,
2009, (included in accrued liabilities) relating to these actions; the reduction
of this reserve from previous levels reflects clean-up activities undertaken by
Simec. Management believes the ultimate liability with respect to this matter
will not exceed the amounts that have been accrued.
b. The Company is subject to various other legal proceeding and claims, which
have arisen, in the ordinary course of its business. It is the opinion of
management that their ultimate resolution will not have a material adverse
effect on the Company's consolidated financial position or consolidated results
of operations.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
RELATIONS OF SHARES INVESTMENTS
CONSOLIDATED
-------------------------------------------------------------------------------------------------------------------------------
COMPANY NAME MAIN ACTIVITIES NUMBER OF OWNERSHIP
SHARES
-------------------------------------------------------------------------------------------------------------------------------
SUBSIDIARIES
-------------------------------------------------------------------------------------------------------------------------------
Cia Siderurgica de Guadalajara Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Simec International Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Arrendadora Simec Production and sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Undershaft Sub-Holding 100.00
-------------------------------------------------------------------------------------------------------------------------------
Pacific Steel Scrap purchase 100.00
-------------------------------------------------------------------------------------------------------------------------------
Cia. Siderurgica del Pacifico Rent of land 99.99
-------------------------------------------------------------------------------------------------------------------------------
Coordinadora de Servicios Siderurgicos de Calidad Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Comercializadora Simec Sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Industrias del Acero y del Alambre Sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Procesadora Mexicali Scrap purchase 99.99
-------------------------------------------------------------------------------------------------------------------------------
Servicios Simec Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Sistemas de Transporte de Baja California Freight services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Operadora de Metales Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Operadora de Servicios Siderurgicos de Tlaxcala Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Administradora de Servicios Siderurgicos de Tlaxcala Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Operadora de Servicios de la Industria Siderurgica Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
SimRep Sub-Holding 50.22
-------------------------------------------------------------------------------------------------------------------------------
Republic Engineered Products Production and sales of steel products 50.22
-------------------------------------------------------------------------------------------------------------------------------
CSG Comercial Sales of steel products 99.95
-------------------------------------------------------------------------------------------------------------------------------
Comercializadora de Aceros de Tlaxcala Sales of steel products 99.95
-------------------------------------------------------------------------------------------------------------------------------
Siderurgica de Baja California Sales of steel products 99.95
-------------------------------------------------------------------------------------------------------------------------------
Corporacion Aceros DM Sub-Holding 99.99
-------------------------------------------------------------------------------------------------------------------------------
Productos Siderurgicos de Tlaxcala Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Comercializadora MSAN Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Comercializadora Aceros DM Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Promotora de Aceros San Luis Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Arrendadora Norte de Matamoros Land 85.00
-------------------------------------------------------------------------------------------------------------------------------
Procesadora Industrial Administrative services 99.99
-------------------------------------------------------------------------------------------------------------------------------
Acero Transporte San Freight services 100.00
-------------------------------------------------------------------------------------------------------------------------------
Simec International 2 Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Simec International 3 Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Simec International 4 Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Simec International 5 Production and sales of steel products 99.99
-------------------------------------------------------------------------------------------------------------------------------
Simec Acero Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Simec USA Sales of steel products 100.00
-------------------------------------------------------------------------------------------------------------------------------
Pacific Projects Administrative services 100.00
-------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN SUBSIDIARIES
-------------------------------------------------------------------------------------------------------------------------------
ASSOCIATEDS
-------------------------------------------------------------------------------------------------------------------------------
0
-------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN ASSOCIATEDS 0
-------------------------------------------------------------------------------------------------------------------------------
OTHER PERMANENT INVESTMENTS 0.00
-------------------------------------------------------------------------------------------------------------------------------
TOTAL 0
-------------------------------------------------------------------------------------------------------------------------------
NOTES
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CREDITS BREAK DOWN
(THOUSANDS OF MEXICAN PESOS)
CONSOLIDATED
---------------------------------------------------------------------------------------------------------
Denominated in Pesos (Thousands of Pesos)
---------------------------------------------------------------------------------------------------------
Credit Type / Amortization Rate of
Institution Date Interest Time Interval
---------------------------------------------------------------------------------------------------------
Until 5
Years
Current Until 1 Until 2 Until 3 Until 4 or
Year Year Years Years Years More
---------------------------------------------------------------------------------------------------------
BANKS
---------------------------------------------------------------------------------------------------------
With Warranty 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
LIBOR+
GE CAPITAL 20/05/2010 0.25 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL BANKS 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
LISTED IN THE
STOCK EXCHANGE
---------------------------------------------------------------------------------------------------------
UNSECURED DEBT
---------------------------------------------------------------------------------------------------------
Medium Term Notes 15/12/1998 9.33 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL STOCK
EXCHANGE 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
SUPPLIERS
---------------------------------------------------------------------------------------------------------
Various 593,290 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 593,290 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
OTHER LOANS WITH
COST
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
OTHER CURRENT
LIABILITIES
WITHOUT
COST
---------------------------------------------------------------------------------------------------------
Various 0 1,350,554 0 0 0 0
---------------------------------------------------------------------------------------------------------
TOTAL 0 1,350,554 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL 593,290 1,350,554 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Denominated in Foreign Currency (Thousands of Pesos)
---------------------------------------------------------------------------------------------------------
Credit Type / Amortization Rate of
Institution Date Interest Time Interval
---------------------------------------------------------------------------------------------------------
Until 5
Years
Current Until 1 Until 2 Until 3 Until 4 or
Year Year Years Years Years More
---------------------------------------------------------------------------------------------------------
BANKS
---------------------------------------------------------------------------------------------------------
With Warranty 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
LIBOR+
GE CAPITAL 20/05/2010 0.25 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL BANKS 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
LISTED IN THE
STOCK EXCHANGE
---------------------------------------------------------------------------------------------------------
UNSECURED DEBT
---------------------------------------------------------------------------------------------------------
Medium Term Notes 15/12/1998 9.33 4,078 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL STOCK
EXCHANGE 4,078 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
SUPPLIERS
---------------------------------------------------------------------------------------------------------
Various 1,426,781 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 1,426,781 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
OTHER LOANS WITH
COST
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
OTHER CURRENT
LIABILITIES
WITHOUT
COST
---------------------------------------------------------------------------------------------------------
Various 0 560,429 0 0 0 0
---------------------------------------------------------------------------------------------------------
TOTAL 0 560,429 0 0 0 0
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL 1,430,859 560,429 0 0 0 0
---------------------------------------------------------------------------------------------------------
NOTES: The exchange rate of the peso to the U.S. Dollar at September 30, 2009
was Ps. 13.5042
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
MONETARY FOREIGN CURRENCY POSITION
(Thousands of Mexican Pesos)
CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------------------
DOLLARS OTHER CURRENCIES TOTAL
-----------------------------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY POSITION THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF
DOLLARS PESOS DOLLARS PESOS PESOS
-----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 213,374 2,881,453 1 16 2,881,469
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
LIABILITIES POSITION 146,738 1,981,570 719 9,718 1,991,288
-----------------------------------------------------------------------------------------------------------------------------
SHORT TERM LIABILITIES POSITION 146,738 1,981,570 719 9,718 1,991,288
-----------------------------------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES POSITION 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
NET BALANCE 66,636 899,883 (718) (9,702) 890,181
-----------------------------------------------------------------------------------------------------------------------------
NOTES
THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT SEPTEMBER 30, 2009 WAS
PS. 13.5042
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
DEBT INSTRUMENTS
CONSOLIDATED
FINANCIAL LIMITED BASED IN ISSUED DEED AND/OR TITLE
MEDIUM TERM NOTES
A) Current assets to current liabilities must be 1.0 times or more.
B) Total liabilities to total assets do not be more than 0.60.
C) Operating income plus items added to income which do not require
using cash must be 2.0 times or more.
This notes was offered in the international market.
ACTUAL SITUATION OF FINANCIAL LIMITED
MEDIUM TERM NOTES
A) Accomplished the actual situation is 3.22 times.
B) Accomplished the actual situation is 0.28
C) Accomplished the actual situation is 39.87
As of September 30, 2009, the remaining balance of the MTNs not exchanged
amounts to Ps. 4,078 ($302,000 dollars).
C.P. Jose Flores Flores
Chief Financial Officer
BONDS AND/OR MEDIUM TERM NOTES CERTIFICATE
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
CONSOLIDATED
--------------------------------------------------------------------------------------------------------------------------
PLANT OR CENTER ECONOMIC ACTIVITY PLANT CAPACITY UTILIZATION (%)
--------------------------------------------------------------------------------------------------------------------------
GUADALAJARA MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 480 79.07
--------------------------------------------------------------------------------------------------------------------------
MEXICALI MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 250 76.80
--------------------------------------------------------------------------------------------------------------------------
INDUSTRIAS DEL ACERO Y DEL ALAMBRE SALE OF STEEL PRODUCTS 0 0.00
--------------------------------------------------------------------------------------------------------------------------
APIZACO AND CHOLULA PLANTS PRODUCTION AND SALES OF STEEL PRODUCTS 460 77.00
--------------------------------------------------------------------------------------------------------------------------
CANTON CASTER FACILITY PRODUCTION OF BILLET 1,380 40.10
--------------------------------------------------------------------------------------------------------------------------
LORAIN CASTER FACILITY PRODUCTION OF BILLET 1,150 0.00
--------------------------------------------------------------------------------------------------------------------------
LORAIN HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 840 28.90
--------------------------------------------------------------------------------------------------------------------------
LACKAWANNA HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 600 42.40
--------------------------------------------------------------------------------------------------------------------------
MASSILLON COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 125 44.60
--------------------------------------------------------------------------------------------------------------------------
GARY COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 70 23.70
--------------------------------------------------------------------------------------------------------------------------
ONTARIO COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 60 41.80
--------------------------------------------------------------------------------------------------------------------------
SAN LUIS POTOSI COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 600 85.82
--------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
MAIN RAW MATERIALS
CONSOLIDATED
--------------------------------------------------------------------------------------------------------------
DOMESTIC COST
DOMESTIC MAIN SUPPLIERS FOREIGN MAIN SUPPLIERS SUBSTITUTION PRODUCTION (%)
--------------------------------------------------------------------------------------------------------------
PLANTS IN USA SCRAP VARIOUS NO 30.20
--------------------------------------------------------------------------------------------------------------
SCRAP VARIOUS PLANTS IN MEXICO 55.01
--------------------------------------------------------------------------------------------------------------
FERROALLOYS VARIOUS PLANTS IN MEXICO YES 7.93
--------------------------------------------------------------------------------------------------------------
PLANTS IN USA FERROALLOYS VARIOUS NO 12.10
--------------------------------------------------------------------------------------------------------------
ELECTRODES VARIOUS PLANTS IN MEXICO VARIOUS YES 2.83
--------------------------------------------------------------------------------------------------------------
PLANTS IN USA ELECTRODES VARIOUS NO 3.00
--------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
CONSOLIDATED
DOMESTIC SALES
--------------------------------------------------------------------------------
MAIN PRODUCTS NET SALES MAIN DESTINATION
--------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS CUSTOMERS
--------------------------------------------------------------------------------
COMMERCIAL PROFILES 741 5,868,080
--------------------------------------------------------------------------------
SPECIAL PROFILES 268 2,300,614
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
T O T A L 8,168,694
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOREIGN SALES 6,108,582
--------------------------------------------------------------------------------
TOTAL 14,277,276
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
CONSOLIDATED
FOREIGN SALES
--------------------------------------------------------------------------------
MAIN PRODUCTS NET SALES MAIN
--------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS CUSTOMERS
--------------------------------------------------------------------------------
EXPORTS
--------------------------------------------------------------------------------
COMMERCIAL PROFILES 86 405,951
--------------------------------------------------------------------------------
SPECIAL PROFILES 38 382,126
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOREIGN SUBSIDIARIES
--------------------------------------------------------------------------------
SPECIAL PROFILES 433 5,320,505
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
T O T A L 6,108,582
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSTRUCTION IN PROGRESS
CONSOLIDATED
THE PROJECTS IN PROGRESS AT SEPTEMBER 30, 2009, ARE:
PROJECTS IN PROGRESS TOTAL INVESTMENT
PROJECTS IN REPUBLIC 237,566
PROJECTS IN MEXICALI 165,067
PROJECTS IN TLAXCALA 80,090
PROJECTS IN GUADALAJARA 17,268
PROJECTS IN SAN LUIS POTOSI 21,131
TOTAL INVESTMENT AT
SEPTEMBER 30, 2009 521,122
=======
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
TRANSACTIONS IN FOREIGN CURRENCY AND CONVERSION OF FINANCIAL STATEMENTS OF
FOREIGN OPERATIONS INFORMATION RELATED TO BULLETIN B-15
CONSOLIDATED
Foreign currency transactions and exchange differences - All transactions in
foreign currency are recorded at the exchange rates prevailing on the date of
their execution or liquidation. Foreign currency denominated assets and
liabilities are translated at the exchange rates prevailing at the balance sheet
date. Any exchange differences incurred with regard to assets or liabilities
denominated in foreign currency are charged to operations of the period and are
included in financial income (expense) in the accompanying consolidated
statements of income (loss).
For consolidation purposes, the financial statements of the foreign
subsidiaries, were translated into pesos in conformity with Mexican accounting
Bulletin MFRS B-15, Transactions in Foreign Currency.
The first step in the process of conversion of financial information of the
operations is the determination of the functional currency, which is in first
instance the currency of primary the economic surroundings of the foreign
operation; nevertheless, despite the previous thing, the functional currency can
differ from the premises or registry, in the measurement that this one does not
represent the currency that fundamentally affects the cash flow of the
operations abroad. The financial statements of the foreign subsidiaries were
turned to Mexican pesos with the following procedure:
- Applying the prevailing exchange rate at the consolidated balance date for
assets and liabilities.
- Applying the prevailing historical exchange rate for stockholders' equity
accounts.
- Applying the prevailing the historical exchange rate at the consolidated
balance sheet date for revenues and expenses during the reporting period.
- The resulting effect of translation, the process of consolidation and to apply
the participation method, is recorded in stockholders' equity under the
accumulated effect by conversion forming part of the Comprehensive Income.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
TOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED
INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES
------------------------------------------------------------------------------------------------
NOMINAL VALID CAPITAL STOCK
SERIES VALUE COUPON NUMBER OF SHARES (Thousands of Pesos)
------------------------------------------------------------------------------------------------
FIXED VARIABLE FREE
PORTION PORTION MEXICAN SUBSCRIPTION FIXED VARIABLE
------------------------------------------------------------------------------------------------
B 90,850,050 406,859,164 0 497,709,214 441,786 1,978,444
------------------------------------------------------------------------------------------------
TOTAL 90,850,050 406,859,164 0 497,709,214 441,786 1,978,444
------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL NUMBER OF SHARES REPRESENTING THE PAID-IN CAPITAL STOCK ON THE DATE OF
SENDING THE INFORMATION: 497,709,214
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
TOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2009
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED
DECLARATION OF THE COMPANY OFFICIALS RESPONSIBLE FOR THE
INFORMATION CONTAINED IN THIS REPORT.
LUIS GARCIA LIMON AND JOSE FLORES FLORES CERTIFY THAT BASED ON OUR KNOWLEDGE,
THIS REPORT DOES NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE HEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH SUCH STATEMENTS WERE MADE, NOT MISLEADING WITH
RESPECT TO THE PERIOD COVERED BY THIS THIRD QUARTER REPORT.
ING LUIS GARCIA LIMON C.P. JOSE FLORES FLORES
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
GUADALAJARA, JAL, AT OCTOBER 29 OF 2009.