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, 2008.
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 28, 2008. 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.B. 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 2008
GUADALAJARA, MEXICO, October 28, 2008- 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, 2008.
Acquisition of Corporacion Aceros DM, S.A. de C.V.
On February 21, 2008, we entered into an agreement to acquire 100% of the shares
of Corporacion Aceros DM, S.A. de C.V. and certain of its affiliates ("Grupo
San"), and on May 30, 2008 said acquisition was consummated. Grupo San is a long
products steel mini-mill and the second-largest corrugated rebar producer in
Mexico. Grupo San's operations are based in San Luis Potosi, Mexico. Its plants
and 1,450 employees produce 600 thousand tons of finished products annually.
With this acquisition, Simec and Industrias CH, S.A.B. de C.V. ("ICH") position
themselves as the second-largest producer of rebar and the largest steel
producer in Mexico, with a production capacity of approximately 4.5 million tons
of liquid steel and 3.8 million tons of finished products.
With this strategic acquisition, Simec and ICH will achieve a more diversified
product mix, with 40% of sales in Mexico and 60% outside Mexico, both of which
will allow them to better address the natural cycles of the steel industry on
the domestic and global levels. Additionally, Simec has already identified
significant synergies and economies of scale that will increase the company's
operating margins. Grupo San's central location in San Luis Potosi, where Simec
is not currently present, also represents a strong competitive advantage since
it provides several strategic benefits mainly related to distribution, given its
proximity to Mexico's main cities, sea ports, and borders.
In addition, Grupo San has aggressive expansion plans in its rebar business,
which ICH and Simec will support and promote to satisfy the growing demand for
this product, resulting from the Mexican Government's aggressive infrastructure
plan.
The financial statements of Simec include the operations of Grupo San since June
1, 2008.
Pursuant to Mexican Financial Reporting Standards "Bulletin B-7 Acquisitions of
Business," Simec is in the process of calculating the goodwill and other
intangible assets in the acquisition of Grupo San.
Nine-Month Period Ended September 30, 2008 compared to Nine-Month Period Ended
September 30, 2007
Net Sales
Net sales increased 51% to Ps. 27,567 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. 1,586 million) compared to Ps. 18,282 million in the
same period of 2007. Shipments of finished steel products increased 17% to 2
million 357 thousand tons in the nine-month period ended September 30, 2008
(including the net sales generated by the newly acquired plants of Grupo San of
144 thousand tons) compared to 2 million 18 thousand tons in the same period of
2007. Total sales outside of Mexico in the nine-month period ended September 30,
2008 increased 53% to Ps. 19,489 million (including the net sales generated by
the newly acquired plants of Grupo San of Ps. 97 million) compared with Ps.
12,767 million in the same period of 2007, while total Mexican sales increased
46% from Ps. 5,515 million in the nine-month period ended September 30, 2007 to
Ps. 8,078 million in the same period of 2008 (including the net sales generated
by the newly acquired plants of Grupo San of Ps. 1,489 million). The increase in
sales can be explained due to higher shipments during the nine-month period
ended September 30, 2008, compared with the same period in 2007 (339,000 tons
increase) and 29% increase in the average price of steel products.
Direct Cost of Sales
Direct cost of sales increased 49% from Ps. 15,063 million in the nine-month
period ended September 30, 2007 to Ps. 22,469 million in the same period 2008
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 970 million). Direct cost of sales as a percentage of net sales
represented 82% in the nine-month period ended September 30, 2008 compared to
82% in the same period of 2007. The increase in the direct cost of sales is
attributable mainly to an increase of 28% in the average cost of raw materials
used to produce steel products in the nine-month period ended September 30, 2008
versus the same period of 2007, primarily as a result of increases in the price
of scrap and certain other raw materials, as well as a 17% increase in
shipments.
Gross Profit
Gross profit in the nine-month period ended September 30, 2008 was Ps. 5,098
million (including the gross profit generated by the newly acquired plants of
Grupo San of Ps. 616 million) compared to Ps. 3,219 million in the same period
of 2007. Gross profit as a percentage of net sales in the nine-month period
ended September 30, 2008 was 18% compared to 18% in the same period of 2007.
This increase in gross profit was principally due to an increase of 17% in sales
volume.
Operating Expenses
Operating expenses increased 27% to Ps. 1,358 million in the nine-month period
ended September 30, 2008 (including the operating expenses by the newly acquired
plants of Grupo San of Ps. 202 million) compared to Ps. 1,071 million in the
same period of 2007 and represented 5% of net sales in the nine-month period
ended September 30, 2008 and 6% of net sales in the same period of 2007.
Operating Profit
Operating profit increased 74% to Ps. 3,740 million in the nine-month period
ended September 30, 2008 (including the operating profit by the newly acquired
plants of Grupo San of Ps. 414 million) compared to Ps. 2,148 million in the
same period of 2007. Operating profit as a percentage of net sales was 14% in
the nine-month period ended September 30, 2008 compared to 12% in the same
period of 2007. The increase in the operating profit was due principally to an
increase of 17% in sales volume.
Comprehensive Financial Cost
Comprehensive financial cost in the nine-month period ended September 30, 2008
represented an expense of Ps. 233 million compared with a gain of Ps. 208
million in the same period of 2007. Net interest income was Ps. 81 million in
the nine-month period ended September 30, 2008 compared with net interest income
of Ps. 218 million in the same period of 2007, reflecting the use of cash and
debt for the acquisition of Grupo San. At the same time, we registered an
exchange loss of Ps. 314 million in the nine-month period ended September 30,
2008 compared with an exchange loss of Ps. 2 million in the same period of 2007,
reflecting a 0.7% increase in the value of the peso versus the dollar at
September 30, 2008 compared to December 31, 2007.
Other Expenses (Income) net
The company recorded other income net of Ps. 53 million in the nine-month period
ended September 30, 2008 compared to other income net of Ps. 45 million in the
same period of 2007.
Income Taxes
Income Taxes recorded Ps. 1,209 million in the nine-month period ended September
30, 2008 compared to Ps. 740 million in the same period of 2007.
Net Profit
As a result of the foregoing, net profit increased by 42% to Ps. 2,351 million
in the nine-month period ended September 30, 2008 from Ps. 1,661 million in the
same period of 2007.
Liquidity and Capital Resources
At September 30, 2008, Simec's total consolidated debt consisted of U.S. $54.8
million; U.S. $30 million is a credit bank, U.S. $21.5 million is a credit from
GE Capital and U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998
(accrued interest at September 30, 2008 was U.S. $380,583). At December 31,
2007, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8%
medium-term notes ("MTN's") due 1998 (accrued interest at December 31, 2007 was
U.S. $363,703).
Net resources provided by operations were Ps. 1,407 million in the nine-month
period ended September 30, 2008 versus Ps. 2,031 million of net resources
provided by operations in the same period of 2007. Net resources provided by
financing activities were Ps. 1,744 million in the nine-month period ended
September 30, 2008 (which amount includes the capital increase of Ps. 1,169
million in July 2008) versus Ps. 2,375 million of net resources provided by
financing activities in the same period of 2007 (which amount includes the
capital increase of Ps. 2,420 million in February 2007). Net resources used in
investing activities (to acquire property, plant and equipment, other
non-current assets and liabilities) were Ps. 8,925 million in the nine-month
period ended September 30, 2008 (which amount includes Ps. 8,437 million used in
the acquisition of Grupo San) versus net resources used in investing activities
(to acquire property, plant and equipment and other non-current assets and
liabilities) of Ps. 522 million in the same period of 2007.
Comparative Third Quarter 2008 vs. Second Quarter 2008
Net Sales
Net sales increased 8% from Ps. 9,746 million for the second quarter 2008
(including the net sales generated by the newly acquired plants of Grupo San of
Ps. 513 million) to 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). Sales in tons of finished steel decreased 3% to 795 thousand tons in
the third quarter 2008 compared with 817 thousand tons in the second quarter
2008. The total sales outside of Mexico for the third quarter 2008 increased 8%
to Ps. 7,317 million compared with Ps. 6,749 million for the second quarter
2008. Total Mexican sales increased 7% to Ps. 3,216 million in the third quarter
2008 from Ps. 2,997 million in the second quarter 2008. Prices of finished
products sold in the third quarter 2008 increased approximately 11% compared to
the second quarter 2008.
Direct Cost of Sales
Direct cost of sales increased 13% from Ps. 7,693 million in the second quarter
2008 (including the cost of sales generated by the newly acquired plants of
Grupo San of Ps. 308 million) to Ps. 8,726 million for the third quarter 2008
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 663 million). With respect to sales, in the third quarter 2008, the
direct cost of sales represents 83% compared to 79% for the second quarter 2008.
The average cost of raw materials used to produce steel products increased 17%
in the third quarter 2008 versus the second quarter 2008, primarily as a result
of increases in the price of scrap and certain other raw materials
Gross Profit
Gross profit for the third quarter 2008 decreased 12% to Ps. 1,807 million
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 410 million) compared to Ps. 2,053 million in the second quarter 2008
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 205 million). The gross profit as a percentage of net sales for the third
quarter 2008 was 17% compared with 21% for the second quarter 2008. The decrease
in gross profit was principally due to the decrease in sales volume.
Operating Expenses
Operating expenses increased 30% to Ps. 564 million in the third quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 149 million) compared to Ps. 434 million for the second quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 53 million). Operating expenses as a percentage of net sales represented 5%
during the third quarter 2008 compared to 4% in the second quarter 2008.
Operating Profit
Operating profit decreased 23% from Ps. 1,619 million in the second quarter 2008
(including the operating profit by the newly acquired plants of Grupo San of Ps.
152 million) to Ps. 1,243 million for the third quarter 2008 (including the
operating profit by the newly acquired plants of Grupo San of Ps. 261 million).
The operating profit as a percentage of net sales in the third quarter 2008 was
12% compared to 17% in the second quarter 2008. The decrease in operating profit
was principally due to the decrease in tons shipped.
Comprehensive Financial Cost
Comprehensive financial cost for the third quarter 2008 represented an income of
Ps. 25 million compared with an expense of Ps. 197 million for the second
quarter 2008. Net interest expense was Ps. 11 million in the third quarter 2008
compared with Ps. 37 million of net interest income in the second quarter 2008.
At the same time, we registered an exchange gain of Ps. 36 million in the third
quarter 2008 compared with an exchange loss of Ps. 234 million in the second
quarter 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 49 million in the third quarter
2008 compared with other expense net of Ps. 2 million for the second quarter
2008.
Income Taxes
Income taxes for the third quarter 2008 was an expense of Ps. 483 million
compared to Ps. 495 million of expense for the second quarter 2008.
Net Profit
As a result of the foregoing, net profit was Ps. 834 million in the third
quarter 2008 compared to Ps. 925 million of net profit in the second quarter
2008.
Comparative Third Quarter 2008 vs. Third Quarter 2007
Net Sales
Net sales increased 84% from Ps. 5,725 million for the third quarter 2007
compared with Ps. 10,533 million for the same period in 2008 (including the net
sales generated by the newly acquired plants of Grupo San of Ps. 1,073 million).
Sales in tons of finished steel increased 25% to 795 thousand tons in the third
quarter 2008 compared with 635 thousand tons in the same period 2007. The total
sales outside of Mexico for the third quarter 2008 increased 82% to Ps. 7,317
million compared with Ps. 4,029 million for the same period 2007. Total Mexican
sales increased 90% to Ps. 3,216 million in the third quarter 2008 from Ps.
1,696 millions in the same period 2007. Prices of finished products sold in the
third quarter 2008 increased approximately 47% compared to the third quarter
2007.
Direct Cost of Sales
Direct cost of sales increased 77% from Ps. 4,927 million in the third quarter
2007 to Ps. 8,726 million for the same period 2008 (including the cost of sales
generated by the newly acquired plants of Grupo San of Ps. 663 million). With
respect to sales, in the third quarter 2008, the direct cost of sales represents
83% compared to 86% for the same period 2007. The average cost of raw materials
used to produce steel products increased 41% in the third quarter 2008 versus
the third quarter 2007, primarily as a result of increases in the price of scrap
and certain other raw materials.
Gross Profit
Gross profit for the third quarter 2008 increased 126% to Ps. 1,807 million
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 410 million) compared to Ps. 798 million in the same period 2007. The
gross profit as a percentage of net sales for the third quarter 2008 was 17%
compared with 14% for the same period 2007. The increase in gross profit was
principally due to the increase in tons shipped.
Operating Expenses
Operating expenses increased 60% to Ps. 564 million in the third quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 149 million) compared to Ps. 353 million for the same period 2007. Operating
expenses as a percentage of net sales represented 5% during the third quarter
2008 compared to 6% of the same period 2007.
Operating Profit
Operating profit increased 179% from Ps. 445 million in the third quarter 2007
to Ps. 1,243 million for the same period 2008 (including the operating profit by
the newly acquired plants of Grupo San of Ps. 261 million). The operating profit
as a percentage of net sales in the third quarter 2008 was 12% compared to 8% in
the same period 2007. The increase in operating profit was due principally to an
increase of 25% in sales volume.
Comprehensive Financial Cost
Comprehensive financial cost for the third quarter 2008 represented a gain of
Ps. 25 million compared with a gain of Ps. 91 million for the third quarter
2007. Net interest expense was Ps. 11 million in the third quarter 2008 compared
with Ps. 93 million in the third quarter 2007. At the same time, we registered
an exchange gain of Ps. 36 million in the third quarter 2008 compared with an
exchange gain of Ps. 29 million in the third quarter 2007.
Other Expenses (Income) net
The company recorded other income net of Ps. 49 million for the third quarter
2008 compared with other income net of Ps. 27 million for the same period 2007.
Income Taxes
Income taxes for the third quarter 2008 increased to Ps. 483 million compared to
Ps. 198 million for the same period 2007.
Net Profit
As a result of the foregoing, net profit increased by 128% to Ps. 834 million in
the third quarter 2008 from Ps. 365 million in the third quarter 2007.
2008
Nine months ended Nine months ended vs.
September 30, 2008 September 30, 2007 2007
------------------ ------------------ ----
Sales 27,567 18,282 51%
Cost of Sales 22,469 15,063 49%
Gross Profit 5,098 3,219 58%
Operating Expenses 1,358 1,071 27%
Operating Profit 3,740 2,148 74%
EBITDA 4,170 2,527 65%
Net Profit 2,351 1,661 42%
Sales Outside Mexico 19,489 12,767 53%
Sales in Mexico 8,078 5,515 46%
Total Sales (tons) 2,357 2,018 17%
3Q08 vs. 3Q08 vs.
(Millions of pesos) 3Q08 2Q08 3Q07 2Q08 3Q07
------------------------ ------ ----- ----- -------- --------
Sales 10,533 9,746 5,725 8% 84%
Cost of Sales 8,726 7,693 4,927 13% 77%
Gross Profit 1,807 2,053 798 (12%) 126%
Operating Expenses 564 434 353 30% 60%
Operating Profit 1,243 1,619 445 (23%) 179%
EBITDA 1,407 1,755 569 (20%) 147%
Net Profit 834 925 365 (10%) 128%
Sales Outside Mexico 7,317 6,749 4,029 8% 82%
Sales in Mexico 3,216 2,997 1,696 7% 90%
Total Sales (tons) 795 817 635 (3%) 25%
Thousands of Millions of Average price Thousands of Millions of Average price
tons nine pesos nine per ton nine tons nine pesos nine per ton nine
months ended months ended months ended months ended months ended months ended
September September September 30, September September 30, September 30,
Product 30,2008 30, 2008 2008 30, 2007 2007 2007
------------ ------------ ------------ ------------ ------------ ------------
SBQ 1,699 20,731 12,202 1,449 13,895 9,589
Light Structural 142 1,448 10,197 217 1,705 7,857
Structural 150 1,608 10,720 171 1,395 8,158
Rebar 321 3,198 9,963 180 1,247 6,928
Others 45 582 -- 1 401 --
Total 2,357 27,567 11,696 2,018 18,282 9,059
Thousands Millions Average Thousands Millions Average Thousands Millions Average
of tons of pesos price per of tons of pesos price per of tons of pesos price per
Product 3Q08 3Q08 ton 3Q08 2Q08 2Q08 ton 2Q08 3Q07 3Q07 ton 3Q07
------- --------- -------- --------- --------- -------- --------- --------- -------- ---------
SBQ 555 7,858 14,159 579 7,124 12,304 467 4,429 9,484
Light Structural 41 482 11,756 47 512 10,894 60 487 8,117
Structural 40 488 12,200 55 616 11,200 50 400 8,000
Rebar 127 1,324 10,425 124 1,325 10,685 58 388 6,690
Others 32 381 -- 12 169 -- -- 21 --
Total 795 10,533 13,249 817 9,746 11,929 635 5,725 9,016
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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
AT SEPTEMBER 30 OF 2008 AND 2007
(thousands of Mexican pesos)
REF
S CONCEPTS CURRENT YEAR PREVIOUS YEAR
----- -------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
s01 TOTAL ASSETS 30,807,410 100 22,903,979 100
s02 CURRENT ASSETS 14,099,087 46 14,489,655 63
s03 CASH AND SHORT-TERM INVESTMENTS 621,529 2 6,088,499 27
s04 ACCOUNTS AND NOTES RECEIVABLE (NET) 4,276,608 14 2,654,961 12
s05 OTHER ACCOUNTS AND NOTES RECEIVABLE 712,722 2 291,208 1
s06 INVENTORIES 8,281,058 27 5,359,832 23
s07 OTHER CURRENT ASSETS 207,170 1 95,155 0
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) 9,505,835 31 7,911,487 35
s13 LAND AND BUILDINGS 3,337,012 11 2,604,325 11
s14 MACHINERY AND INDUSTRIAL EQUIPMENT 12,073,769 39 8,733,980 38
s15 OTHER EQUIPMENT 231,790 1 108,813 0
s16 ACCUMULATED DEPRECIATION 6,563,790 21 3,746,132 16
s17 CONSTRUCTION IN PROGRESS 427,054 1 210,501 1
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 7,105,029 23 415,623 2
s19 OTHER ASSETS 97,459 0 87,214 0
s20 TOTAL LIABILITIES 10,114,717 100 5,744,681 100
s21 CURRENT LIABILITIES 6,212,902 61 3,162,041 55
s22 SUPPLIERS 4,214,351 42 2,301,842 40
s23 BANK LOANS 555,783 5 0 0
s24 STOCK MARKET LOANS 3,226 0 3,344 0
s103 OTHER LOANS WITH COST 0 0 0 0
s25 TAXES PAYABLE 397,003 4 29,583 1
s26 OTHER CURRENT LIABILITIES WITHOUT COST 1,042,539 10 827,272 14
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 3,901,815 39 2,582,640 45
s33 CONSOLIDATED STOCKHOLDERS' EQUITY 20,692,693 100 17,159,298 100
s34 MINORITY INTEREST 3,010,295 14 2,459,663 14
s35 MAJORITY INTEREST 17,682,398 85 14,699,635 86
s36 CONTRIBUTED CAPITAL 8,350,900 40 7,181,744 42
S79 CAPITAL STOCK 4,142,696 20 4,030,427 23
s39 PREMIUM ON ISSUANCE OF SHARES 4,208,204 20 3,151,317 18
s40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0 0 0
s41 EARNED CAPITAL 9,331,498 45 7,517,891 44
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,423,069 50 8,445,774 49
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,091,571) (5) (927,883) (5)
s80 SHARES REPURCHASED 0 0 0 0
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
REF
S CONCEPTS CURRENT YEAR PREVIOUS YEAR
----- -------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
s03 CASH AND SHORT-TERM INVESTMENTS 621,529 100 6,088,499 100
s46 CASH 520,535 84 327,317 5
s47 SHORT-TERM INVESTMENTS 100,994 16 5,761,182 95
s07 OTHER CURRENT ASSETS 207,170 100 95,155 100
s81 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
s82 DISCONTINUED OPERATIONS 0 0 0 0
s83 OTHER 207,170 100 95,155 100
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 7,105,029 100 415,623 100
s48 DEFERRED EXPENSES 275,915 4 312,571 75
s49 GOODWILL 6,767,670 95 40,072 10
s51 OTHER 61,444 1 62,980 15
s19 OTHER ASSETS 97,459 100 87,214 100
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 97,459 100 87,214 100
s21 CURRENT LIABILITIES 6,212,902 100 3,162,041 100
s52 FOREIGN CURRENCY LIABILITIES 4,440,801 71 2,332,086 74
s53 MEXICAN PESOS LIABILITIES 1,772,101 29 829,955 26
s26 OTHER CURRENT LIABILITIES WITHOUT COST 1,042,539 100 827,272 100
s88 DERIVATIVE FINANCIAL INSTRUMENTS 112,499 11 0 0
s89 INTEREST LIABILITIES 4,107 0 3,955 0
s68 PROVISIONS 0 0 0 0
s90 DISCONTINUED OPERATIONS 0 0 0 0
s58 OTHER CURRENT LIABILITIES 925,933 89 823,317 100
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 3,901,815 100 2,582,640 100
s66 DEFERRED TAXES 3,732,267 96 2,534,115 98
s91 OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE 111,948 3 17,135 1
s92 DISCONTINUED OPERATIONS 0 0 0 0
s69 OTHER LIABILITIES 57,600 1 31,390 1
s79 CAPITAL STOCK 4,142,696 100 4,030,427 100
s37 CAPITAL STOCK (NOMINAL) 2,420,230 58 2,307,961 57
s69 RESTATEMENT OF CAPITAL STOCK 1,722,466 42 1,722,466 43
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
REF
S CONCEPTS CURRENT YEAR PREVIOUS YEAR
----- -------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,423,069 100 8,445,774 100
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 8,481,722 81 6,820,510 81
s45 NET INCOME FOR THE YEAR 1,740,735 17 1,424,652 17
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,091,571) 100 (927,883) 100
s70 ACCUMULATED MONETARY RESULT 0 0 0 0
s71 RESULT FROM HOLDING NON-MONETARY ASSETS 0 0 102,023 (11)
s96 CUMULATIVE RESULT FROM FOREIGN CURRENCY TRANSLATION (45,040) 4 (54,936) 6
s97 CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL INSTRUMENTS (76,018) 7 (4,457) 0
s98 CUMULATIVE EFFECT OF DEFERRED INCOME TAXES (970,513) 89 (970,513) 105
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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
BALANCE SHEETS
OTHER CONCEPTS
(thousands of Mexican pesos)
REF
S CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
S72 WORKING CAPITAL 7,886,185 11,327,614
S73 PENSIONS FUND AND SENIORITY PREMIUMS 103,501 0
S74 EXECUTIVES (*) 60 47
S75 EMPLOYERS (*) 2,070 1,178
S76 WORKERS (*) 3,820 3,187
S77 COMMON SHARES (*) 497,709,214 474,621,611
S78 REPURCHASED SHARES (*) 0 0
S101 RESTRICTED CASH 0 0
S102 NET DEBT OF NON CONSOLIDATED COMPANIES 0 0
(*) THESE ITEMS SHOULD BE EXPRESSED IN UNITS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
FROM JANUARY 1 TO SEPTEMBER 30 OF 2008 AND 2007
(thousands of Mexican pesos)
REF
R CATEGORIES CURRENT YEAR PREVIOUS YEAR
----- ---------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
r01 NET SALES 27,567,332 100 18,281,743 100
r02 COST OF SALES 22,469,467 82 15,063,076 82
r03 GROSS PROFIT 5,097,865 18 3,218,667 18
r04 OPERATING EXPENSES 1,357,534 5 1,071,135 6
r05 OPERATING INCOME 3,740,331 14 2,147,532 12
r08 OTHER INCOME AND (EXPENSE), NET 52,951 0 45,660 0
r06 COMPREHENSIVE FINANCING RESULT (233,514) 0 207,820 1
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 3,559,768 13 2,401,012 13
r10 INCOME TAXES 1,208,615 4 740,233 4
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 2,351,153 9 1,660,779 9
r14 DISCONTINUED OPERATIONS 0 0 0 0
r18 NET CONSOLIDATED INCOME 2,351,153 9 1,660,779 9
r19 NET INCOME OF MINORITY INTEREST 610,418 2 236,127 1
r20 NET INCOME OF MAJORITY INTEREST 1,740,735 6 1,424,652 8
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
REF
R CONCEPTS CURRENT YEAR PREVIOUS YEAR
----- -------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
r01 NET SALES 27,567,332 100 18,281,743 100
r21 DOMESTIC 8,078,531 29 5,515,306 30
r22 FOREIGN 19,488,801 71 12,766,437 70
r23 TRANSLATED INTO DOLLARS (***) 1,859,864 1,143,986
r08 OTHER INCOME AND (EXPENSE), NET 52,951 100 45,660 100
r49 OTHER INCOME AND (EXPENSE), NET 61,641 116 45,660 100
r34 EMPLOYEES' PROFIT SHARING EXPENSES 8,690 16 0 0
r35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
r06 COMPREHENSIVE FINANCING RESULT (233,514) 100 207,820 100
r24 INTEREST EXPENSE 29,218 (13) 19,465 9
r42 GAIN (LOSS) ON RESTATEMENT OF UDI'S 0 0 0 0
r45 OTHER FINANCE COSTS 0 0 0 0
r26 INTEREST INCOME 110,125 (47) 237,309 114
r46 OTHER FINANCIAL PRODUCTS 0 0 0 0
r25 FOREIGN EXCHANGE GAIN (LOSS), NET (314,421) 135 (2,414) (1)
r28 RESULT FROM MONETARY POSITION 0 0 (7,610) (4)
r10 INCOME TAXES 1,208,615 100 740,233 100
r32 INCOME TAX 437,736 36 269,763 36
r33 DEFERRED INCOME TAX 770,879 64 470,470 64
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
REF
R CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
r36 TOTAL SALES 27,900,486 18,531,117
r37 TAX RESULT FOR THE YEAR 0 0
r38 NET SALES (**) 33,391,683 23,181,135
r39 OPERATION INCOME (**) 3,776,816 2,624,836
r40 NET INCOME OF MAJORITY INTEREST (**) 1,845,140 1,657,619
r41 NET CONSOLIDATED INCOME (**) 2,315,149 1,847,690
r47 OPERATIVE DEPRECIATION AND AMORTIZATION 430,097 379,376
(**) RESTATED INFORMATION FOR THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
FROM JULY 1 TO SEPTEMBER 30 OF 2008 AND 2007
(thousands of Mexican pesos)
REF
R CATEGORIES CURRENT YEAR PREVIOUS YEAR
----- ---------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
r01 NET SALES 10,532,672 100 5,724,861 100
r02 COST OF SALES 8,725,802 83 4,927,139 86
r03 GROSS PROFIT 1,806,870 17 797,722 14
r04 OPERATING EXPENSES 563,612 5 353,397 6
r05 OPERATING INCOME 1,243,258 12 444,325 8
r08 OTHER INCOME AND (EXPENSE), NET 48,981 0 27,444 0
r06 COMPREHENSIVE FINANCING RESULT 24,944 0 91,254 2
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 1,317,183 13 563,023 10
r10 INCOME TAXES 483,004 5 198,013 3
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 834,179 8 365,010 6
r14 DISCONTINUED OPERATIONS 0 0 0 0
r18 NET CONSOLIDATED INCOME 834,179 8 365,010 6
r19 NET INCOME OF MINORITY INTEREST 218,301 2 15,921 0
r20 NET INCOME OF MAJORITY INTEREST 615,878 6 349,089 6
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
REF
R CONCEPTS CURRENT YEAR PREVIOUS YEAR
----- -------- -------------------------- -----------------------
AMOUNT % AMOUNT %
---------- --- ---------- ---
rt01 NET SALES 10,532,672 100 5,724,861 100
rt21 DOMESTIC 3,216,177 31 1,695,587 30
rt22 FOREIGN 7,316,495 69 4,029,274 70
rt23 TRANSLATED INTO DOLLARS (***) 707,023 372,989
rt08 OTHER INCOME AND (EXPENSE), NET 48,981 100 27,444 100
rt49 OTHER INCOME AND (EXPENSE), NET 46,956 96 27,444 100
rt34 EMPLOYEES' PROFIT SHARING EXPENSES (2,025) (4) 0 0
rt35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
rt06 COMPREHENSIVE FINANCING RESULT 24,944 100 91,254 100
rt24 INTEREST EXPENSE 14,938 60 5,859 6
rt42 GAIN (LOSS) ON RESTATEMENT OF UDI'S 0 0 0 0
rt45 OTHER FINANCE COSTS 0 0 0 0
rt26 INTEREST INCOME 3,516 14 99,329 109
rt46 OTHER FINANCIAL PRODUCTS 0 0 0 0
rt25 FOREIGN EXCHANGE GAIN (LOSS), NET 36,366 146 28,955 32
rt28 RESULT FROM MONETARY POSITION 0 0 (31,171) (34)
rt10 INCOME TAXES 483,004 100 198,013 100
rt32 INCOME TAX 54,460 11 (46,333) (23)
rt33 DEFERRED INCOME TAX 428,544 89 244,346 123
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
QUARTERLY STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
REF
RT CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
rt47 OPERATIVE DEPRECIATION AND ACCUMULATED
IMPAIRMENT LOSSES 163,935 124,861
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
FROM JANUARY 1 TO SEPTEMBER 30 OF 2008 AND 2007
(thousands of pesos)
REF
C CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
c01 CONSOLIDATED NET INCOME 2,351,153 1,660,779
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 1,650,976 849,846
c03 RESOURCES FROM NET INCOME FOR THE YEAR 4,002,129 2,510,625
c04 RESOURCES PROVIDED OR USED IN OPERATION (2,595,144) (479,494)
c05 RESOURCES PROVIDED BY (USED FOR) OPERATING ACTIVITIES 1,406,985 2,031,131
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING ACTIVITIES 574,690 (44,769)
c07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING ACTIVITIES 1,169,156 2,420,163
c08 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING ACTIVITIES 1,743,846 2,375,394
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (8,925,457) (522,058)
c10 NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS (5,774,626) 3,884,467
c11 CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNING OF PERIOD 6,396,155 2,204,032
c12 CASH AND SHORT TERM INVESTMENTS AT THE END OF PERIOD 621,529 6,088,499
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)
REF
C CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 1,650,976 849,846
c13 DEPRECIATION AND AMORTIZATION FOR THE YEAR 430,097 379,376
c41 + (-) OTHER ITEMS 1,220,879 470,470
c04 RESOURCES PROVIDED OR USED IN OPERATION (2,595,144) (479,494)
c18 + (-) DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE (1,402,864) (411,553)
c19 + (-) DECREASE (INCREASE) IN INVENTORIES (3,053,291) (307,364)
c20 + (-) DECREASE (INCREASE) IN OTHER ACCOUNTS RECEIVABLE (12,484) (15,161)
c21 + (-) INCREASE (DECREASE) IN SUPPLIERS 1,864,394 452,972
c22 + (-) INCREASE (DECREASE) IN OTHER LIABILITIES 9,101 (198,388)
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING ACTIVITIES 574,690 (44,769)
c23 + BANK FINANCING 1,483,366 0
c24 + STOCK MARKET FINANCING (56) (62)
c25 + DIVIDEND RECEIVED 0 0
c26 OTHER FINANCING 0 0
c27 BANK FINANCING AMORTIZATION (927,583) 0
c28 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
c29 (-) OTHER FINANCING AMORTIZATION 0 0
c42 + (-) OTHER ITEMS 18,963 (44,707)
C07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING ACTIVITIES 1,169,156 2,420,163
c30 + (-) INCREASE (DECREASE) IN CAPITAL STOCK 112,269 267,163
c31 (-) DIVIDENDS PAID 0 0
c32 + PREMIUM ON ISSUANCE OF SHARES 1,056,887 2,153,000
c33 + CONTRIBUTION FOR FUTURE CAPITAL INCREASES 0 0
c43 + (-) OTHER ITEMS 0 0
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (8,925,457) (522,058)
c34 + (-) DECREASE (INCREASE) IN PERMANENT INVESTMENTS (8,470,226) 0
c35 (-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT (377,014) (466,267)
c36 (-) INCREASE IN CONSTRUCTION PROGRESS 0 0
c37 + SALE OF OTHER PERMANENT INVESTMENTS 0 0
c38 + SALE OF TANGIBLE FIXED ASSETS 0 0
c39 + (-) OTHER ITEMS (78,217) (55,791)
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATE OF CASH FLOW (INDIRECT METHOD)
FROM JANUARY 1 TO SEPTEMBER 30 OF 2008 AND 2007
(thousands of pesos)
REF
C CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
ACTIVITIES OF OPERATION
e01 INCOME (LOSS) BEFORE INCOME TAXES 3,559,768 2,401,012
e02 + (-) ITEMS NOT REQUIRING CASH 450,000 0
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 319,972 142,067
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES 29,218 19,465
e05 CASH FLOW BEFORE INCOME TAX 4,358,958 2,562,544
e06 CASH FLOW PROVIDED OR USED IN OPERATION (3,032,880) (749,257)
e07 CASH FLOW PROVIDED OF OPERATING ACTIVITIES 1,326,078 1,813,287
INVESTMENT ACTIVITIES
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (8,802,003) (284,749)
e09 CASH FLOW AFTER INVESTING ACTIVITIES (7,475,925) 1,528,538
FINANCING ACTIVITIES
e10 NET CASH FROM FINANCING ACTIVITIES 1,714,628 2,355,929
e11 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (5,761,297) 3,884,467
e12 TRANSLATION DIFFERENCES IN CASH AND CASH EQUIVALENTS (13,329) 0
e13 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 6,396,155 2,204,032
e14 CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 621,529 6,088,499
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
STATE OF CASH FLOW (INDIRECT METHOD)
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)
REF
C CONCEPTS CURRENT YEAR PREVIOUS YEAR
--- -------- ------------ -------------
AMOUNT AMOUNT
------------ -------------
e02 + (-) ITEMS NOT REQUIRING CASH 450,000 0
e15 + ESTIMATES FOR THE PERIOD 0 0
e16 + PROVISIONS FOR THE PERIOD 450,000 0
e17 + (-) OTHER UNREALIZED ITEMS 0 0
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 319,972 142,067
e18 + DEPRECIATION AND AMORTIZATION FOR THE PERIOD 430,097 379,376
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 (110,125) (237,309)
e24 (-) + OTHER ITEMS 0 0
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES 29,218 19,465
e25 + ACCRUED INTEREST 29,218 19,465
e26 + (-) OTHER ITEMS 0 0
e06 CASH FLOW PROVIDED OR USED IN OPERATION (3,032,880) (749,257)
e27 + (-) DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE (1,402,864) (411,553)
e28 + (-) DECREASE (INCREASE) IN INVENTORIES (3,053,291) (307,364)
e29 + (-)DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLES (12,484) (15,161)
e30 + (-) INCREASE DECREASE IN SUPPLIERS 1,864,394 452,972
e31 + (-)INCREASE DECREASE IN OTHER LIABILITIES (174,105) (198,388)
e32 + (-) INCOME TAXES PAID OR RETURNED (254,530) (269,763)
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (8,802,003) (284,749)
e33 (-) PERMANENT INVESTMENT IN SHARES (8,470,226) 0
e34 + DISPOSITION OF PERMANENT INVESTMENT IN SHARES 0 0
e35 (-) INVESTMENT IN PROPERTY PLANT AND EQUIPMENT (377,014) (466,267)
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 110,125 237,309
e43 + (-) DECREASE (INCREASE) ADVANCES AND LOANS TO THIRD PARTS 0 0
e44 + (-) OTHER ITEMS (64,888) (55,791)
e10 NET CASH FROM FINANCING ACTIVITIES 1,714,628 2,355,929
e45 + BANK FINANCING 1,483,366 0
e46 + STOCK MARKET FINANCING (56) (62)
e47 + OTHER FINANCING 0 0
e48 (-) BANK FINANCING AMORTIZATION (927,583) 0
e49 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
e50 (-) OTHER FINANCING AMORTIZATION 0 0
e51 + (-) INCREASE (DECREASE ) IN CAPITAL STOCK 112,269 267,163
e52 (-) DIVIDENDS PAID 0 0
e53 + PREMIUM ON ISSUANCE OF SHARES 1,056,887 2,153,000
e54 + CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0
e55 (-) INTEREST EXPENSE (29,218) (19,465)
e56 (-) REPURCHASE OF SHARES 0 0
e57 + (-) OTHER ITEMS 18,963 (44,707)
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
DATE PER SHARE
CONSOLIDATED
REF QUARTER OF PRESENT QUARTER OF PREVIOUS
D CATEGORIES FINANCIAL YEAR FINANCIAL YEAR
--- ---------- ------------------ -------------------
d01 BASIC PROFIT PER ORDINARY SHARE (**) $ 3.85 $ 3.64
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 (**) $ 3.85 $ 3.64
d05 DISCONTINUED OPERATIONS EFFECT ON EARNING (LOSS) PER SHARE (**) $ 0.00 $ 0.00
d08 CARRYING VALUE PER SHARE $35.68 $30.97
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 0.90 times 1.24 times
d12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE 8.32 times 10.54 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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
RATIOS
CONSOLIDATED
REF QUARTER OF PRESENT QUARTER OF PREVIOUS
P CATEGORIES FINANCIAL YEAR FINANCIAL YEAR
--- ---------- ------------------ -------------------
YIELD
p01 NET INCOME TO NET SALES 8.53% 9.08%
p02 NET INCOME TO STOCKHOLDERS' EQUITY (**) 11.19% 10.77%
p03 NET INCOME TO TOTAL ASSETS (**) 7.51% 8.07%
p04 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0.00% 0.00%
p05 INCOME DUE TO MONETARY POSITION TO NET INCOME 0.00% (0.46%)
ACTIVITY
p06 NET SALES TO NET ASSETS (**) 1.08 times 1.01 times
p07 NET SALES TO FIXED ASSETS (**) 3.51 times 2.93 times
p08 INVENTORIES TURNOVER (**) 3.37 times 3.94 times
p09 ACCOUNTS RECEIVABLE IN DAYS OF SALES 36 days 34 days
p10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 6.14% 15.72%
LEVERAGE
p11 TOTAL LIABILITIES TO TOTAL ASSETS 32.83% 25.08%
p12 TOTAL LIABILITIES TO STOCKHOLDERS' EQUITY 0.49 times 0.33 times
p13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 43.90% 40.60%
p14 LONG-TERM LIABILITIES TO FIXED ASSETS 0.00% 0.00%
p15 OPERATING INCOME TO INTEREST PAID 128.01 times 110.33 times
p16 NET SALES TO TOTAL LIABILITIES (**) 3.30 times 4.04 times
LIQUIDITY
p17 CURRENT ASSETS TO CURRENT LIABILITIES 2.27 times 4.58 times
p18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 0.94 times 2.89 times
p19 CURRENT ASSETS TO TOTAL LIABILITIES 1.39 times 2.52 times
p20 AVAILABLE ASSETS TO CURRENT LIABILITIES 10.00% 192.55%
(**) IN THESE RATIOS FOR THE DATA TAKE INTO CONSIDERATION THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 2 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
DIRECTOR REPORT
CONSOLIDATED
Acquisition of Corporacion Aceros DM, S.A. de C.V.
On February 21, 2008, we entered into an agreement to acquire 100% of the shares
of Corporacion Aceros DM, S.A. de C.V. and certain of its affiliates ("Grupo
San"), and on May 30, 2008 said acquisition was consummated. Grupo San is a long
products steel mini-mill and the second-largest corrugated rebar producer in
Mexico. Grupo San's operations are based in San Luis Potosi, Mexico. Its plants
and 1,450 employees produce 600 thousand tons of finished products annually.
With this acquisition, Simec and Industrias CH, S.A.B. de C.V. ("ICH") position
themselves as the second-largest producer of rebar and the largest steel
producer in Mexico, with a production capacity of approximately 4.5 million tons
of liquid steel and 3.8 million tons of finished products.
With this strategic acquisition, Simec and ICH will achieve a more diversified
product mix, with 40% of sales in Mexico and 60% outside Mexico, both of which
will allow them to better address the natural cycles of the steel industry on
the domestic and global levels. Additionally, Simec has already identified
significant synergies and economies of scale that will increase the company's
operating margins. Grupo San's central location in San Luis Potosi, where Simec
is not currently present, also represents a strong competitive advantage since
it provides several strategic benefits mainly related to distribution, given its
proximity to Mexico's main cities, sea ports, and borders.
In addition, Grupo San has aggressive expansion plans in its rebar business,
which ICH and Simec will support and promote to satisfy the growing demand for
this product, resulting from the Mexican Government's aggressive infrastructure
plan.
The financial statements of Simec include the operations of Grupo San since June
1, 2008.
Pursuant to Mexican Financial Reporting Standards "Bulletin B-7 Acquisitions of
Business," Simec is in the process of calculating the goodwill and other
intangible assets in the acquisition of Grupo San.
Nine-Month Period Ended September 30, 2008 compared to Nine-Month Period Ended
September 30, 2007
Net Sales
Net sales increased 51% to Ps. 27,567 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. 1,586 million) compared to Ps. 18,282 million in the
same period of 2007. Shipments of finished steel products increased 17% to 2
million 357 thousand tons in the nine-month period ended September 30, 2008
(including the net sales generated by the newly acquired plants of Grupo San of
144 thousand tons) compared to 2 million 18 thousand tons in the same period of
2007. Total sales outside of Mexico in the nine-month period ended September 30,
2008 increased 53% to Ps. 19,489 million (including the net sales generated by
the newly acquired plants of Grupo San of Ps. 97 million) compared with Ps.
12,767 million in the same period of 2007, while total Mexican sales increased
46% from Ps. 5,515 million in the nine-month period ended September 30, 2007 to
Ps. 8,078 million in the same
period of 2008 (including the net sales generated by the newly acquired plants
of Grupo San of Ps. 1,489 million). The increase in sales can be explained due
to higher shipments during the nine-month period ended September 30, 2008,
compared with the same period in 2007 (339,000 tons increase) and 29% increase
in the average price of steel products.
Direct Cost of Sales
Direct cost of sales increased 49% from Ps. 15,063 million in the nine-month
period ended September 30, 2007 to Ps. 22,469 million in the same period 2008
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 970 million). Direct cost of sales as a percentage of net sales
represented 82% in the nine-month period ended September 30, 2008 compared to
82% in the same period of 2007. The increase in the direct cost of sales is
attributable mainly to an increase of 28% in the average cost of raw materials
used to produce steel products in the nine-month period ended September 30, 2008
versus the same period of 2007, primarily as a result of increases in the price
of scrap and certain other raw materials, as well as a 17% increase in
shipments.
Gross Profit
Gross profit in the nine-month period ended September 30, 2008 was Ps. 5,098
million (including the gross profit generated by the newly acquired plants of
Grupo San of Ps. 616 million) compared to Ps. 3,219 million in the same period
of 2007. Gross profit as a percentage of net sales in the nine-month period
ended September 30, 2008 was 18% compared to 18% in the same period of 2007.
This increase in gross profit was principally due to an increase of 17% in sales
volume.
Operating Expenses
Operating expenses increased 27% to Ps. 1,358 million in the nine-month period
ended September 30, 2008 (including the operating expenses by the newly acquired
plants of Grupo San of Ps. 202 million) compared to Ps. 1,071 million in the
same period of 2007 and represented 5% of net sales in the nine-month period
ended September 30, 2008 and 6% of net sales in the same period of 2007.
Operating Profit
Operating profit increased 74% to Ps. 3,740 million in the nine-month period
ended September 30, 2008 (including the operating profit by the newly acquired
plants of Grupo San of Ps. 414 million) compared to Ps. 2,148 million in the
same period of 2007. Operating profit as a percentage of net sales was 14% in
the nine-month period ended September 30, 2008 compared to 12% in the same
period of 2007. The increase in the operating profit was due principally to an
increase of 17% in sales volume.
Comprehensive Financial Cost
Comprehensive financial cost in the nine-month period ended September 30, 2008
represented an expense of Ps. 233 million compared with a gain of Ps. 208
million in the same period of 2007. Net interest income was Ps. 81 million in
the nine-month period ended September 30, 2008 compared with net interest income
of Ps. 218 million in the same period of 2007, reflecting the use of cash and
debt for the acquisition of Grupo San. At the same time, we registered an
exchange loss of Ps. 314 million in the nine-month period ended September 30,
2008 compared with an exchange loss of Ps. 2 million in the same period of 2007,
reflecting a 0.7% increase in the value of the peso versus the dollar at
September 30, 2008 compared to December 31, 2007.
Other Expenses (Income) net
The company recorded other income net of Ps. 53 million in the nine-month period
ended September 30, 2008 compared to other income net of Ps. 45 million in the
same period of 2007.
Income Taxes
Income Taxes recorded Ps. 1,209 million in the nine-month period ended September
30, 2008 compared to Ps. 740 million in the same period of 2007.
Net Profit
As a result of the foregoing, net profit increased by 42% to Ps. 2,351 million
in the nine-month period ended September 30, 2008 from Ps. 1,661 million in the
same period of 2007.
Liquidity and Capital Resources
At September 30, 2008, Simec's total consolidated debt consisted of U.S. $54.8
million; U.S. $30 million is a credit bank, U.S. $21.5 million is a credit from
GE Capital and U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998
(accrued interest at September 30, 2008 was U.S. $380,583). At December 31,
2007, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8%
medium-term notes ("MTN's") due 1998 (accrued interest at December 31, 2007 was
U.S. $363,703).
Net resources provided by operations were Ps. 1,407 million in the nine-month
period ended September 30, 2008 versus Ps. 2,031 million of net resources
provided by operations in the same period of 2007. Net resources provided by
financing activities were Ps. 1,744 million in the nine-month period ended
September 30, 2008 (which amount includes the capital increase of Ps. 1,169
million in July 2008) versus Ps. 2,375 million of net resources provided by
financing activities in the same period of 2007 (which amount includes the
capital increase of Ps. 2,420 million in February 2007). Net resources used in
investing activities (to acquire property, plant and equipment, other
non-current assets and liabilities) were Ps. 8,925 million in the nine-month
period ended September 30, 2008 (which amount includes Ps. 8,437 million used in
the acquisition of Grupo San) versus net resources used in investing activities
(to acquire property, plant and equipment and other non-current assets and
liabilities) of Ps. 522 million in the same period of 2007.
Comparative Third Quarter 2008 vs. Second Quarter 2008
Net Sales
Net sales increased 8% from Ps. 9,746 million for the second quarter 2008
(including the net sales generated by the newly acquired plants of Grupo San of
Ps. 513 million) to 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). Sales in tons of finished steel decreased 3% to 795 thousand tons in
the third quarter 2008 compared with 817 thousand tons in the second quarter
2008. The total sales outside of Mexico for the third quarter 2008 increased 8%
to Ps. 7,317 million compared with Ps. 6,749 million for the second quarter
2008. Total Mexican sales increased 7% to Ps. 3,216 million in the third quarter
2008 from Ps. 2,997 million in the second quarter 2008. Prices of finished
products sold in the third quarter 2008 increased approximately 11% compared to
the second quarter 2008.
Direct Cost of Sales
Direct cost of sales increased 13% from Ps. 7,693 million in the second quarter
2008 (including the cost of sales generated by the newly acquired plants of
Grupo San of Ps. 308 million) to Ps. 8,726 million for the third quarter 2008
(including the cost of sales generated by the newly acquired plants of Grupo San
of Ps. 663 million). With respect to sales, in the third quarter 2008, the
direct cost of sales represents 83% compared to 79% for the second quarter 2008.
The average cost of raw materials used to produce steel products increased 17%
in the third quarter 2008 versus the second quarter 2008, primarily as a result
of increases in the price of scrap and certain other raw materials
Gross Profit
Gross profit for the third quarter 2008 decreased 12% to Ps. 1,807 million
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 410 million) compared to Ps. 2,053 million in the second quarter 2008
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 205 million).
The gross profit as a percentage of net sales for the third quarter 2008 was 17%
compared with 21% for the second quarter 2008. The decrease in gross profit was
principally due to the decrease in sales volume.
Operating Expenses
Operating expenses increased 30% to Ps. 564 million in the third quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 149 million) compared to Ps. 434 million for the second quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 53 million). Operating expenses as a percentage of net sales represented 5%
during the third quarter 2008 compared to 4% in the second quarter 2008.
Operating Profit
Operating profit decreased 23% from Ps. 1,619 million in the second quarter 2008
(including the operating profit by the newly acquired plants of Grupo San of Ps.
152 million) to Ps. 1,243 million for the third quarter 2008 (including the
operating profit by the newly acquired plants of Grupo San of Ps. 261 million).
The operating profit as a percentage of net sales in the third quarter 2008 was
12% compared to 17% in the second quarter 2008. The decrease in operating profit
was principally due to the decrease in tons shipped.
Comprehensive Financial Cost
Comprehensive financial cost for the third quarter 2008 represented an income of
Ps. 25 million compared with an expense of Ps. 197 million for the second
quarter 2008. Net interest expense was Ps. 11 million in the third quarter 2008
compared with Ps. 37 million of net interest income in the second quarter 2008.
At the same time, we registered an exchange gain of Ps. 36 million in the third
quarter 2008 compared with an exchange loss of Ps. 234 million in the second
quarter 2008.
Other Expenses (Income) net
The company recorded other income net of Ps. 49 million in the third quarter
2008 compared with other expense net of Ps. 2 million for the second quarter
2008.
Income Taxes
Income taxes for the third quarter 2008 was an expense of Ps. 483 million
compared to Ps. 495 million of expense for the second quarter 2008.
Net Profit
As a result of the foregoing, net profit was Ps. 834 million in the third
quarter 2008 compared to Ps. 925 million of net profit in the second quarter
2008.
Comparative Third Quarter 2008 vs. Third Quarter 2007
Net Sales
Net sales increased 84% from Ps. 5,725 million for the third quarter 2007
compared with Ps. 10,533 million for the same period in 2008 (including the net
sales generated by the newly acquired plants of Grupo San of Ps. 1,073 million).
Sales in tons of finished steel increased 25% to 795 thousand tons in the third
quarter 2008 compared with 635 thousand tons in the same period 2007. The total
sales outside of Mexico for the third quarter 2008 increased 82% to Ps. 7,317
million compared with Ps. 4,029 million for the same period 2007. Total Mexican
sales increased 90% to Ps. 3,216 million in the third quarter 2008 from Ps.
1,696 millions in the same period 2007. Prices of finished products sold in the
third quarter 2008 increased approximately 47% compared to the third quarter
2007.
Direct Cost of Sales
Direct cost of sales increased 77% from Ps. 4,927 million in the third quarter
2007 to Ps. 8,726 million for the same period 2008 (including the cost of sales
generated by the newly acquired plants of Grupo San of Ps. 663 million). With
respect to sales, in the third quarter 2008, the direct cost of sales represents
83% compared to 86% for the same period 2007. The average cost of raw materials
used to produce steel products increased 41% in the third quarter 2008 versus
the third quarter 2007, primarily as a result of increases in the price of scrap
and certain other raw materials.
Gross Profit
Gross profit for the third quarter 2008 increased 126% to Ps. 1,807 million
(including the gross profit generated by the newly acquired plants of Grupo San
of Ps. 410 million) compared to Ps. 798 million in the same period 2007. The
gross profit as a percentage of net sales for the third quarter 2008 was 17%
compared with 14% for the same period 2007. The increase in gross profit was
principally due to the increase in tons shipped.
Operating Expenses
Operating expenses increased 60% to Ps. 564 million in the third quarter 2008
(including the operating expenses by the newly acquired plants of Grupo San of
Ps. 149 million) compared to Ps. 353 million for the same period 2007. Operating
expenses as a percentage of net sales represented 5% during the third quarter
2008 compared to 6% of the same period 2007.
Operating Profit
Operating profit increased 179% from Ps. 445 million in the third quarter 2007
to Ps. 1,243 million for the same period 2008 (including the operating profit by
the newly acquired plants of Grupo San of Ps. 261 million). The operating profit
as a percentage of net sales in the third quarter 2008 was 12% compared to 8% in
the same period 2007. The increase in operating profit was due principally to an
increase of 25% in sales volume.
Comprehensive Financial Cost
Comprehensive financial cost for the third quarter 2008 represented a gain of
Ps. 25 million compared with a gain of Ps. 91 million for the third quarter
2007. Net interest expense was Ps. 11 million in the third quarter 2008 compared
with Ps. 93 million in the third quarter 2007. At the same time, we registered
an exchange gain of Ps. 36 million in the third quarter 2008 compared with an
exchange gain of Ps. 29 million in the third quarter 2007.
Other Expenses (Income) net
The company recorded other income net of Ps. 49 million for the third quarter
2008 compared with other income net of Ps. 27 million for the same period 2007.
Income Taxes
Income taxes for the third quarter 2008 increased to Ps. 483 million compared to
Ps. 198 million for the same period 2007.
Net Profit
As a result of the foregoing, net profit increased by 128% to Ps. 834 million in
the third quarter 2008 from Ps. 365 million in the third quarter 2007.
2008
Nine months ended Nine months ended vs.
September 30, 2008 September 30, 2007 2007
------------------ ------------------ ----
Sales 27,567 18,282 51%
Cost of Sales 22,469 15,063 49%
Gross Profit 5,098 3,219 58%
Operating Expenses 1,358 1,071 27%
Operating Profit 3,740 2,148 74%
EBITDA 4,170 2,527 65%
Net Profit 2,351 1,661 42%
Sales Outside Mexico 19,489 12,767 53%
Sales in Mexico 8,078 5,515 46%
Total Sales (tons) 2,357 2,018 17%
3Q08 vs. 3Q08 vs.
(Millions of pesos) 3Q08 2Q08 3Q07 2Q08 3Q07
------------------------ ------ ----- ----- -------- --------
Sales 10,533 9,746 5,725 8% 84%
Cost of Sales 8,726 7,693 4,927 13% 77%
Gross Profit 1,807 2,053 798 (12%) 126%
Operating Expenses 564 434 353 30% 60%
Operating Profit 1,243 1,619 445 (23%) 179%
EBITDA 1,407 1,755 569 (20%) 147%
Net Profit 834 925 365 (10%) 128%
Sales Outside Mexico 7,317 6,749 4,029 8% 82%
Sales in Mexico 3,216 2,997 1,696 7% 90%
Total Sales (tons) 795 817 635 (3%) 25%
Thousands of Millions of Average price Thousands of Millions of Average price
tons nine pesos nine per ton nine tons nine pesos nine per ton nine
months ended months ended months ended months ended months ended months ended
September 30, September 30, September 30, September 30, September 30, September 30,
Product 2008 2008 2008 2007 2007 2007
---------------- ------------- ------------- ------------- ------------- ------------- -------------
SBQ 1,699 20,731 12,202 1,449 13,895 9,589
Light Structural 142 1,448 10,197 217 1,705 7,857
Structural 150 1,608 10,720 171 1,395 8,158
Rebar 321 3,198 9,963 180 1,247 6,928
Others 45 582 -- 1 401 --
Total 2,357 27,567 11,696 2,018 18,282 9,059
Thousands Millions Average Thousands Millions Average Thousands Millions Average
of tons of pesos price per of tons of pesos price per of tons of pesos price per
Product 3Q08 3Q08 ton 3Q08 2Q08 2Q08 ton 2Q08 3Q07 3Q07 ton 3Q07
------- --------- -------- --------- --------- -------- --------- --------- -------- ---------
SBQ 555 7,858 14,159 579 7,124 12,304 467 4,429 9,484
Light Structural 41 482 11,756 47 512 10,894 60 487 8,117
Structural 40 488 12,200 55 616 11,200 50 400 8,000
Rebar 127 1,324 10,425 124 1,325 10,685 58 388 6,690
Others 32 381 -- 12 169 -- -- 21 --
Total 795 10,533 13,249 817 9,746 11,929 635 5,725 9,016
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: 2 YEAR: 2008
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 Compania Siderurgica de California, 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.
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 - 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.
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 costs.
Derivative financial instruments are recognized in the balance sheet at fair
value, which is initially represented by the amount of consideration agreed on.
Such fair value is restated at the end of each month based on the new estimate.
The Company periodically evaluates the changes in the cash flows of derivative
instruments to analyze if the swaps are highly effective for mitigating the
exposure to natural gas price fluctuations. In 2008, 2007 and 2006, the fair
value of derivatives not qualifying as accounting hedging instruments was
recorded currently against results of operations in the year. In the case of
instruments qualifying as derivative accounting hedging instruments of the cash
flow type, the fair value and subsequent changes were recorded under
stockholders' equity as Comprehensive income, net of the deferred tax effect.
The effectiveness of hedging instruments is determined at the time the
derivative financial instruments are designated as hedging, and this is
evaluated periodically. A highly effective instrument is such in which the
changes in the fair value of cash flows of primary position are offset on a
periodic or cumulative basis, by the changes in the fair value or cash flows of
the hedging instruments within a range of 80% and 125%.
At September 30, 2008, the Company has contracts for hedging risks associated
with natural gas prices, that are estimated and recognized according to the MFRS
C-10 "Derivative Financial Instruments".
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, 2008 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
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, 2008
sales to five customers accounted for approximately 29.8% 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:
At September 30, 2008, Simec's total consolidated debt consisted of U.S. $54.8
million; U.S. $30 million is a credit bank, U.S. $21.5 million is a credit from
GE Capital and U.S. $302,000 of 8 7/8% medium-term notes ("MTN's") due 1998
(accrued interest at September 30, 2008 was U.S. $380,583). At December 31,
2007, Simec's total consolidated debt consisted of U.S. $302,000 of 8 7/8%
medium-term notes ("MTN's") due 1998 (accrued interest at December 31, 2007 was
U.S. $363,703).
(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. 11,804 (U.S. $1,093,762) at September 30,
2008, (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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
RELATIONS OF SHARES INVESTMENTS
CONSOLIDATED
NUMBER
COMPANY NAME MAIN ACTIVITIES OF SHARES OWNERSHIP
------------ --------------- --------- ---------
SUBSIDIARIES
Cia Siderurgica de Guadalajara Sub-Holding 99.99
Simec International Production and sales of steel products 99.99
Arrendadora Simec Production and sales of steel products 100.00
Controladora Simec 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
PAV Republic 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 Production and sales of steel products 100.00
Productos Siderurgicos 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
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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CREDITS BREAK DOWN
(THOUSANDS OF MEXICAN PESOS)
CONSOLIDATED
Denominated in Pesos Denominated in Foreign Currency
Credit Type / Amortization Rate of (Thousands of Pesos) (Thousands of Pesos)
Institution Date Interest Time Interval Time Interval
------------- ------------ -------- -------------------------------------------- --------------------------------------------
Until Until
5 5
Until Until Until Until Years Until Until Until Until Years
Current 1 2 3 4 or Current 1 2 3 4 or
Year Year Years Years Years More Year Year Years Years Years More
--------- ----- ----- ----- ----- ----- ------- ----- ----- ----- ----- -----
BANKS
Banco Inbursa, Libor +
S.A. 29/05/2009 1.45 0 0 0 0 0 0 0 323,757 0 0 0 0
Libor +
GE Capital 20/05/2009 0.25 232,026
TOTAL BANKS 0 0 0 0 0 0 0 555,783 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 3,226 0 0 0 0 0
TOTAL STOCK
EXCHANGE 0 0 0 0 0 0 3,226 0 0 0 0 0
SUPPLIERS
Various 733,014 0 0 0 0 0 3,481,337 0 0 0 0 0
TOTAL SUPPLIERS 733,014 0 0 0 0 3,481,337 0 0 0 0 0
OTHER LOANS WITH
COST
TOTAL 0 0 0 0 0 0 0 0 0 0 0 0
OTHER CURRENT
LIABILITIES
WITHOUT COST
Various 596,440 0 0 0 0 0 400,455 0 0 0 0 0
TOTAL 596,440 0 0 0 0 0 400,455 0 0 0 0 0
TOTAL 1,329,454 0 0 0 0 0 3,885,018 555,783 0 0 0 0
NOTES: The exchange rate of the peso to the U.S. Dollar at September 30, 2008
was Ps. 10.7919
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
MONETARY FOREIGN CURRENCY POSITION
(Thousands of Mexican Pesos)
CONSOLIDATED
DOLLARS OTHER CURRENCIES TOTAL
--------------------------- --------------------------- ---------
THOUSANDS THOUSANDS THOUSANDS THOUSANDS THOUSANDS
FOREIGN CURRENCY POSITION OF DOLLARS OF PESOS OF DOLLARS OF PESOS OF PESOS
------------------------- ---------- --------- ---------- --------- ---------
TOTAL ASSETS 333,756 3,601,849 1 16 3,601,865
LIABILITIES POSITION 411,190 4,437,522 304 3,279 4,440,801
SHORT TERM LIABILITIES POSITION 411,190 4,437,522 304 3,279 4,440.801
LONG TERM LIABILITIES POSITION 0 0 0 0 0
NET BALANCE (77,434) (835,673) (303) (3,263) (838,936)
NOTES
THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT SEPTEMBER 30, 2008 WAS
PS. 10.7919
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
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 2.27 times.
B) Accomplished the actual situation is 0.33
C) Accomplished the actual situation is 142.73
As of September 30, 2008, the remaining balance of the MTNs not exchanged
amounts to Ps. 3,226 ($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: 2008
GRUPO SIMEC, S.A.B. DE C.V.
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
CONSOLIDATED
PLANT UTILIZATION
PLANT OR CENTER ECONOMIC ACTIVITY CAPACITY (%)
--------------- ----------------- -------- -----------
GUADALAJARA MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 480 83.21
MEXICALI MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS 250 88.06
INDUSTRIAS DEL ACERO Y DEL ALAMBRE SALE OF STEEL PRODUCTS 0 0
APIZACO AND CHOLULA PLANTS PRODUCTION AND SALES OF STEEL PRODUCTS 460 88.10
CANTON CASTER FACILITY PRODUCTION OF BILLET 1,380 69.30
LORAIN CASTER FACILITY PRODUCTION OF BILLET 1,150 86.90
LORAIN HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 840 78.70
LACKAWANNA HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS 600 85.00
MASSILLON COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 125 79.30
GARY COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 70 51.90
ONTARIO COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS 60 50.60
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
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 26.90
SCRAP VARIOUS PLANTS IN MEXICO YES 54.01
PLANTS IN USA COKE VARIOUS NO 14.70
PLANTS IN USA PELLETS VARIOUS NO 8.80
FERROALLOYS VARIOUS PLANTS IN MEXICO YES 7.17
PLANTS IN USA FERROALLOYS VARIOUS NO 12.60
ELECTRODES VARIOUS PLANTS IN MEXICO VARIOUS YES 1.55
PLANTS IN USA ELECTRODES VARIOUS NO 1.00
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
CONSOLIDATED
DOMESTIC SELLS
MAIN PRODUCTS NET SALES MAIN DESTINATION
------------- --------------------- ----------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
------ ---------- ---------- ---------
STRUCTURAL PROFILES 113 1,237,651
COMMERCIAL PROFILES 42 454,464
REBAR 236 2,464,909
FLAT BAR 68 664,379
STEEL BARS 249 2,674,867
OTHER 3 143,320
BILLET 20 183,340
MALLA 9 98,365
CASTILLOS 6 76,093
ALAMBRON 7 81,143
TOTAL 8,078,531
FOREIGN SALES 19,488,801
TOTAL 27,567,332
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
CONSOLIDATED
FOREIGN SELLS
MAIN PRODUCTS NET SALES MAIN
------------- --------------------- ----------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
------ ---------- ---------- ---------
EXPORTS
STRUCTURAL PROFILES 37 370,395
COMMERCIAL PROFILES 19 184,446
REBAR 85 733,392
STEEL BARS 37 414,523
FLAT BAR 13 144,982
BILLET 0 0
FOREIGN SUBSIDIARIES
HOT-ROLLED BARS 771 9,927,650
COLD-FINISHED BARS 106 1,842,046
SEMI-FINISHED SEAMLESS
TUBE ROUNDS 311 3,223,520
OTHER SEMI-FINISHED
TRADE PRODUCTS 225 2,647,847
TOTAL 19,488,801
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CONSTRUCTION IN PROGRESS
CONSOLIDATED
THE PROJECTS IN PROGRESS AT SEPTEMBER 30, 2008, ARE:
PROJECTS IN PROGRESS TOTAL INVESTMENT
PROJECTS IN REPUBLIC 220,791
PROJECTS IN MEXICALI 144,148
PROJECTS IN TLAXCALA 18,702
PROJECTS IN GUADALAJARA 39,653
PROJECTS IN SAN LUIS (GRUPO SAN) 3,760
-------
TOTAL INVESTMENT AT SEPTEMBER 30, 2008 427,054
-------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
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
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
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 CUPON NUMBER OF SHARES (Thousands of Pesos)
------ ------- ----- --------------------------------------------------- --------------------
FIXED VARIABLE FREE
PORTION PORTION MEXICAN SUSCRIPTION 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
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
GRUPO SIMEC, S.A.B. DE C.V.
CONSOLIDATED
R20: PRO FORMA FINANCIAL INFORMATION
The following combined pro forma financial information (unaudited) is
based on the Company's historical financial statements, adjusted to
include the effects of the acquisition of Grupo San.
The pro forma information (unaudited) assumes that the acquisition was
conducted at the beginning of 2008 and 2007, respectively, and is based on
the available information and certain assumptions that management
considered reasonable.
The pro forma financial information (unaudited) is not intended to present
the results of the consolidated operations had the acquisition occurred on
such date, nor to anticipate the Company's results of operations.
Nine months Nine months
ended ended
September 30, September 30,
------------- -------------
2008 2007
------------- -------------
Net sales Ps. 30,311 Ps. 21,346
Marginal profit 6,111 3,967
Net income Ps. 2,300 Ps. 1,834
------ ------
Earnings per share 5.02 4.54
====== ======
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 3 YEAR: 2008
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 28 OF 2008.