Grupo Simec Reports 10% Revenue Decline Amid Lower Shipments and Sales Prices

Grupo Simec Faces Revenue Decline Driven by Lower Shipments and Sales Prices

Grupo Simec S.A.B. de C.V. reports a significant decline in net sales for the twelve months ending December 31, 2025, revealing a 10% drop to Ps. 30,291 million compared to Ps. 33,658 million for the same period in the previous year. The decrease is primarily fueled by a 6% reduction in shipments and a 4% drop in average sales prices, highlighting challenges in both domestic and international markets. Finished steel product shipments plummet to 1,933,000 tons, down from 2,056,000 tons, underscoring the overall contraction in demand.

Geographically, Grupo Simec sees international sales decline by 14%, falling to Ps. 13,234 million from Ps. 15,388 million. Simultaneously, its domestic sales decrease by 7% to Ps. 17,057 million, down from Ps. 18,270 million. While the company grapples with reduced volumes, it also manages to improve its cost structure, leading to a decrease in cost of sales by 13% to Ps. 22,657 million, leading to a better cost of sales ratio which improves to 75% from 77% in the previous year. This strategic management of production costs, driven by lower scrap prices, enhances the gross profit margin slightly, remaining almost flat at Ps. 7,634 million compared to Ps. 7,625 million in 2024.

Despite the challenges of lower sales volumes, Grupo Simec records marginal improvements in profitability measures. Operating income increases by 1% to Ps. 5,365 million, with the operating margin enhancing to 18% from 16%. The firm's focus on cost control results in improved profit margins, showcasing resilience in a tough market. Additionally, its other net income almost doubles to Ps. 531 million, up from Ps. 279 million, reflecting the company's efforts in diversifying income sources.

In a related development, Grupo Simec reports a rise in selling, general, and administrative expenses, which increase by 8% to Ps. 2,800 million compared to Ps. 2,603 million the prior year. This increase elevates SG&A as a percentage of net sales to 9% from 8%, indicating heightened operational costs amid declining sales. Nonetheless, the company's EBITDA reflects a consistent performance, rising by 1% from the previous year, which may signal effective management strategies despite external market pressures.

As the steel industry faces fluctuations in demand, Grupo Simec remains focused on adapting its operations to stabilize profitability, showcasing its resilience amidst a challenging economic landscape.