Due to an accounting effect on taxes, the Mexican steel company Simec, with operations in Mexico, the United States and Brazil, recorded net profits of MXN 1,363 million ($77.8 million) in the fourth quarter of 2023, a figure which contrasts with net losses for the equivalent of $19.1 million in the same period of 2022, according to the company's financial balance sent to the stock markets.
With a marginal annual increase in sales volume of 0.2 percent to 535,000 metric tons (mt) of steel, although with lower sales prices, billing decreased 13.1 percent to the equivalent of $503.4 million. The company sent its financial statements to the stock market in pesos. Conversion to dollars was made using today's retail exchange rate.
Despite the contraction in billing, administrative and operating expenses increased 4.0 percent to $43.5 million. Thus, operating income decreased 16.2 percent to $97.6 million and with a 43.2 percent reduction in the financial result, profit before taxes increased 11.1 percent to $64.4 million,
In addition, an accounting effect on taxes of $13.5 million was recorded, thus net profits totaled $77.8 million for the quarter.
EBITDA decreased 17.6 percent to $109.3 million. EBITDA margin decreased 120 basis points to 21.7 percent.
In the quarter, the share of total sales in the Mexican market decreased 120 basis points to 62.3 percent and the remaining 37.7 corresponds to operations in the United States and Brazil.
In 2023, Simec sold 2.25 million mt of steel, 3.6 percent more than the volume in 2022. Billing was the equivalent of $3.1 billion, 31.4 percent more. EBITDA increased 40.3 percent to $754.3 million and net earnings increased 48.5 percent to $439.9 million.
In 2023, Simec sold $1.39 billion in the local Mexican market, of which 70.9 percent was commercial steel and 29.1 percent was special steel (SBQ). It exported $826 million, of which 75.2 percent were commercial steel.
Its companies in the United States and Brazil invoiced the equivalent of $139 million, all from special steels. It is important to remember that in August of last year, the Mexican steel company Simec announced the definitive closure of two plants of its subsidiary Republic Steel in the United States, in Ohio and New York, and with it the dismissal of 500 of its more than 2,000 workers. That production was moved to its state-of-the-art steel mill in Tlaxcala, Mexico.
At the end of 2023, Simec registered a payroll of 4,260 workers, 832 people or 16.3 percent less compared to the end of 2022. The largest layoff was in office employees with 436 people to remain at 1,414, the number of workers decreased by 394 to remain at 2,794 people.