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
For the month of May, 2006.
Group Simec, Inc.
--------------------------------------------------------------------------------
(Translation of Registrant's Name Into English)
Mexico
--------------------------------------------------------------------------------
(Jurisdiction of incorporation or organization)
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 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. de C.V.
______________________________
(Registrant)
Date: May 11, 2006. By: ______________________________
Name: Luis Garcia Limon
Title: Chief Executive Officer
GRUPO
SIMEC [LOGO]
PRESS RELEASE Contact: Adolfo Luna Luna
Jose Flores Flores
Grupo Simec, S.A. de C.V.
Calzada Lazaro Cardenas 601
44440 Guadalajara, Jalisco, Mexico
52 33 1057 5740
GRUPO SIMEC ANNOUNCES FINAL AUDITED RESULTS OF OPERATIONS FOR THE
YEAR ENDED DECEMBER 31, 2005
GUADALAJARA, MEXICO, May 4, 2006- Grupo Simec, S.A. de C.V. (AMEX-SIM) ("Simec")
announced today its final audited results of operations for the year ended
December 31, 2005. Net sales increased 119% to Ps. 12,883 million in 2005
compared to Ps. 5,872 million in 2004, primarily due to the inclusion for the
full year 2005 of net sales generated by the plants in Apizaco and Cholula
acquired in August 2004, of Ps. 2,732 million as well as Ps. 6,220 million
generated by the newly acquired plants of PAV Republic, Inc. ("Republic") in
July 2005. Simec recorded net income of Ps. 1,272 million in 2005 versus net
income of Ps. 1,453 million in 2004.
On July 22, 2005 Simec and its parent company Industrias CH, S.A. de C.V.
("ICH") acquired 100% of the stock of Republic. Simec, ICH's largest subsidiary,
acquired 50.2% of Republic's stock, and ICH purchased the remaining 49.8%. The
cash purchase price of U.S. $229 million was financed by internally generated
funds. At December 30, 2005, the total amount of Republic's liabilities was U.S.
$37.7 million (Ps. 407 million), with a weighted average cost per year of 5.87%.
Republic is the leading producer of special bar quality (SBQ) steel in the
United States and, together with Simec, they are the largest producer of this
kind of steel in North America.
On September 10, 2004, Simec completed the acquisition of the property, plant
and equipment and inventories, and assumed liabilities associated with seniority
premiums of employees of the Mexican steel-making facilities of Industrias
Ferricas del Norte, S.A. (Corporacion Sidenor of Spain) located in Apizaco,
Tlaxcala and Cholula, Puebla. Simec's total investment in this transaction was
approximately U.S. $135 million, funded with internally generated resources of
Simec and capital contributions from its parent company ICH of U.S. $19 million
for capital stock issued in the second quarter of 2005. Simec began to operate
the plants on August 1, 2004, and, as a result, the operations of both plants
are reflected in Simec's financial results as of such date.
Simec sold 1,711,315 metric tons of basic steel products during 2005 (including
413,925 metric tons produced by the newly acquired plants in Apizaco and Cholula
and 674,957 metric tons produced by the newly acquired plants of Republic), an
increase of 121% as compared to 773,297 metric tons in 2004 (including 155,614
metric tons produced by the newly acquired plants in Apizaco and Cholula).
Exports (including sales by U.S. subsidiaries) of basic steel products were
809,083 metric tons in 2005 (including 19,261 metric tons produced by the newly
acquired plants in Apizaco and Cholula and 674,957 metric tons generated by the
newly acquired plants of Republic) versus 97,126 metric tons in 2004.
Additionally Simec sold 14,487 metric tons of billet in 2005 as compared to
41,832 metric tons of billet in 2004. Prices of finished products (excluding the
sales of Republic) sold in 2005 decreased 14% in real terms versus 2004.
Simec's direct cost of sales increased 206% to Ps. 10,304 million in 2005
(including Ps. 2,015 million relating to the newly acquired plants in Apizaco
and Cholula and Ps. 5,863 million relating to the newly acquired plants of
Republic) compared to Ps. 3,413 million in 2004 (including Ps. 862 million
relating to the newly acquired plants in Apizaco and Cholula). The average cost
of raw materials used to produce steel products (excluding the
production of Republic) increased 1% in real terms in 2005 versus 2004,
primarily as a result of increases in the price of scrap and certain other raw
materials.
Indirect manufacturing, selling, general and administrative expenses (including
depreciation) were Ps. 1,011 million during 2005 (including Ps. 247 million
relating to the newly acquired plants in Apizaco and Cholula and Ps. 269 million
relating to the newly acquired plants of Republic), compared to Ps. 590 million
in 2004 (including Ps. 75 million relating to the newly acquired plants in
Apizaco and Cholula).
Simec's operating income decreased 16% to Ps. 1,567 million during 2005
(including Ps. 470 million relating to the newly acquired plants in Apizaco and
Cholula and Ps. 87 million relating to the newly acquired plants of Republic)
from Ps. 1,869 million in 2004 (including Ps. 296 million relating to the newly
acquired plants in Apizaco and Cholula). Operating income was 12% of net sales
in 2005 compared to 32% of net sales in 2004.
Simec recorded other income, net, from other financial operations of Ps. 55
million in 2005 compared to other expense, net, of Ps. 38 million in 2004. In
addition, Simec recorded a provision for income tax and employee profit sharing
of Ps. 190 million in 2005 versus a provision of Ps. 341 million in 2004.
Simec recorded financial expense of Ps. 144 million in 2005 compared to
financial expense of Ps. 37 million in 2004 as a result of (i) net interest
expense of Ps. 16 million in 2005 compared to Ps. 6 million of net interest
income in 2004, (ii) an exchange loss of Ps. 75 million in 2005 compared to an
exchange gain of Ps. 4 million in 2004 reflecting an increase of 4.3% in the
value of the peso versus the dollar in 2005 compared to a decrease of 0.3% in
the value of the peso versus the dollar in 2004 and (iii) a loss from monetary
position of Ps. 53 million in 2005 compared to a loss from monetary position of
Ps. 47 million in 2004, reflecting the domestic inflation rate of 3.3% in 2005
compared to the domestic inflation rate of 5.2% in 2004 and lower debt levels
during the 2005 period.
At December 31, 2005, Simec's total consolidated debt consisted of approximately
$38 million of U.S. dollar-denominated debt. At December 31, 2004, Simec had
outstanding approximately $13.9 million of U.S. dollar-denominated debt.
All figures were prepared in accordance with Mexican generally accepted
accounting principles and are stated in constant Pesos at December 31, 2005.
Simec is a mini-mill steel producer in Mexico and manufactures a broad range of
non-flat structural steel products and its subsidiary Republic is the leading
producer of special bar quality (SBQ) steel in the United States.
###
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
AT DECEMBER 31 OF 2005 AND 2004
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
---------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
---------------------------------------------------------------------------------------------------------------------------
s01 TOTAL ASSETS 14,494,344 100 9,245,551 100
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s02 CURRENT ASSETS 6,734,225 46 2,895,211 31
---------------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 208,064 1 523,341 6
---------------------------------------------------------------------------------------------------------------------------
s04 ACCOUNTS AND NOTES RECEIVABLE (NET) 2,270,920 16 995,276 11
---------------------------------------------------------------------------------------------------------------------------
s05 OTHER ACCOUNTS AND NOTES RECEIVABLE 332,535 2 181,329 2
---------------------------------------------------------------------------------------------------------------------------
s06 INVENTORIES 3,636,861 25 1,167,486 13
---------------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 285,845 2 27,779 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) 7,017,775 48 6,036,933 65
---------------------------------------------------------------------------------------------------------------------------
s13 LAND AND BUILDINGS 2,383,924 16 2,252,229 24
---------------------------------------------------------------------------------------------------------------------------
s14 MACHINERY AND INDUSTRIAL EQUIPMENT 6,434,736 44 6,121,557 66
---------------------------------------------------------------------------------------------------------------------------
s15 OTHER EQUIPMENT 178,977 1 156,204 2
---------------------------------------------------------------------------------------------------------------------------
s16 ACCUMULATED DEPRECIATION 2,500,544 17 2,504,568 27
---------------------------------------------------------------------------------------------------------------------------
s17 CONSTRUCTION IN PROGRESS 520,682 4 11,511 0
---------------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 440,753 3 313,407 3
---------------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 301,591 0 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s20 TOTAL LIABILITIES 4,927,845 100 2,442,479 100
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 2,697,754 55 939,633 38
---------------------------------------------------------------------------------------------------------------------------
s22 SUPPLIERS 1,402,696 28 608,494 25
---------------------------------------------------------------------------------------------------------------------------
s23 BANK LOANS 17,643 0 158,223 6
---------------------------------------------------------------------------------------------------------------------------
s24 STOCK MARKET LOANS 3,255 0 3,515 0
---------------------------------------------------------------------------------------------------------------------------
s25 TAXES PAYABLE 52,486 1 39,914 2
---------------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES 1,221,674 25 129,487 5
---------------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 389,021 8 0 0
---------------------------------------------------------------------------------------------------------------------------
s28 BANK LOANS 389,021 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s29 STOCK MARKET LOANS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s30 OTHER LOANS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 206,770 4 0 0
---------------------------------------------------------------------------------------------------------------------------
s32 OTHER NON-CURRENT LIABILITIES 1,634,300 33 1,502,846 62
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s33 CONSOLIDATED STOCKHOLDERS' EQUITY 9,566,499 100 6,803,072 100
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s34 MINORITY INTEREST 1,796,010 19 320 0
---------------------------------------------------------------------------------------------------------------------------
s35 MAJORITY INTEREST 7,770,489 81 6,802,752 100
---------------------------------------------------------------------------------------------------------------------------
s36 CONTRIBUTED CAPITAL 4,293,609 45 4,292,959 63
---------------------------------------------------------------------------------------------------------------------------
S79 CAPITAL STOCK 3,454,048 36 3,386,476 50
---------------------------------------------------------------------------------------------------------------------------
s39 PREMIUM ON ISSUANCE OF SHARES 839,561 9 677,661 10
---------------------------------------------------------------------------------------------------------------------------
s40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0 228,822 3
---------------------------------------------------------------------------------------------------------------------------
s41 EARNED CAPITAL 3,476,880 36 2,509,793 37
---------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 4,490,489 47 3,218,856 47
---------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,013,609) (11) (709,063) (10)
---------------------------------------------------------------------------------------------------------------------------
s80 SHARES REPURCHASED 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR:2005
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
---------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
---------------------------------------------------------------------------------------------------------------------------
s03 CASH AND SHORT-TERM INVESTMENTS 208,064 100 523,341 100
---------------------------------------------------------------------------------------------------------------------------
s46 CASH 71,486 34 177,186 34
---------------------------------------------------------------------------------------------------------------------------
s47 SHORT-TERM INVESTMENTS 136,578 66 346,155 66
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s07 OTHER CURRENT ASSETS 285,845 100 27,779 100
---------------------------------------------------------------------------------------------------------------------------
s81 DERIVATIVE FINANCIAL INSTRUMENTS 57,106 20 18,902 68
---------------------------------------------------------------------------------------------------------------------------
s82 DISCONTINUED OPERATIONS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s83 OTHER 228,739 80 8,877 32
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 440,753 100 313,407 100
---------------------------------------------------------------------------------------------------------------------------
s48 DEFERRED EXPENSES 203,096 46 237,751 76
---------------------------------------------------------------------------------------------------------------------------
s49 GOODWILL 166,988 38 0 0
---------------------------------------------------------------------------------------------------------------------------
s50 DEFERRED TAXES 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s51 OTHER 70,669 16 75,656 24
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s19 OTHER ASSETS 301,591 100 0 0
---------------------------------------------------------------------------------------------------------------------------
s84 INTANGIBLE ASSET FROM LABOR OBLIGATIONS 301,591 100 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 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s21 CURRENT LIABILITIES 2,697,754 100 939,633 100
---------------------------------------------------------------------------------------------------------------------------
s52 FOREIGN CURRENCY LIABILITIES 1,948,484 72 385,447 41
---------------------------------------------------------------------------------------------------------------------------
s53 MEXICAN PESO LIABILITIES 749,270 28 554,186 59
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s26 OTHER CURRENT LIABILITIES 1,221,674 100 129,487 100
---------------------------------------------------------------------------------------------------------------------------
s88 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s89 INTEREST LIABILITIES 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s68 PROVISIONS 15,110 1 8,880 7
---------------------------------------------------------------------------------------------------------------------------
s90 DISCONTINUED OPERATIONS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s58 OTHER CURRENT LIABILITIES 1,206,564 99 120,607 93
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s27 LONG-TERM LIABILITIES 389,021 100 0 0
---------------------------------------------------------------------------------------------------------------------------
s59 FOREIGN CURRENCY LIABILITIES 389,021 100 0 0
---------------------------------------------------------------------------------------------------------------------------
s60 MEXICAN PESO LIABILITIES 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s31 DEFERRED LIABILITIES 206,770 100 0 0
---------------------------------------------------------------------------------------------------------------------------
s65 NEGATIVE GOODWILL 206,770 100 0 0
---------------------------------------------------------------------------------------------------------------------------
s67 OTHER 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s32 OTHER NON CURRENT LIABILITIES 1,634,300 100 1,502,846 100
---------------------------------------------------------------------------------------------------------------------------
s66 DEFERRED TAXES 1,503,308 92 1,480,919 99
---------------------------------------------------------------------------------------------------------------------------
s91 OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE 15,750 1 6,957 0
---------------------------------------------------------------------------------------------------------------------------
s92 DISCONTINUED OPERATIONS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s69 OTHER LIABILITIES 115,242 7 14,970 1
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s79 CAPITAL STOCK 3,454,048 100 3,386,476 100
---------------------------------------------------------------------------------------------------------------------------
s37 CAPITAL STOCK (NOMINAL) 2,012,147 58 1,948,155 58
---------------------------------------------------------------------------------------------------------------------------
s69 RESTATEMENT OF CAPITAL STOCK 1,441,901 42 1,438,321 42
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
---------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
---------------------------------------------------------------------------------------------------------------------------
s42 RETAINED EARNINGS AND CAPITAL RESERVES 4,490,489 100 3,218,856 100
---------------------------------------------------------------------------------------------------------------------------
s93 LEGAL RESERVE 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s43 RESERVE FOR REPURCHASE OF SHARES 87,031 2 87,031 3
---------------------------------------------------------------------------------------------------------------------------
s94 OTHER RESERVES 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s95 RETAINED EARNINGS 3,131,825 70 1,678,600 52
---------------------------------------------------------------------------------------------------------------------------
s45 NET INCOME FOR THE YEAR 1,271,633 28 1,453,225 45
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT (1,013,609) 100 (709,063) 100
---------------------------------------------------------------------------------------------------------------------------
s70 ACCUMULATED MONETARY RESULT 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s71 RESULT FROM HOLDING NON-MONETARY ASSETS (153,724) 15 178,151 (25)
---------------------------------------------------------------------------------------------------------------------------
s96 CUMULATIVE RESULT FROM FOREIGN CURRENCY TRANSLATION
---------------------------------------------------------------------------------------------------------------------------
s97 CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL INSTRUMENTS
40,093 (4) 12,764 (2)
---------------------------------------------------------------------------------------------------------------------------
s98 CUMULATIVE EFFECT OF DEFERRED INCOME TAXES (899,978) 89 (899,978) 127
---------------------------------------------------------------------------------------------------------------------------
s99 LABOR OBLIGATION ADJUSTMENT 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
s100 OTHER 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
BALANCE SHEETS
OTHER CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
S
---------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
S72 WORKING CAPITAL 4,036,471 1,955,578
---------------------------------------------------------------------------------------------------------------------------
S73 PENSION FUND AND SENIORITY PREMIUMS 0 0
---------------------------------------------------------------------------------------------------------------------------
S74 EXECUTIVES (*) 51 22
---------------------------------------------------------------------------------------------------------------------------
S75 EMPLOYERS (*) 1,161 802
---------------------------------------------------------------------------------------------------------------------------
S76 WORKERS (*) 3,148 1,194
---------------------------------------------------------------------------------------------------------------------------
S77 COMMON SHARES (*) 137,929,599 133,542,984
---------------------------------------------------------------------------------------------------------------------------
S78 REPURCHASED SHARES (*) 0 0
---------------------------------------------------------------------------------------------------------------------------
S101 RESTRICTED CASH 0 0
---------------------------------------------------------------------------------------------------------------------------
S102 NET DEBT OF NON CONSOLIDATED COMPANIES 0 0
---------------------------------------------------------------------------------------------------------------------------
(*) THESE ITEMS EXPRESSED IN UNITS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
FROM JANUARY 1 TO DECEMBER 31 OF 2005 AND 2004
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
R
---------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
---------------------------------------------------------------------------------------------------------------------------
r01 NET SALES 12,882,888 100 5,872,194 100
---------------------------------------------------------------------------------------------------------------------------
r02 COST OF SALES 10,303,964 80 3,412,873 58
---------------------------------------------------------------------------------------------------------------------------
r03 GROSS PROFIT 2,578,924 20 2,459,321 42
---------------------------------------------------------------------------------------------------------------------------
r04 OPERATING EXPENSES 1,011,530 8 589,445 10
---------------------------------------------------------------------------------------------------------------------------
r05 OPERATING INCOME 1,567,394 12 1,869,876 32
---------------------------------------------------------------------------------------------------------------------------
r06 INTEGRAL FINANCING COST 143,735 1 37,390 1
---------------------------------------------------------------------------------------------------------------------------
r07 INCOME AFTER INTEGRAL FINANCING COST 1,423,659 11 1,832,486 31
---------------------------------------------------------------------------------------------------------------------------
r08 OTHER EXPENSE AND INCOME (NET) (55,131) 0 37,878 1
---------------------------------------------------------------------------------------------------------------------------
r44 SPECIAL ITEMS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r09 INCOME BEFORE INCOME TAXES AND EMPLOYEES' PROFIT SHARING 1,478,790 11 1,794,608 31
---------------------------------------------------------------------------------------------------------------------------
r10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 189,779 1 341,383 6
---------------------------------------------------------------------------------------------------------------------------
r11 NET INCOME AFTER TAXES AND EMPLOYEES' PROFIT SHARING 1,289,011 10 1,453,225 25
---------------------------------------------------------------------------------------------------------------------------
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r13 CONSOLIDATED NET INCOME FROM CONTINUING OPERATIONS 1,289,011 10 1,453,225 25
---------------------------------------------------------------------------------------------------------------------------
r14 INCOME FROM DISCONTINUED OPERATIONS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS 1,289,011 10 1,453,225 25
---------------------------------------------------------------------------------------------------------------------------
r16 EXTRAORDINARY ITEMS, NET EXPENSES (INCOME) 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r17 CUMULATIVE EFFECT FROM ACCOUNTING CHANGE, NET 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r18 NET CONSOLIDATED INCOME 1,289,011 10 1,453,225 25
---------------------------------------------------------------------------------------------------------------------------
r19 NET INCOME OF MINORITY INTEREST 17,378 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r20 NET INCOME OF MAJORITY INTEREST 1,271,633 10 1,453,225 25
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
---------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
---------------------------------------------------------------------------------------------------------------------------
r01 NET SALES 12,882,888 100 5,872,194 100
---------------------------------------------------------------------------------------------------------------------------
r21 DOMESTIC 5,847,035 45 5,245,184 89
---------------------------------------------------------------------------------------------------------------------------
r22 FOREIGN 7,035,853 55 627,010 11
---------------------------------------------------------------------------------------------------------------------------
r23 TRANSLATED INTO DOLLARS (***) 653,202 52,468
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
r06 INTEGRAL FINANCING COST 143,735 100 37,390 100
---------------------------------------------------------------------------------------------------------------------------
r24 INTEREST EXPENSE 39,639 28 16,778 45
---------------------------------------------------------------------------------------------------------------------------
r42 LOSS (GAIN) ON RESTATEMENT OF UDI'S 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r45 OTHER FINANCE COSTS 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r26 INTEREST INCOME 24,013 17 22,532 60
---------------------------------------------------------------------------------------------------------------------------
r46 OTHER FINANCIAL INCOME 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r25 FOREIGN EXCHANGE LOSS (GAIN) (NET) 74,793 52 (3,961) (11)
---------------------------------------------------------------------------------------------------------------------------
r28 RESULT FROM MONETARY POSITION 53,316 37 47,105 126
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
r10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING 189,779 100 341,383 100
---------------------------------------------------------------------------------------------------------------------------
r32 INCOME TAX 78,368 41 22,987 7
---------------------------------------------------------------------------------------------------------------------------
r33 DEFERRED INCOME TAX 110,997 58 318,396 93
---------------------------------------------------------------------------------------------------------------------------
r34 EMPLOYEES' PROFIT SHARING EXPENSES 414 0 0 0
---------------------------------------------------------------------------------------------------------------------------
r35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
R
---------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
r36 TOTAL SALES 13,600,200 6,210,213
---------------------------------------------------------------------------------------------------------------------------
r37 TAX RESULT FOR THE YEAR 0 0
---------------------------------------------------------------------------------------------------------------------------
r38 NET SALES (**) 12,882,888 5,872,194
---------------------------------------------------------------------------------------------------------------------------
r39 OPERATION INCOME (**) 1,567,394 1,869,876
---------------------------------------------------------------------------------------------------------------------------
r40 NET INCOME OF MAJORITY INTEREST (**) 1,271,633 1,453,225
---------------------------------------------------------------------------------------------------------------------------
r41 NET CONSOLIDATED INCOME (**) 1,289,011 1,453,225
---------------------------------------------------------------------------------------------------------------------------
r47 OPERATIVE DEPRECIATION AND AMORTIZATION 323,568 220,980
---------------------------------------------------------------------------------------------------------------------------
(**) INFORMATION FOR THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
QUARTERLY STATEMENTS OF INCOME
FROM OCTOBER 1 TO DECEMBER 31 OF 2005 AND 2004
(thousands of Mexican pesos)
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES OCTOBER 1 TO DECEMBER 31 OCTOBER 1 TO DECEMBER 31
R OF 2005 OF 2004
-----------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------------
rt01 NET SALES 4,767,631 100 1,790,500 100
-----------------------------------------------------------------------------------------------------------------------------
rt02 COST OF SALES 4,195,611 88 1,088,160 61
-----------------------------------------------------------------------------------------------------------------------------
rt03 GROSS PROFIT 572,020 12 702,340 39
-----------------------------------------------------------------------------------------------------------------------------
rt04 OPERATING EXPENSES 338,333 7 162,558 9
-----------------------------------------------------------------------------------------------------------------------------
rt05 OPERATING INCOME 233,687 5 539,782 30
-----------------------------------------------------------------------------------------------------------------------------
rt06 INTEGRAL FINANCING COST 57,166 1 20,802 1
-----------------------------------------------------------------------------------------------------------------------------
rt07 INCOME AFTER INTEGRAL FINANCING COST 176,521 4 518,980 29
-----------------------------------------------------------------------------------------------------------------------------
rt08 OTHER EXPENSE AND INCOME (NET) (39,784) (1) 55,067 3
-----------------------------------------------------------------------------------------------------------------------------
rt44 SPECIAL ITEMS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt09 INCOME BEFORE INCOME TAXES AND EMPLOYEES' PROFIT SHARING 216,305 5 463,913 26
-----------------------------------------------------------------------------------------------------------------------------
rt10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING (53,109) (1) 106,823 6
-----------------------------------------------------------------------------------------------------------------------------
rt11 NET INCOME AFTER TAXES AND EMPLOYEES' PROFIT SHARING 269,414 6 357,090 20
-----------------------------------------------------------------------------------------------------------------------------
rt12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND
ASSOCIATES 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt13 CONSOLIDATED NET INCOME FROM CONTINUING OPERATIONS 269,414 6 357,090 20
-----------------------------------------------------------------------------------------------------------------------------
rt14 INCOME FROM DISCONTINUED OPERATIONS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS 269,414 6 357,090 20
-----------------------------------------------------------------------------------------------------------------------------
rt16 EXTRAORDINARY ITEMS, NET EXPENSES (INCOME) 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt17 CUMULATIVE EFFECT FROM ACCOUNTING CHANGE, NET 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt18 NET CONSOLIDATED INCOME 269,414 6 357,090 20
-----------------------------------------------------------------------------------------------------------------------------
rt19 NET INCOME OF MINORITY INTEREST (10,313) 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt20 NET INCOME OF MAJORITY INTEREST 279,727 6 357,090 20
-----------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME OF THE FOURTH QUARTER
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS OCTOBER 1 TO DECEMBER 31 OCTOBER 1 TO DECEMBER 31
R OF 2005 OF 2004
-----------------------------------------------------------------------------------------------------------------------------
AMOUNT % AMOUNT %
-----------------------------------------------------------------------------------------------------------------------------
rt01 NET SALES 4,767,631 100 1,790,500 100
-----------------------------------------------------------------------------------------------------------------------------
rt21 DOMESTIC 1,251,728 26 1,628,441 91
-----------------------------------------------------------------------------------------------------------------------------
rt22 FOREIGN 3,515,903 74 162,059 9
-----------------------------------------------------------------------------------------------------------------------------
rt23 TRANSLATED INTO DOLLARS (***) 334,254 13,863
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
rt06 INTEGRAL FINANCING COST 57,166 100 20,802 100
-----------------------------------------------------------------------------------------------------------------------------
rt24 INTEREST EXPENSE 23,379 41 1,117 5
-----------------------------------------------------------------------------------------------------------------------------
rt42 LOSS (GAIN) ON RESTATEMENT OF UDI'S 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt45 OTHER FINANCE COSTS 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt26 INTEREST INCOME 6,159 11 3,254 16
-----------------------------------------------------------------------------------------------------------------------------
rt46 OTHER FINANCIAL INCOME 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt25 FOREIGN EXCHANGE LOSS (GAIN) (NET) 4,705 8 8,171 39
-----------------------------------------------------------------------------------------------------------------------------
rt28 RESULT FROM MONETARY POSITION 35,241 62 14,768 71
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
rt10 PROVISIONS FOR INCOME TAXES AND EMPLOYEES' PROFIT SHARING (53,109) 100 106,823 100
-----------------------------------------------------------------------------------------------------------------------------
rt32 INCOME TAX (315,965) 595 (655) (1)
-----------------------------------------------------------------------------------------------------------------------------
rt33 DEFERRED INCOME TAX 262,442 (494) 107,478 101
-----------------------------------------------------------------------------------------------------------------------------
rt34 EMPLOYEES' PROFIT SHARING EXPENSES 414 (1) 0 0
-----------------------------------------------------------------------------------------------------------------------------
rt35 DEFERRED EMPLOYEES' PROFIT SHARING 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------
(***) THOUSANDS OF DOLLARS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF INCOME OF THE FOURTH QUARTER
OTHER CONCEPTS
(thousands of Mexican pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS OCTOBER 1 TO DECEMBER 31 OCTOBER 1 TO DECEMBER 31
R OF 2005 OF 2004
---------------------------------------------------------------------------------------------------------------------------
C AMOUNT AMOUNT
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
rt47 OPERATIVE DEPRECIATION AND AMORTIZATION 101,949 59,529
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
FROM JANUARY 1 TO DECEMBER 31 OF 2005 AND 2004
(thousands of pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
---------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c01 CONSOLIDATED NET INCOME 1,289,011 1,453,225
---------------------------------------------------------------------------------------------------------------------------
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 373,001 555,332
---------------------------------------------------------------------------------------------------------------------------
c03 RESOURCES FROM NET INCOME FOR THE YEAR 1,662,012 2,008,557
---------------------------------------------------------------------------------------------------------------------------
c04 RESOURCES PROVIDED OR USES IN OPERATION 298,203 (1,099,210)
---------------------------------------------------------------------------------------------------------------------------
c05 RESOURCES PROVIDED BY (USED FOR) IN OPERATING ACTIVITIES 1,960,215 909,347
---------------------------------------------------------------------------------------------------------------------------
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING
ACTIVITIES (1,058,420) 148,142
---------------------------------------------------------------------------------------------------------------------------
c07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES 0 253,356
---------------------------------------------------------------------------------------------------------------------------
c08 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES (1,058,420) 401,498
---------------------------------------------------------------------------------------------------------------------------
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (1,217,072) (1,348,524)
---------------------------------------------------------------------------------------------------------------------------
c10 NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS (315,277) (37,679)
---------------------------------------------------------------------------------------------------------------------------
c11 CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNING OF PERIOD 523,341 561,020
---------------------------------------------------------------------------------------------------------------------------
c12 CASH AND SHORT TERM INVESTMENTS AT THE END OF PERIOD 208,064 523,341
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
STATEMENTS OF CHANGES IN FINANCIAL POSITION
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CONCEPTS CURRENT YEAR PREVIOUS YEAR
C
---------------------------------------------------------------------------------------------------------------------------
AMOUNT AMOUNT
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c02 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH 373,001 555,332
---------------------------------------------------------------------------------------------------------------------------
c13 DEPRECIATION AND AMORTIZATION FOR THE YEAR 323,568 220,980
---------------------------------------------------------------------------------------------------------------------------
c41 + (-) OTHER ITEMS 49,433 334,352
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c04 RESOURCES PROVIDED OR USED IN OPERATION 298,203 (1,099,210)
---------------------------------------------------------------------------------------------------------------------------
c18 + (-) DECREASE (INCREASE) IN ACCOUNT RECEIVABLES (128,504) (526,469)
---------------------------------------------------------------------------------------------------------------------------
c19 + (-) DECREASE (INCREASE) IN INVENTORIES 607,625 (853,482)
---------------------------------------------------------------------------------------------------------------------------
c20 + (-) DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLES (256,726) (168,909)
---------------------------------------------------------------------------------------------------------------------------
c21 + (-) DECREASE (INCREASE) IN SUPPLIERS (381,427) 383,549
---------------------------------------------------------------------------------------------------------------------------
c22 + (-) DECREASE (INCREASE) IN OTHER LIABILITIES 457,235 66,101
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c06 RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING
ACTIVITIES (1,058,420) 148,142
---------------------------------------------------------------------------------------------------------------------------
c23 + BANK FINANCING 406,404 157,018
---------------------------------------------------------------------------------------------------------------------------
c24 + STOCK MARKET FINANCING 0 0
---------------------------------------------------------------------------------------------------------------------------
c25 + DIVIDEND RECEIVED 0 0
---------------------------------------------------------------------------------------------------------------------------
c26 OTHER FINANCING 127,676 10,829
---------------------------------------------------------------------------------------------------------------------------
c27 BANK FINANCING AMORTIZATION (1,592,500) (19,705)
---------------------------------------------------------------------------------------------------------------------------
c28 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
---------------------------------------------------------------------------------------------------------------------------
c29 (-) OTHER FINANCING AMORTIZATION 0 0
---------------------------------------------------------------------------------------------------------------------------
c42 + (-) OTHER ITEMS 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c07 RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING
ACTIVITIES 0 253,356
---------------------------------------------------------------------------------------------------------------------------
c30 + (-) INCREASE (DECREASE) IN CAPITAL STOCK 0 24,534
---------------------------------------------------------------------------------------------------------------------------
c31 (-) DIVIDENDS PAID 0 0
---------------------------------------------------------------------------------------------------------------------------
c32 + PREMIUM ON ISSUANCE OF SHARES 0 0
---------------------------------------------------------------------------------------------------------------------------
c33 + CONTRIBUTION FOR FUTURE CAPITAL INCREASES 0 228,822
---------------------------------------------------------------------------------------------------------------------------
c43 + (-) OTHER ITEMS 0 0
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
c09 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES (1,217,072) (1,348,524)
---------------------------------------------------------------------------------------------------------------------------
c34 + (-) INCREASE (DECREASE) IN PERMANENT STOCK INVESTMENTS 0 0
---------------------------------------------------------------------------------------------------------------------------
c35 (-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT (424,015) (1,276,672)
---------------------------------------------------------------------------------------------------------------------------
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 (793,057) (71,852)
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
RATIOS
CONSOLIDATED
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES CURRENT YEAR PREVIOUS YEAR
P
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
YIELD
---------------------------------------------------------------------------------------------------------------------------
p01 NET INCOME TO NET SALES 10.00% 24.74%
---------------------------------------------------------------------------------------------------------------------------
p02 NET INCOME TO STOCKHOLDERS' EQUITY (**) 16.36% 21.36%
---------------------------------------------------------------------------------------------------------------------------
p03 NET INCOME TO TOTAL ASSETS (**) 8.89% 15.71%
---------------------------------------------------------------------------------------------------------------------------
p04 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0.00% 0.00%
---------------------------------------------------------------------------------------------------------------------------
p05 INCOME DUE TO MONETARY POSITION TO NET INCOME (4.13)% (3.24)%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
ACTIVITY
---------------------------------------------------------------------------------------------------------------------------
p06 NET SALES TO NET ASSETS (**) 0.88 times 0.63 times
---------------------------------------------------------------------------------------------------------------------------
p07 NET SALES TO FIXED ASSETS (**) 1.83 times 0.97 times
---------------------------------------------------------------------------------------------------------------------------
p08 INVENTORIES TURNOVER (**) 2.83 times 2.92 times
---------------------------------------------------------------------------------------------------------------------------
p09 ACCOUNTS RECEIVABLE IN DAYS OF SALES 55.18 days 53.05 days
---------------------------------------------------------------------------------------------------------------------------
p10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 10.37% 10.37%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
LEVERAGE
---------------------------------------------------------------------------------------------------------------------------
p11 TOTAL LIABILITIES TO TOTAL ASSETS 33.99% 26.41%
---------------------------------------------------------------------------------------------------------------------------
p12 TOTAL LIABILITIES TO STOCKHOLDERS' EQUITY 0.51 times 0.35 times
---------------------------------------------------------------------------------------------------------------------------
p13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 47.43% 15.78%
---------------------------------------------------------------------------------------------------------------------------
p14 LONG-TERM LIABILITIES TO FIXED ASSETS 5.54% 0.00%
---------------------------------------------------------------------------------------------------------------------------
p15 OPERATING INCOME TO INTEREST PAID 39.54 times 111.44 times
---------------------------------------------------------------------------------------------------------------------------
p16 NET SALES TO TOTAL LIABILITIES (**) 2.61 times 2.40 times
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
LIQUIDITY
---------------------------------------------------------------------------------------------------------------------------
p17 CURRENT ASSETS TO CURRENT LIABILITIES 2.49 times 3.08 times
---------------------------------------------------------------------------------------------------------------------------
p18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 1.14 times 1.83 times
---------------------------------------------------------------------------------------------------------------------------
p19 CURRENT ASSETS TO TOTAL LIABILITIES 1.36 times 1.18 times
---------------------------------------------------------------------------------------------------------------------------
p20 AVAILABLE ASSETS TO CURRENT LIABILITIES 7.71% 55.69%
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
CASH FLOW
---------------------------------------------------------------------------------------------------------------------------
p21 RESOURCES FROM NET INCOME TO NET SALES 12.90% 34.20%
---------------------------------------------------------------------------------------------------------------------------
p22 RESOURCES FROM CHANGES IN WORKING CAPITAL TO NET SALES 2.31% (18.71)%
---------------------------------------------------------------------------------------------------------------------------
p23 RESOURCES GENERATED (USED) IN OPERATING TO INTEREST PAID 49.45 times 54.19 times
---------------------------------------------------------------------------------------------------------------------------
p24 EXTERNAL FINANCING TO RESOURCES PROVIDED BY (USED FOR)
FINANCING 100.00% 36.89%
---------------------------------------------------------------------------------------------------------------------------
p25 INTERNAL FINANCING TO RESOURCES PROVIDED (USED FOR) FINANCING (0.00)% 63.10%
---------------------------------------------------------------------------------------------------------------------------
p26 RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES 34.83% 94.67%
---------------------------------------------------------------------------------------------------------------------------
(**) IN THESE RATIOS FOR THE DATA TAKE INTO CONSIDERATION THE LAST TWELVE MONTHS
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
DATE PER SHARE
CONSOLIDATED
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
REF CATEGORIES QUARTER OF PRESENT QUARTER OF PREVIOUS
D FINANCIAL YEAR FINANCIAL YEAR
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
d01 BASIC PROFIT PER ORDINARY SHARE (**) $ 9.32 $ 10.93
---------------------------------------------------------------------------------------------------------------------------
d02 BASIC PROFIT PER PREFERRED SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------------
d03 DILUTED PROFIT PER ORDINARY SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------------
d04 CONTINUING OPERATING PROFIT PER COMMON SHARE (**) $ 9.32 $10.93
---------------------------------------------------------------------------------------------------------------------------
d05 EFFECT OF DISCONTINUED OPERATIONS ON CONTINUING OPERATING
PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------------
d06 EFFECT OF EXTRAORDINARY PROFIT AND LOSS ON CONTINUING
OPERATING PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------------
d07 EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES ON CONTINUING
OPERATING PROFIT PER SHARE (**) $ 0.00 $ 0.00
---------------------------------------------------------------------------------------------------------------------------
d08 CARRYING VALUE PER SHARE $56.34 $50.94
---------------------------------------------------------------------------------------------------------------------------
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 0.86 times 1.83 times
---------------------------------------------------------------------------------------------------------------------------
d12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE 4.68 times 8.51 times
---------------------------------------------------------------------------------------------------------------------------
d13 MARKET PRICE TO BASIC PROFIT PER PREFERENTE 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: 1 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
FINANCIAL STATEMENT NOTES
CONSOLIDATED
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On September 10, 2004 Simec completed the acquisition of the property, plant and
equipment and the inventories, and assumed liabilities associated with seniority
premiums of employees, of the Mexican steel-making facilities of Industrias
Ferricas del Norte, S.A. (Corporacion Sidenor of Spain) located in Apizaco,
Tlaxcala and Cholula, Puebla. Simec estimates that its total investment in this
transaction was approximately U.S. $135 million. Simec began to operate the
plants in Apizaco, Tlaxcala and Cholula, Puebla on August 1, 2004, and, as a
result, the operation of both plants is reflected in Simec's financial results
as of such date.
On July 22, 2005 Simec and its parent company ICH have acquired 100% of the
Stock of PAV Republic, Inc. ("Republic"). Simec, ICH's largest subsidiary, has
acquired 50.2% of Republic's stock, and ICH purchased the remaining 49.8%. The
cash purchase price of USD $229 million was financed by internally generated
funds. Republic is the leading producer of special bar quality (SBQ) steel in
the United States and, together with Simec, will become the largest producer of
this kind of steel in North America. Simec began to operate the plants of
Republic on July 22, 2005 and, as a result the operation is reflected in Simec's
financial results as of such date.
According with the established in the articles 35 and 81 of the dispositions of
general character applicable to the registrants and other participants of the
market of values in Mexico, next consolidated earning statements from January 1
to December 31, appear pro forma of Simec by the period 2005 and 2004, in order
to be comparable and the consolidated balance sheet appear Pro Forma of Simec at
December 31, 2004 in order to be comparable against December 31, 2005.
CONSOLIDATED PRO FORMA EARNING STATEMENT
(Thousands of Pesos)
FROM JANUARY 1 TO DECEMBER 31 OF 2005
-----------------------------------------------------------------------------------------------------------------
Simec without Consolidated
Apizaco, Cholula Apizaco and Republic Simec
and Republic Cholula Earning Statement
-----------------------------------------------------------------------------------------------------------------
Steel Sales (Metric Tons) 633,433 413,925 1,635,954 2,683,312
-----------------------------------------------------------------------------------------------------------------
Net Sales 3,930,462 2,732,184 15,502,752 22,165,398
-----------------------------------------------------------------------------------------------------------------
Cost of Sales 2,425,523 2,015,006 13,961,000 18,401,529
-----------------------------------------------------------------------------------------------------------------
Gross Income 1,504,939 717,178 1,541,752 3,763,869
-----------------------------------------------------------------------------------------------------------------
Operating Expenses 495,079 246,963 832,459 1,574,501
-----------------------------------------------------------------------------------------------------------------
Operating Income 1,009,860 470,215 709,293 2,189,368
-----------------------------------------------------------------------------------------------------------------
Total Financing Cost 92,130 12,988 127,553 232,671
-----------------------------------------------------------------------------------------------------------------
Other Financial Operations (84,147) 40,160 (36,870) (80,857)
-----------------------------------------------------------------------------------------------------------------
Income Taxes 142,866 21,327 223,659 387,852
-----------------------------------------------------------------------------------------------------------------
Net Income Before Minority
Interest 859,011 395,740 394,951 1,649,702
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED PRO FORMA EARNING STATEMENT
(Thousands of Pesos)
FROM JANUARY 1 TO DECEMBER 31 OF 2004
-----------------------------------------------------------------------------------------------------------------
Simec without Consolidated
Apizaco, Cholula Apizaco and Republic Simec
and Republic Cholula Earning Statement
-----------------------------------------------------------------------------------------------------------------
Steel Sales (Metric Tons) 617,683 361,286 1,633,209 2,612,178
-----------------------------------------------------------------------------------------------------------------
Net Sales 4,639,172 2,519,462 14,230,131 21,388,765
-----------------------------------------------------------------------------------------------------------------
Cost of Sales 2,550,841 1,837,565 12,799,485 17,187,891
-----------------------------------------------------------------------------------------------------------------
Gross Income 2,088,331 681,897 1,430,646 4,200,874
-----------------------------------------------------------------------------------------------------------------
Operating Expenses 514,002 245,942 643,574 1,403,518
-----------------------------------------------------------------------------------------------------------------
Operating Income 1,574,329 435,955 787,072 2,797,356
-----------------------------------------------------------------------------------------------------------------
Total Financing Cost 34,554 65,335 223,875 323,764
-----------------------------------------------------------------------------------------------------------------
Other Financial Operations 38,074 15,415 (123,624) (70,135)
-----------------------------------------------------------------------------------------------------------------
Income Taxes 341,383 0 216,073 557,456
-----------------------------------------------------------------------------------------------------------------
Net Income Before Minority
Interest 1,160,318 355,205 470,748 1,986,271
-----------------------------------------------------------------------------------------------------------------
The earnings statement Pro forma for the period January 1 to December 31 2004,
includes the information by the period from January 1 to July 31 of 2004, of the
companies Atlax and Metamex, previous owners of the plants of Cholula and Puebla
and for the earnings statements of Republic includes the results of January 1 to
December 31 of 2004 and January 1 to July 22 of 2005 that corresponded to the
previous owners of Republic.
CONSOLIDATED BALANCE SHEET
(Thousands of Pesos)
DECEMBER 31
-----------------------------------------------------------------------------------------------------------------
2005 Pro-forma 2004
-----------------------------------------------------------------------------------------------------------------
Consolidated Simec Adjustments Consolidated
Simec Balance without Republic Simec Balance
Sheet Republic Sheet
-----------------------------------------------------------------------------------------------------------------
Activo Circulante 6,734,225 2,895,211 4,703,686 7,598,897
-----------------------------------------------------------------------------------------------------------------
Inmuebles, Planta y Equipo 7,017,775 6,036,933 225,399 6,262,332
-----------------------------------------------------------------------------------------------------------------
Activo Diferido 742,344 313,407 182,319 495,726
-----------------------------------------------------------------------------------------------------------------
Activo Total 14,494,344 9,245,551 5,111,404 14,356,955
-----------------------------------------------------------------------------------------------------------------
Pasivo Circulante 2,697,754 939,633 1,372,766 2,312,399
-----------------------------------------------------------------------------------------------------------------
Pasivo a Largo Plazo 520,013 0 2,636,875 2,636,875
-----------------------------------------------------------------------------------------------------------------
Creditos Diferidos 1,710,078 1,502,846 0 1,502,846
-----------------------------------------------------------------------------------------------------------------
Capital Contable 9,566,499 6,803,072 1,101,763 7,904,835
-----------------------------------------------------------------------------------------------------------------
The consolidated balance sheet at December 31 of 2005 includes the plants of
Apizaco, Cholula and Republic and for the consolidated balance sheet Pro forma
at December 31, 2004 includes the information of Republic at December 31, 2004,
the plants of Apizaco and Cholula already are integrated in the consolidated
balance sheet of Simec at December 31, 2004.
s39 Premium in subscription of Capital Stock made in March 29, 2001 and April
29, 2005.
s44 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. Simec's long-term liabilities resulted of the
adoption of this Bulletin was Ps. 1,503,308 at December 31, 2005 compared to Ps.
1,480,919 at December 31, 2004. The effect on Simec's consolidated statement of
income in 2005, was an increase of Ps. 110,997 in the provision for income tax
and employee profit sharing compared to an increase of Ps. 318,396 in 2004.
These provisions do not affect the cash flow of Simec.
r24 There are not interest paid in UDI's
r26 There are not interest earned in UDI's
c02 Consolidated Statements of Changes in Financial Position
The net loss in money exchange and net profit in liabilities actualization are
as follows:
December 31, 2005 December 31, 2004
Net loss (profit) in money exchange Ps. (626) Ps. (336)
Net loss (profit) in liabilities
actualization (5,212) (1,205)
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
DIRECTOR REPORT
ANNEX 1 CONSOLIDATED
JUDGED INFORMATION
INFORMATION CONCERNING LIQUIDITY AND CAPITAL RESOURCES AND DEBT
OBLIGATIONS WITH BANKS AND COMMERCIAL CREDITORS
Liquidity and Capital Resources
At December 31, 2005, Simec's total consolidated debt consisted of U.S. $38
million (Ps. 410 million), of which $33.4 million is debt held by GE Capital,
$4.3 million dollars held by the Ohio Department of Development Loan, and U.S.
$302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest at
December 31, 2005 was U.S. 309,311 dollars). At December 31, 2004, Simec had
outstanding approximately $13.9 million of U.S. dollar-denominated debt.
On July 22, 2005, Simec and its parent company Industrias CH, S.A. de C.V.
("ICH") acquired 100% of the stock of PAV Republic, Inc. ("Republic"). Simec,
ICH's largest subsidiary, acquired 50.2% of Republic's stock, and ICH purchased
the remaining 49.8%. The cash purchase price of U.S. $229 million was financed
by internally generated funds. At December 31, 2005, the total amount of
Republic's liabilities was of U.S. $37.7 million (Ps. 407 million), with a
weighted average cost per year of 5.87%. Republic is the leading producer of
special bar quality (SBQ) steel in the United States and, together with Simec,
is the largest producer of this kind of steel in North America.
On September 10, 2004, Simec completed the acquisition of the property, plant
and equipment and the inventories, and assumed liabilities associated with
seniority premiums of employees of the Mexican steel-making facilities of
Industrias Ferricas del Norte, S.A. (Corporacion Sidenor of Spain) located in
Apizaco, Tlaxcala and Cholula, Puebla. Simec's total investment in this
transaction was approximately U.S. $135 million, funded with internally
generated resources of Simec and capital contributions from ICH of U.S. $19
million for capital stock issued in the second quarter of 2005. Simec began
operating the plants in Apizaco, Tlaxcala and Cholula, Puebla on August 1, 2004,
and, as a result, the operation of both plants is reflected in Simec's financial
results as of such date.
Net resources used by operations were Ps. 1,960 million in 2005 (including the
effects of the acquisition of Republic) versus Ps. 909 million of net resources
provided by operations in 2004. Net resources used by financing activities were
Ps. 1,058 million in 2005 versus Ps. 401 million of net resources provided by
financing activities in 2004 (which amount reflects the prepayment of Ps. 20
million (U.S. $1.7 million) of bank debt, a capital contribution from ICH to
Simec in the amount of Ps. 229 million ($19 million) for capital stock to be
issued in the future and a capital contribution of certain minority shareholders
of Simec for Ps. 24 million). Net resources used in investing activities (to
acquire property, plant and equipment and other non-current assets) were Ps.
1,217 million in 2005 (including Ps. 1,218 from the acquisition of the Republic
facilities) versus net resources used in investing activities of Ps. 1,349
million in 2004 (which amount reflects the acquisition of the Apizaco and
Cholula facilities).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Year Ended December 31, 2005 compared to Year Ended December 31, 2004
Net Sales
Net sales of Simec increased 119% to Ps. 12,883 million in 2005 (including the
net sales generated by the newly acquired plants in Apizaco and Cholula of Ps.
2,732 million and the newly acquired plants of Republic of Ps. 6,220 million),
compared to Ps. 5,872 million in 2004 (including the net sales generated by the
newly acquired plants in Apizaco and Cholula of Ps. 1,233 million). Sales in
metric tons of basic steel products increased 121% to 1,711,315 metric tons in
2005 (including 413,925 metric tons generated by the newly acquired plants in
Apizaco and Cholula and 674,957 metric tons generated by the newly acquired
plants of Republic) compared to 773,297 metric tons in 2004 (including 155,614
metric tons relating to the newly acquired plants in Apizaco and Cholula).
Exports (including sales by U.S. subsidiaries) of basic steel products increased
733% to 809,083 metric tons in 2005 (including 19,261 tons relating to the newly
acquired plants in Apizaco and Cholula and 674,957 metric tons generated by the
newly acquired plants of Republic) versus 97,126 metric tons in the same period
of 2004 (including 12,394 metric tons relating to the newly acquired plants in
Apizaco and Cholula). Additionally, Simec sold 14,487 metric tons of billet in
2005, compared to 41,832 tons of billet in 2004. The average price of steel
products (excluding the sales of Republic) decreased 14% in real terms in 2005
versus 2004.
Direct Cost of Sales
Simec's direct cost of sales increased 202% to Ps. 10,304 million in 2005
(including Ps. 2,015 million relating to the newly acquired plants in Apizaco
and Cholula and Ps. 5,863 million relating to the newly acquired plants of
Republic) compared to Ps. 3,413 million in 2004 (including Ps. 862 million
relating to the newly acquired plants in Apizaco and Cholula). Direct cost of
sales as a percentage of net sales was 80% in 2005 compared to 58% in the same
period of 2004. The average cost of raw materials used to produce steel products
(excluding the production of Republic) increased 1% in real terms in 2005 versus
2004, primarily as a result of increases in the price of scrap and certain other
raw materials.
Marginal Profit
Simec's marginal profit increased 5% to Ps. 2,579 million in 2005 (including Ps.
717 million relating to the newly acquired plants in Apizaco and Cholula and Ps.
357 million relating to the newly acquired plants of Republic) compared to Ps.
2,459 million in 2004 (including Ps. 371 million relating to the newly acquired
plants in Apizaco and Cholula). As a percentage of net sales, marginal profit
was 20% in 2005 compared to 42% in 2004.
Indirect Manufacturing, Selling, General and Administrative Expenses
Indirect manufacturing, selling, general, and administrative expenses (which
include depreciation and amortization) increased 72% to Ps. 1,012 million in
2005 (including Ps. 247 million relating to the newly acquired plants in Apizaco
and Cholula and Ps. 269 million relating to the newly acquired plants of
Republic) from Ps. 589 million in 2004 (including Ps. 75 million relating to the
newly acquired plants in Apizaco and Cholula); Simec recorded an increase of Ps.
107 million in depreciation and amortization expense, which in 2005 was Ps. 328
million (including Ps. 60 million relating to the newly acquired plants in
Apizaco and Cholula and Ps. 72 million relating to the newly acquired plants of
Republic) compared to Ps. 221 million in 2004 (including Ps. 10 million relating
to the newly acquired plants in Apizaco and Cholula).
Operating Income
Simec's operating income decreased 16% to Ps. 1,567 million in 2005 (including
Ps. 470 million relating to the newly acquired plants in Apizaco and Cholula and
Ps. 87 million relating to the newly acquired plants of Republic) compared to
Ps. 1,870 million in 2004 (including Ps. 296 million relating to the newly
acquired plants in Apizaco and Cholula). Operating income was 12% of net sales
in 2005 and 32% of net sales in 2004.
Financial Income (Expense)
Simec recorded financial expense of Ps. 144 million in 2005 compared to
financial expense of Ps. 38 million in 2004. Simec recorded an exchange loss of
approximately Ps. 75 million in 2005 compared to an exchange gain of Ps. 4
million in 2004, reflecting a 4.3% increase in the value of the peso versus the
dollar in 2005 compared to a 0.3% decrease in the value of the peso versus the
dollar in the same period of 2004. Net interest expense was Ps. 16 million in
2005 versus net interest income of Ps. 5 million in 2004. Simec recorded a loss
from monetary position of Ps. 53 million in 2005 compared to a loss from
monetary position of Ps. 47 million in the same period of 2004, reflecting the
domestic inflation rate of 3.3% in 2005 as compared to 5.2% in the same period
of 2004 and lower debt levels during 2005.
Other Income (Expense), Net
Simec recorded other income, net, of Ps. 55 million in 2005 (including Ps. 67
million relating to the amortization of negative goodwill) compared to other
expense, net, of Ps. 38 million in 2004 (reflecting (i) income from the recovery
of an account recorded as a doubtful account of Ps. 14 million, (ii) a reserve
of Ps. 6 million relating to clean-up of contaminated land at the Pacific Steel
facilities, (iii) a reserve of Ps. 13 million relating to the realizable value
of idle machinery and equipment, (iv) a reserve for doubtful accounts of Ps. 10
million, and (v) other expense related to other financial operations of Ps. 23
million).
Income Tax and Employee Profit Sharing
Simec recorded a provision of Ps. 190 million for income tax and employee profit
sharing in 2005 (including a provision of Ps. 111 million from the application
of Bulletin D-4 with respect to deferred income tax described below) compared to
a provision of Ps. 341 million in 2004 (including a provision of Ps. 318 million
from the application of Bulletin D-4 with respect to deferred income tax
described below).
Net Income Before Minority Interest
Simec recorded net income before minority interest of Ps. 1,289 million in 2005
compared to net income before minority interest of Ps. 1,453 million in 2004.
Minority Interest
Simec recorded minority interest of Ps. 17 million in 2005 versus no minority
interest recorded in 2004. The minority interest reflects the 49.8% interest in
Republic held by ICH.
Net Income
As a result of the foregoing Simec recorded net income of Ps. 1,271 million in
2005 compared to net income of Ps. 1,453 million in 2004.
Purchase Price Accounting
Under purchase price accounting (US accounting standard FASB #141) the company
is required to value the assets (current assets, primarily inventories,
property, plant & equipment and intangible assets) and liabilities (primarily
deferred taxes) at market as of the purchase date. The purchase price accounting
adjustments were recorded on the opening balance sheet for Republic. Due to our
higher basis in the inventory (market value rather than production costs) our
cost of sales expense increased approximately $17.6 million in July, August and
September. This provision does not affect the cash flow of Simec.
Pronouncements Applicable to Mexican GAAP
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. Simec's long-term liability
resulting from the adoption of this Bulletin was Ps. 1,503 million at December
31, 2005 compared to Ps. 1,481 million at December 31, 2004. The effect on
Simec's consolidated statement of income in
2005 was an increase of Ps. 79 million in the provision for income tax and
employee profit sharing compared to an increase in the provision of Ps. 318
million in 2004. These provisions do not affect the cash flow of Simec.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
FINANCIAL STATEMENT NOTES
ANNEX 2 CONSOLIDATED
JUDGED INFORMATION
(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 - The consolidated financial statements have
been prepared in accordance with principles generally accepted in Mexico, which
include the recognition of the effects of inflation on the financial information
and the presentation in constant Mexican pesos.
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
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 includes 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 - The inventories are originally stated at average cost and
subsequently adjusted to replacement value at the balance sheet date. The
replacement values do not exceed market and are determined as follows:
Billet finished goods and work in process - At the latest production cost for
the month.
Raw materials - According to purchase prices prevailing in the market at the
balance sheet date.
Materials, supplies and rollers - At historical cost, restated by applying the
steel industry inflation index.
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.
The Company uses futures contracts for hedging risks from fluctuations in
natural gas prices, which are based on demand and supply at the principal
international markets.
As applicable, the Company recognized the fair value of instruments either as
liabilities or assets. Such fair value and thus, the value of these assets or
liabilities were restated at each month's-end. The Company opted for the early
adoption of Bulletin C-10 "Derivative Financial Instruments and Hedging";
therefore, at December 31, 2003 the fair value of natural gas in force during
2004, 2005 and 2006 and which effective portions will not be offset against the
asset risks until consumed, were recognized within the comprehensive income
account in stockholders' equity.
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. 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 capitalized amounts are
restated using a factor derived from the NCPI cumulative from the date of
capitalization through period-end and are amortized over the average
depreciation period of the corresponding assets. The estimated useful lives of
assets as of December 31, 2005 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
restated using a factor derived from the NCPI cumulative from the date of
generation through period-end, 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. Cost of sales - Cost of sales related to sales of inventory items is recorded
at standard cost, which approximates the replacement cost at the date of sale.
k. Income tax and employee profit sharing - 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.
l. 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).
The financial statements of foreign subsidiaries are translated into Mexican
pesos in conformity with Bulletin B-15 "Transactions in Foreign Currency and
Translation of Financial Statements of Foreign Operations".
Pacific Steel and Undershaft investments are considered to be "integrated
foreign operations", as defined in Bulletin B-15, and accordingly such financial
statements were translated as follows:
- Monetary items at the exchange rate at the balance sheet date.
- Non-monetary items and stockholders' equity at the exchange rate
prevailing at the date the transactions occurred.
- Income and expense items at an appropriate average exchange rate.
- The resulting foreign currency translation differences are included in the
financial income (expense) in the statement of income (loss).
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
SimRep and subsidiaries are considered to be "foreign operations", as defined in
Bulletin B-15, and accordingly such financial statements were translated as
follows:
- Monetary and non-monetary items at the exchange rate at the balance sheet
date.
- Income and expense items at the exchange rate at the balance sheet date.
- The resulting foreign currency translation differences are included in the
stockholders' equity.
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
m. 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 December 31, 2005 and
2004. 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.
n. Other income (expenses) - Other income (expenses) shown in the consolidated
statements of operations primarily includes other financial operations.
o. Gain on monetary position - The gain on monetary position in the consolidated
statements of income (loss) is determined by applying to net monetary assets or
liabilities at the beginning of each month the factor of inflation derived from
the NCPI and is restated at period-end with the corresponding factor.
p. Restatement of capital stock and retained earnings (losses) - This is
determined by multiplying capital stock contributions and retained earnings
(losses) by factors derived from the NCPI, which measure the cumulative
inflation from the date when capital stock contributions were made and earnings
(losses) were generated, through the latest period-end.
q. Effect of restatement of stockholders' equity - The effect resulting from
restating stockholders' equity includes the accumulated effect from holding
non-monetary assets, which represents the change in the specific price level of
those assets compared to the change in the NCPI.
r. Impairment of Long-Lived Assets - Long-lived assets, consisting of property,
plant, and equipment, intangible assets and deferred costs, are periodically
reviewed by the Company for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset, or related group of
assets, may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
lesser of the recovery amount or the fair value of the assets. Measurement of
fair value may be based upon appraisals, market values of similar assets or
discounted cash flows. Assets to be disposed of are reported at the lower of the
carrying amount or the fair value less cost to sell and are no longer
depreciated.
s. Environmental costs - The Company and other steel companies have in recent
years become subject to increasingly stringent environmental laws and
regulations. It is the policy of the Company to endeavor to comply with
applicable environmental laws and regulations. The Company established a
liability for an amount which the Company believes is appropriate, based on
information currently available, to cover costs of environmental remediation it
deems probable and estimable.
The recorded amounts represent estimates of the environmental remediation costs
associated with future events triggering or confirming the costs that, in
management's judgment, are probable. These estimates are based on currently
available facts, existing technology and presently enacted laws and regulations,
and take into consideration the likely effects of inflation and other societal
and economic factors. The precise timing of such events cannot be reliably
determined at this time due to the absence of any deadlines for remediation
under the applicable environmental laws and regulations pursuant to which such
remediation costs will be expended. No claims for recovery are netted against
the stated amount.
(2) Financial Debt:
At December 31, 2005, Simec's total consolidated debt consisted of U.S. $38
million (Ps. 410 million), of which $33.4 million is debt held by GE Capital,
$4.3 million dollars held by the Ohio Department of Development Loan, and U.S.
$302,000 of 8 7/8% medium-term notes ("MTN's") due 1998 (accrued interest at
December 31,
2005 was U.S. 309,311 dollars). At December 31, 2004, Simec had outstanding
approximately $13.9 million of U.S. dollar-denominated debt.
(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. 14,982 (U.S. $1,390,133) at December 31,
2005, (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.
c. Compania Siderurgica de Guadalajara, S.A. de C.V. has entered into a gas and
liquid oxygen purchase agreement with Praxair de Mexico, S.A. de C.V., under
which it is committed to acquire monthly over a fifteen-year period beginning
January 1, 1989, a certain amount of product. At present required purchases
amount to Ps. 1,436 per month.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
RELATIONS OF SHARES INVESTMENTS
ANNEX 3 CONSOLIDATED
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
COMPANY NAME MAIN ACTIVITIES NUMBER OF OWNERSHIP
SHARES
-----------------------------------------------------------------------------------------------------------------------------
SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------------------------
Cia. Siderurgica de Guadalajara Sub-Holding 99.99
-----------------------------------------------------------------------------------------------------------------------------
Administradora de Cartera de Occidente Administracion de Cartera 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 Arrendadora de Inmuebles 99.99
-----------------------------------------------------------------------------------------------------------------------------
Coordinadora de Servicios Siderurgicos de Calidad Administrative services 100.00
-----------------------------------------------------------------------------------------------------------------------------
Administradora de Servicios de la Industria
Siderurgica Administrative services 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 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 100.00
-----------------------------------------------------------------------------------------------------------------------------
PAV Republic Production and sales of steel products 100.00
-----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------------------------
ASSOCIATEDS 0 0.00
-----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT IN ASSOCIATEDS 0.00
-----------------------------------------------------------------------------------------------------------------------------
OTHER PERMANENT INVESTMENTS 0.00
-----------------------------------------------------------------------------------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------------------------------------
NOTES
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2006
GRUPO SIMEC, S.A. DE C.V.
CREDITS BREAK DOWN
(THOUSANDS OF MEXICAN PESOS)
ANNEX 5
JUDGED INFORMATION
CONSOLIDATED
-----------------------------------------------------------------------------
Amortization of Credits in Mexican Pesos
(Thousands of Pesos)
Credit Amortization Rate of -----------------------------------------------------------------------------
Type / Date Interest Time Interval
-----------------------------------------------------------------------------
Institution Current Until 1 Until 2 Until 3 Until 4 Until 5 Current
Year Year Years Years Years Years or Year
More
--------------------------------------------------------------------------------------------------------------------------------
BANKS
--------------------------------------------------------------------------------------------------------------------------------
WITH WARRANTY
-------------------------------------------------------------------------------------------------------------------------------
GE Capital 21/05/2009 6.25
Ohio Department of Development 31/07/2008 3.00
--------------------------------------------------------------------------------------------------------------------------------
TOTAL BANKS 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
LISTED IN THE MEXICAN
STOCK EXCHANGE
--------------------------------------------------------------------------------------------------------------------------------
UNSECURED DEBT
--------------------------------------------------------------------------------------------------------------------------------
MEDIUM TERM NOTES 15/12/1998 9.33
--------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCK EXCHANGE 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
SUPPLIERS
--------------------------------------------------------------------------------------------------------------------------------
VARIOUS 0 440,675 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 0 440,675 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES
AND OTHER CREDITS
--------------------------------------------------------------------------------------------------------------------------------
VARIOUS 0 240,999 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES 0 240,999 0 0 0 0 0
AND OTHER CREDITS
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
TOTAL 0 681,674 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------
Amortization of Credits in Foreign Currency
(Thousands of Pesos)
Credit ---------------------------------------------------------
Type / Time Interval
---------------------------------------------------------
Institution Until 1 Until 2 Until 3 Until 4 Until 5
Year Years Years Years Years or
More
---------------------------------------------------------------------------------------
BANKS
---------------------------------------------------------------------------------------
WITH WARRANTY
---------------------------------------------------------------------------------------
GE Capital 359,974
Ohio Department of Development 17,643 18,322 10,725
---------------------------------------------------------------------------------------
TOTAL BANKS 17,643 18,322 10,725 359,974 0
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
LISTED IN THE MEXICAN
STOCK EXCHANGE
---------------------------------------------------------------------------------------
UNSECURED DEBT
---------------------------------------------------------------------------------------
MEDIUM TERM NOTES 3,255 0 0 0 0
---------------------------------------------------------------------------------------
TOTAL STOCK EXCHANGE 3,255 0 0 0 0
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
SUPPLIERS
---------------------------------------------------------------------------------------
VARIOUS 962,021 0 0 0 0
---------------------------------------------------------------------------------------
TOTAL SUPPLIERS 962,021 0 0 0 0
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES
AND OTHER CREDITS
---------------------------------------------------------------------------------------
VARIOUS 965,565 0 0 0 0
---------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES 965,565 0 0 0 0
AND OTHER CREDITS
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
TOTAL 1,948,484 18,322 10,725 359,974 0
---------------------------------------------------------------------------------------
NOTES:
The exchange rate of the peso to the U.S. dollar at December 31, 2005 was Ps.
10.7777
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
MONETARY FOREIGN CURRENCY POSITION
(Thousands of Mexican Pesos)
ANNEX 6 CONSOLIDATED
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
DOLLARS OTHER CURRENCIES TOTAL
-----------------------------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY POSITION THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF
DOLLARS PESOS DOLLARS PESOS PESOS
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 163,318 1,760,182 0 0 1,760,182
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
LIABILITIES POSITION 216,606 2,334,513 277 2,990 2,337,503
-----------------------------------------------------------------------------------------------------------------------------
SHORT TERM LIABILITIES POSITION 180,511 1,945,494 277 2,990 1,948,484
-----------------------------------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES POSITION 36,095 389,019 0 0 389,019
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
NET BALANCE (53,288) (574,331) (277) (2,990) (577,321)
-----------------------------------------------------------------------------------------------------------------------------
NOTES
THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT DECEMBER 31, 2005 WAS
PS. 10.7777
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
RESULT FROM MONETARY POSITION
(Thousands of Mexican Pesos)
ANNEX 7 CONSOLIDATED
JUDGED INFORMATION
------------------------------------------------------------------------------------------------------------------------------
ASSET (LIABILITY)
MONETARY MONETARY MONETARY MONTHLY MONTHLY (PROFIT)
MONTH ASSETS LIABILITIES POSITION INFLATION AND LOSS
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
JANUARY 1,799,870 972,894 826,976 0.00 0
------------------------------------------------------------------------------------------------------------------------------
FEBRUARY 1,918,511 1,026,720 891,791 0.33 2,943
------------------------------------------------------------------------------------------------------------------------------
MARCH 1,948,041 966,819 981,222 0.45 4,415
------------------------------------------------------------------------------------------------------------------------------
APRIL 2,091,477 914,341 1,177,136 0.36 4,238
------------------------------------------------------------------------------------------------------------------------------
MAY 2,169,331 1,037,828 1,131,503 (0.25) (2,829)
------------------------------------------------------------------------------------------------------------------------------
JUNE 2,293,416 859,419 1,433,997 (0.10) (1,434)
------------------------------------------------------------------------------------------------------------------------------
JULY 2,407,446 851,441 1,556,005 0.39 6,068
------------------------------------------------------------------------------------------------------------------------------
AUGUST 2,533,961 948,521 1,585,440 0.12 1,903
------------------------------------------------------------------------------------------------------------------------------
SEPTEMBER 2,698,356 274,800 2,423,556 0.40 9,694
------------------------------------------------------------------------------------------------------------------------------
OCTOBER 2,064,855 320,148 1,744,707 0.25 4,362
------------------------------------------------------------------------------------------------------------------------------
NOVEMBER 2,067,068 262,381 1,804,687 0.72 12,994
------------------------------------------------------------------------------------------------------------------------------
DECEMBER 2,221,593 865,148 1,356,445 0.61 8,274
------------------------------------------------------------------------------------------------------------------------------
ACTUALIZATION 677
------------------------------------------------------------------------------------------------------------------------------
CAPITALIZATION 0
------------------------------------------------------------------------------------------------------------------------------
FOREIGN CORPORATION 2,011
------------------------------------------------------------------------------------------------------------------------------
OTHER 0
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
TOTAL 53,316
------------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
DEBT INSTRUMENTS
ANNEX 8 CONSOLIDATED
JUDGED INFORMATION
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 2.49 times.
B) Accomplished the actual situation is 0.34
C) Accomplished the actual situation is 47.70
As of December 31, 2005, the remaining balance of the MTNs not exchanged
amounts to Ps. 3,255 ($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: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
ANNEX 9 CONSOLIDATED
JUDGED INFORMATION
-------------------------------------------------------------------------------------------------------------------------------
PLANT OR CENTER ECONOMIC ACTIVITY PLANT CAPACITY UTILIZATION (%)
-------------------------------------------------------------------------------------------------------------------------------
GUADALAJARA MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS
480 86
-------------------------------------------------------------------------------------------------------------------------------
MEXICALI MINI MILL PRODUCTION AND SALES OF STEEL PRODUCTS
250 85
-------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAS DEL ACERO Y DEL ALAMBRE
SALE OF STEEL PRODUCTS 0 0
-------------------------------------------------------------------------------------------------------------------------------
APIZACO AND CHOLULA PLANTS PRODUCTION AND SALES OF STEEL PRODUCTS
460 90
-------------------------------------------------------------------------------------------------------------------------------
CANTON CASTER FACILITY PRODUCTION OF BILLET 874 93
-------------------------------------------------------------------------------------------------------------------------------
LORAIN CASTER FACILITY PRODUCTION OF BILLET 1,252 85
-------------------------------------------------------------------------------------------------------------------------------
LORAIN HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS
816 79
-------------------------------------------------------------------------------------------------------------------------------
LACKAWANNA HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL PRODUCTS
576 96
-------------------------------------------------------------------------------------------------------------------------------
MASSILLON COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS
114 90
-------------------------------------------------------------------------------------------------------------------------------
GARY COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS
76 63
-------------------------------------------------------------------------------------------------------------------------------
ONTARIO COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL PRODUCTS
59 63
-------------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
MAIN RAW MATERIALS
ANNEX 10 CONSOLIDATED
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
DOMESTIC COST
DOMESTIC MAIN SUPPLIERS FOREIGN MAIN SUPPLIERS SUBSTITUTION PRODUCTION (%)
-----------------------------------------------------------------------------------------------------------------------------
SCRAP VARIOUS SCRAP VARIOUS YES 35.64
-----------------------------------------------------------------------------------------------------------------------------
ELECTRICITY C.F.E NO 6.41
-----------------------------------------------------------------------------------------------------------------------------
FERROALLOYS MINERA AUTLAN FERROALLOYS GFM TRADING YES 12.50
-----------------------------------------------------------------------------------------------------------------------------
ELECTRODES UCAR CARBON MEXICANA ELECTRODES SGL CARBON GROUP YES 8.61
-----------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
ANNEX 11 CONSOLIDATED
DOMESTIC SELLS
JUDGED INFORMATION
-----------------------------------------------------------------------------------------------------------------------------
MAIN PRODUCTS NET SALES MAIN DESTINATION
-----------------------------------------------------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
-----------------------------------------------------------------------------------------------------------------------------
STRUCTURAL PROFILES 186 1,233,655
-----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PROFILES 153 936,822
-----------------------------------------------------------------------------------------------------------------------------
REBAR 158 853,437
-----------------------------------------------------------------------------------------------------------------------------
FLAT BAR 178 1,091,296
-----------------------------------------------------------------------------------------------------------------------------
STEEL BARS 222 1,655,524
-----------------------------------------------------------------------------------------------------------------------------
OTHER 2 15,537
-----------------------------------------------------------------------------------------------------------------------------
BILLET 13 60,764
-----------------------------------------------------------------------------------------------------------------------------
HOT-ROLLED BARS
-----------------------------------------------------------------------------------------------------------------------------
COLD-FINISHED BARS
-----------------------------------------------------------------------------------------------------------------------------
SEMI-FINISHED SEAMLESS TUBE ROUNDS
-----------------------------------------------------------------------------------------------------------------------------
OTHER SEMI-FINISHED TRADE PRODUCTS
-----------------------------------------------------------------------------------------------------------------------------
T O T A L 5,847,035
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
FOREIGN SALES 7,035,853
-----------------------------------------------------------------------------------------------------------------------------
TOTAL 12,882,888
-----------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
SELLS DISTRIBUTION BY PRODUCT
ANNEX 11 CONSOLIDATED
FOREIGN SELLS
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
MAIN PRODUCTS NET SELLS MAIN
---------------------------------------------------------------------------------------------------------------------------
VOLUME AMOUNT TRADEMARKS COSTUMERS
---------------------------------------------------------------------------------------------------------------------------
EXPORTS
---------------------------------------------------------------------------------------------------------------------------
STRUCTURAL PROFILES 13 77,590
---------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PROFILES 13 80,517
---------------------------------------------------------------------------------------------------------------------------
REBAR 81 451,183
---------------------------------------------------------------------------------------------------------------------------
STEEL BARS 4 29,092
---------------------------------------------------------------------------------------------------------------------------
FLAT BAR 23 169,790
---------------------------------------------------------------------------------------------------------------------------
BILLET 1 7,439
---------------------------------------------------------------------------------------------------------------------------
FOREIGN SUBSIDIARIES
---------------------------------------------------------------------------------------------------------------------------
HOT-ROLLED BARS 404 3,958,326
---------------------------------------------------------------------------------------------------------------------------
COLD-FINISHED BARS 63 837,212
---------------------------------------------------------------------------------------------------------------------------
SEMI-FINISHED SEAMLESS TUBE ROUNDS 165 1,055,934
---------------------------------------------------------------------------------------------------------------------------
OTHER SEMI-FINISHED TRADE PRODUCTS 27 368,770
---------------------------------------------------------------------------------------------------------------------------
T O T A L 7,035,853
---------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED
INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES
JUDGED INFORMATION
---------------------------------------------------------------------------------------------------------------------------
SERIES NOMINAL VALID NUMBER OF SHARES CAPITAL STOCK
VALUE CUPON (Thousands of Pesos)
---------------------------------------------------------------------------------------------------------------------------
FIXED VARIABLE FREE
PORTION PORTION MEXICAN SUBSCRIPTION FIXED VARIABLE
---------------------------------------------------------------------------------------------------------------------------
B 30,283,350 107,646,249 0 137,929,599 441,786 1,570,361
---------------------------------------------------------------------------------------------------------------------------
TOTAL 30,283,350 107,646,249 0 137,929,599 441,786 1,570,361
---------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL NUMBER OF SHARES REPRESENTING THE PAID-IN CAPITAL STOCK ON THE DATE OF
SENDING THE INFORMATION: 137,929,599
--------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
CONSTRUCTION IN PROGRESS
ANNEX 13 CONSOLIDATED
JUDGED INFORMATION
THE PROYECTS IN PROGRESS AT DECEMBER 31, 2005, ARE:
PROYECTS IN PROGRESS TOTAL INVESTMENT
CASTER PROJECT IN CANTON AND
OTHER PROJECTS IN REPUBLIC 433,673
MEXICALI 34,789
VARIOUS PROJECTS IN TLAXCALA 25,774
VARIOUS PROJECTS IN GUADALAJARA AND
MEXICALI 26,446
TOTAL INVESTMENT AT
DECEMBER 31, 2005 520,682
=======
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
INFORMATION RELATED TO BULLETIN B-15
(FOREIGN CURRENCY TRANSLATION)
ANNEX 14 CONSOLIDATED
JUDGED INFORMATION
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).
The financial statements of foreign subsidiaries are translated into Mexican
pesos in conformity with Bulletin B-15 "Transactions in Foreign Currency and
Translation of Financial Statements of Foreign Operations".
Pacific Steel and Undershaft investments are considered to be "integrated
foreign operations", as defined in Bulletin B-15, and accordingly such financial
statements were translated as follows:
- Monetary items at the exchange rate at the balance sheet date.
- Non-monetary items and stockholders' equity at the exchange rate
prevailing at the date the transactions occurred.
- Income and expense items at an appropriate average exchange rate.
- The resulting foreign currency translation differences are included in the
financial income (expense) in the statement of income (loss).
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
SimRep and subsidiaries are considered to be "foreign operations", as defined in
Bulletin B-15, and accordingly such financial statements were translated as
follows:
- Monetary and non-monetary items at the exchange rate at the balance sheet
date.
- Income and expense items at the exchange rate at the balance sheet date.
- The resulting foreign currency translation differences are included in the
stockholders' equity.
- All resulting Mexican peso amounts are restated for the effects of
inflation in accordance with the dispositions of Bulletin B-10 using the
NCPI, where such effects are considered significant.
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE: SIMEC QUARTER: 4 YEAR: 2005
GRUPO SIMEC, S.A. DE C.V.
CONSOLIDATED
JUDGED INFORMATION
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 FOURTH QUARTER REPORT.
ING LUIS GARCIA LIMON C.P. JOSE FLORES FLORES
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
GUADALAJARA, JAL, AT APRIL 28 OF 2006