UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 1-11176

For the month of May, 2011.

Group Simec, Inc.
(Translation of Registrant’s Name Into English)

Av. Lazaro Cardenas 601, Colonia la Nogalera, Guadalajara, Jalisco, Mexico 44440
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

   Form 20-F x Form 40-F ¨

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)

   Yes ¨ No x

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)

   Yes ¨ No x

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

   Yes ¨ No x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______________________.)


SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    GRUPO SIMEC, S.A.B. de C.V.
   
(Registrant)
 
Date: May 3, 2011. By: /s/ Luis García Limón
    Name:
Luis García Limón
    Title: Chief Executive Officer



GUADALAJARA, MEXICO, May 2, 2011- Grupo Simec, S.A.B. de C.V. (AMEX: SIM) (“Simec”) announced today its results of operations for the three-month period ended March 31, 2011.

Comparative first quarter of 2011 vs. first quarter of 2010

Net Sales

Net sales of the company increased 3% by the combination of: improved in the sales price and fall of volume of shipments, sales rose from Ps. 6,393 millions in the first quarter of 2010 to Ps. 6,565 millions in the same period of 2011. Shipments of finished steel products decreased 11%, from 604 thousand tons in the first quarter of 2010 compared to 538 thousand tons in the same period of 2011. Total sales outside of Mexico in the first quarter of 2011 increased 9% to Ps. 3,678 millions compared to Ps. 3,380 millions in the same period of 2010. The Mexican sales decreased 4% from Ps. 3,013 millions in the first quarter of 2010 to Ps. 2,887 millions in the same period of 2011. The increase in sales can be explained due to improvement in the price of the subsidiary Simrep, because the volume of tons shipments in both periods are similar, while the finished products of the facilities of Mexico showed a fall in the first quarter of 2011, by the failure of the transformer in the plant of Guadalajara. Comparatively with the same period of 2010, sales in volume decreased 66 thousand shipment in 2011. The average price of steel products increased 15% in the first quarter of 2011 compared with the same period of 2010.

Direct Cost of Sales

Direct cost of sales increased 5% from Ps. 5,391 millions in the first quarter of 2010 to Ps. 5,682 millions in the same period of 2011. Direct cost of sales as a percentage of net sales in the first quarter of 2011 represented 87% compared to 84% the same period of previous year. The increase is due to increase in price of raw materials. The average cost of finished steel products in the first quarter of 2011 increased 18% compared to the same period of 2010.

Marginal Profit

Marginal profit of the company for the same period decreased 12% from Ps. 1,002 millions in 2010 to Ps. 883 millions in the same period of 2011. Marginal profit as a percentage of net sales in the first quarter of 2011 was 13% and for the same period of 2010 was 16%. The fall in marginal profit is due to fall in volume of shipments and increase in raw materials during the first quarter of 2011 compared with the same period of 2010.

Operating Expenses

Operating expenses decrease 20% to Ps. 282 millions in the first quarter of 2011 compared to Ps. 354 millions in the same period of 2010, and represented 4% of net sales in the first quarter of 2011 and 6% in the first quarter of 2010.

Operating Income

Operating income decreased 7% from Ps. 648 millions for the first quarter of 2010 compared to Ps. 601 millions in the same period of 2011. Operating income as a percentage of net sales was 10% in the first quarter of 2010 compared to 9% in the same period of 2011. The decreased in operating income is due to fall in volume of shipments, increased in raw material during the first quarter of 2011 compared with the same period of 2010.

EBITDA

The ebitda of the company for the first quarter of 2011, show a decreased of 8%, by the above mentioned, to fall from Ps. 906 millions in the first quarter of 2010 compared against Ps. 831 millions of the first quarter of 2011,


Comprehensive Financial Cost

Comprehensive financial cost in the first quarter of 2011 represented an expense of Ps. 84 millions compared with an expense of Ps. 24 millions in the same period of 2010. Net interest income was Ps. 2 millions in the first quarter of 2011 compared with a net gain of Ps. 3 millions in the same period of 2010. At the same time, Simec registered an exchange loss of Ps. 86 millions in the first quarter of 2011 compared with an exchange loss of Ps. 27 millions in the same period of 2010, due to 5.3% revaluation of the peso versus the dollar as of March 31, 2011 compared to December 31, 2010.

Other Expenses (Income) net

The company recorded other income net of Ps. 1 millions in the first quarter of 2011 compared to other income net of Ps. 10 millions in the same period of 2010.

Income Taxes

Income Taxes recorded an income of Ps. 11 millions in the first quarter of 2011 (including the income of Ps. 33 millions of deferred income taxes) compared to an expense of Ps. 21 millions in the same period of 2010 (including the benefits of Ps. 2 millions of deferred income taxes).

Net Income

As a result of the foregoing, net income decreased 14% to Ps. 529 millions in the first quarter of 2011 versus Ps. 614 millions in the same period of 2010.

Liquidity and Capital Resources

As of March 31, 2011, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998, or Ps. 3.6 millions (accrued interest on March 31, 2011 was U.S. $452,189, or Ps. 5.4 millions). As of December 31, 2010, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998 (accrued interest on December 31, 2010 was U.S. $445,314).

Comparative first quarter of 2011 vs. fourth quarter of 2010

Net Sales

Net sales of the company increased 17% from Ps. 5,615 millions of the fourth quarter of 2010 to Ps. 6,565 millions to the first quarter of 2011. Sales in tons of finished steel increased 3% from 522 thousand tons in the fourth quarter of 2010 compared with 538 thousand tons in the first quarter of 2011. The total sales outside of Mexico for the first quarter of 2011 increased 19% to Ps. 3,094 millions in the fourth quarter of 2010, compared with Ps. 3,678 millions for the first quarter of 2011. The Mexican sales increased 15% from Ps. 2,521 millions in the fourth quarter of 2010 to Ps. 2,887 millions in the first quarter of 2011. Prices of finished products sold in the first quarter 2011 increased 13% compared to the fourth quarter 2010.

Direct Cost of Sales

Direct cost of sales increased 11% from Ps. 5,136 millions in the fourth quarter of 2010 to Ps. 5,682 millions in the first quarter of 2011. With respect to sales, in the first quarter of 2011, the direct cost of sales represent 87% compared to 91% for the fourth quarter of 2010. The average cost of raw materials used to produce steel products increased 7% in the first quarter of 2011 versus the fourth quarter of 2010, primarily as a result of increase in the volume of shipments and increases in the price of raw materials.

Marginal (Loss) Profit

Marginal profit for the first quarter of 2011 grew to Ps. 883 millions compared with the profit of Ps. 479 millions in the fourth quarter of 2010, this represented an increased of 84%. The marginal profit as a percentage of net


sales for the first quarter of 2011 was 13% compared with 9% for the fourth quarter of 2010. The increase in marginal profit is due to the swift improved in the volume of the shipments and improved of the sales price.

Operating Expenses

Operating expenses represented to Ps. 282 millions in the first quarter of 2011 versus Ps. 325 millions in the fourth quarter of 2010, equivalent to a decreased of 13%. Operating expenses as a percentage of net sales represented 4% during the first quarter of 2011 and 6% for the fourth quarter of 2010.

Operating (Loss) Income

Operating income was Ps. 601 millions in the first quarter of 2011 compared to Ps. 154 millions of the fourth quarter of 2010. The operating income increase 290% between both quarters. The operating income as a percentage of net sales in the first quarter of 2011 was 9% compared to a operating loss of 3% in the fourth quarter 2010. The increase in operating income is due to the improved in shipments and sales price for the first quarter of 2011 compared with the fourth quarter of 2010.

EBITDA

The ebitda of the first quarter of 2011 was of Ps. 831 millions compared to Ps. 402 millions of the fourth quarter of 2010, an increased of Ps 429 millions.

Comprehensive Financial Cost

Comprehensive financial cost for the first quarter of 2011 represented an expense of Ps. 84 millions compared with an expense of Ps. 10 millions for the fourth quarter of 2010. Net interest income was Ps. 2 millions in the first quarter of 2011 compared with a zero cost in the fourth quarter of 2010. At the same time we registered an exchange net loss of Ps. 86 millions in the first quarter of 2011 compared with an exchange net loss of Ps. 10 millions in the fourth quarter of 2010.

Other Expenses (Income) net

The company recorded other income net of Ps. 1 millions in the first quarter of 2011 compared with other expenses net of Ps. 14 millions for the fourth quarter of 2010.

Income Taxes

Income Taxes, the company recorded an income of Ps. 11 millions in the first quarter of 2011 (include an income of income tax deferred for Ps 33 millions) compared against an income of Ps. 85 millions of income for income tax for the fourth quarter of 2010.

Income (Loss)

As a result of the foregoing, the company recorded a net income of Ps. 529 millions in the first quarter 2011 compared to a net income of Ps. 215 millions in the fourth quarter 2010.


(Millions of pesos) 1Q ‘11 1Q ‘10 4Q ‘10 1Q´11 vs
1Q'10		 1Q´11 vs
4Q´10
Sales 6,565 6,393 5,615 3% 17%
Cost of Sales 5,682 5,391 5,136 5% 11%
Gross Profit 883 1.002 479 (12%) 84%
Operating Expenses 282 354 325 (20%) (13%)
Operating Profit 601 648 154 (7%) 290%
EBITDA 831 906 402 (8%) 107%
Net Profit 529 614 215 (14%) 146%
Sales outside Mexico 3,678 3,380 3,094 9% 19%
Sales in México 2,887 3,013 2,521 (4%) 15%
Total sales (tons) 538 604 522 (11%) 3%

Product
 
Thousands
of tons
1Q '11
Millions of
pesos
1Q'11
Average
price per
ton 1Q'11
Thousands
 of tons
1Q'10
Millions
 of pesos
1Q'10
Average
price per
ton
1Q'10
Thousands
of tons
4Q'10
Millions
 of pesos
4Q'10
Average
price per
 ton
4Q'10
Comercial Profiles
234
2,362
10,094
284
2,488
8,760
261
2,428
9,303
Special Profiles
304
4,203
13,825
320
3,905
12,203
261
3,187
12,211
 
538
6565
10,202
604
6,393
10,584
522
5,615
10,757

     The comparative table of the three Quarter Income have been modified with the full cost system

Any forward-looking information contained herein is inherently subject to various risks, uncertainties and assumptions which, if incorrect, may cause actual results to vary materially from those anticipated, expected or estimated. The company assumes no obligation to update any forward-looking information contained herein


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
 
GRUPO SIMEC, S.A.B. DE C.V.      
CONSOLIDATED FINANCIAL STATEMENT
AT MARCH 31 OF 2011 AND 2010
(thousands of Mexican pesos)

REF
S
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
    AMOUNT
%
AMOUNT
%
s01 TOTAL ASSETS 27,691,000 100 27,449,233 100
           
s02 CURRENT ASSETS 14,102,998 51 13,321,144 49
s03 CASH AND SHORT-TERM INVESTMENTS 3,510,387 13 1,915,544 7
s04 ACCOUNTS AND NOTES RECEIVABLE (NET) 2,925,469 11 3,407,404 12
s05 OTHER ACCOUNTS AND NOTES RECEIVABLE 765,750 3 1,488,539 5
s06 INVENTORIES 6,819,309 25 6,245,142 23
s07 OTHER CURRENT ASSETS 82,083 0 264,515 1
s08 LONG-TERM 0 0 0 0
s09 ACCOUNTS AND NOTES RECEIVABLE (NET) 0 0 0 0
s10 INVESTMENT IN SHARES OF NON-CONSOLIDATED
SUBSIDIARIES AND ASSOCIATES
 0 0 0 0
s11 OTHER INVESTMENTS 0 0 0 0
s12 PROPERTY, PLANT AND EQUIPMENT (NET) 9,401,542 34 9,587,893 35
s13 LAND AND BULIDINGS 3,982,923 14 3,722,224 14
s14 MACHINERY AND INDUSTRIAL EQUIPMENT 13,039,574 47 12,869,908 47
s15 OTHER EQUIPMENT 237,805 1 232,483 1
s16 ACCUMULATED DEPRECIATION 8,285,512 30 7,627,548 28
s17 CONSTRUCTION IN PROGRESS 426,752 2 390,826 1
s18 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET) 4,030,844 15 4,398,698 16
s19 OTHER ASSETS 155,616 1 141,498 1
           
s20 TOTAL LIABILITIES 6,807,387 100 7,092,796 100
           
s21 CURRENT LIABILITIES 4,093,462 60 4,291,458 61
s22 SUPPLIERS 2,598,994 38 2,303,126 32
s23 BANK LOANS 0 0 0 0
s24 STOCK MARKET LOANS 3,614 0 3,764 0
s103 OTHER LOANS WITH COST 581,130 9 774,315 11
s25 TAXES PAYABLE 387,049 6 181,507 3
s26 OTHER CURRENT LIABILITIES WITHOUT COST 522,675 8 1,028,746 15
s27 LONG-TERM LIABILITIES 0 0 0 0
s28 BANK LOANS 0 0 0 0
s29 STOCK MARKET LOANS 0 0 0 0
s30 OTHER LOANS WITH COST 0 0 0 0
s31 DEFERRED LIABILITIES 0 0 0 0
s32 OTHER NON-CURRENT LIABILITIES WITHOUT COST 2,713,925 40 2,801,338 39
           
s33 CONSOLIDATED STOCKHOLDERS’ EQUITY 20,883,613 100 20,356,437 100
           
s34 MINORITY INTEREST 1,768,711 8 2,101,638 10
s35 MAJORITY INTEREST 19,114,902 92 18,254,799 90
s36 CONTRIBUTED CAPITAL 8,350,900 40 8,350,900 41
S79 CAPITAL STOCK 4,142,696 20 4,142,696 20
s39 PREMIUM ON ISSUANCE OF SHARES 4,208,204 20 4,208,204 21
s40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0 0 0
s41 EARNED CAPITAL 10,764,002 52 9,903,899 49
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,462,101 50 9,645,761 47
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT 301,901 1 258,138 1
s80 SHARES REPURCHASED 0 0 0 0


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)

REF
S
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
    AMOUNT % AMOUNT %
s03
 CASH AND SHORT-TERM INVESTMENTS 3,510,387 100 1,915,544 100
s46
 CASH 700,135 20 972,927 51
s47
 SHORT-TERM INVESTMENTS 2,810,252 80 942,617 49
           
s07
 OTHER CURRENT ASSETS 82,083 100 264,515 100
s81
 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
s82
 DISCONTINUED OPERATIONS 0 0 0 0
s83
 OTHER 82,083 100 264,515 100
           
s18
 OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET)   4,030,844 100   4,398,698 100
s48
 DEFERRED EXPENSES 2,222,085 55 2,591,121 59
s49
 GOODWILL 1,797,672 45 1,798,293 41
s51
 OTHER 11,087 0 9,284 0
           
s19
 OTHER ASSETS 155,616 100 141,498 100
s84
 INTANGIBLE ASSET FROM LABOR OBLIGATIONS 0 0 0 0
s85
 DERIVATIVE FINANCIAL INSTRUMENTS 0 0 0 0
s50
 DEFERRED TAXES 0 0 0 0
s86
 DISCONTINUED OPERATIONS 0 0 0 0
s87
 OTHER 155,616 100 141,498 100
           
s21
 CURRENT LIABILITIES 4,093,462 100 4,291,458 100
s52
 FOREIGN CURRENCY LIABILITIES 2,906,823 71 2,863,780 67
s53
 MEXICAN PESOS LIABILITIES 1,186,639 29 1,427,678 33
           
s26
 OTHER CURRENT LIABILITIES WITHOUT COST 522,675 100 1,028,746 100
s88
 DERIVATIVE FINANCIAL INSTRUMENTS 45,961 9 211,104 21
s89
 INTEREST LIABILITIES 5,413 1 5,300 1
s68
 PROVISIONS 0 0 0 0
s90
 DISCONTINUED OPERATIONS 0 0 0 0
s58
 OTHER CURRENT LIABILITIES 471,301 90 812,342 79
           
s27
 LONG-TERM LIABILITIES 0 100 0 100
s59
 FOREIGN CURRENCY LIABILITIES 0 0 0 0
s60
 MEXICAN PESOS LIABILITIES 0 0 0 0
           
s31
 DEFERRED LIABILITIES 0 100 0 100
s65
 NEGATIVE GOODWILL 0 0 0 0
s67
 OTHER 0 0 0 0
           
s32
 OTHER NON CURRENT LIABILITIES WITHOUT COST 2,713,925 100 2,801,338 100
s66
 DEFERRED TAXES 2,630,015 97 2,709,898 97
s91
 OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE 34,410 1 31,852 1
s92
 DISCONTINUED OPERATIONS 0 0 0 0
s69
 OTHER LIABILITIES 49,500 2 59,588 2
           
s79
 CAPITAL STOCK 4,142,696 100 4,142,696 100
s37
 CAPITAL STOCK (NOMINAL) 2,420,230 58 2,420,230 58
s69
 RESTATEMENT OF CAPITAL STOCK 1,722,466 42 1,722,466 42


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)

REF
S
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
 
 
AMOUNT
%
AMOUNT
 %
s42 RETAINED EARNINGS AND CAPITAL RESERVES 10,462,101 100 9,645,761 100
s93 LEGAL RESERVE 0 0 0 0
s43 RESERVE FOR REPURCHASE OF SHARES 200,612 2 200,612 2
s94 OTHER RESERVES 0 0 0 0
s95 RETAINED EARNINGS 9,778,636 93 8,875,093 92
s45 NET INCOME FOR THE YEAR 482,853 5 570,056 6
           
s44 OTHER ACCUMULATED COMPREHENSIVE RESULT 301,901 100 258,138 100
s70 ACCUMULATED MONETARY RESULT 0 0 0 0
s71 RESULT FROM HOLDING NON-MONETARY ASSETS 0 0 0 0
s96 CUMULATIVE RESULT FROM FOREIGN CURRENCY
TRANSLATION		   333,887   118   405,914   157
s97 CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL
INSTRUMENTS		   (31,986)   (11)   (147,776)   (57)
s98 CUMULATIVE EFFECT OF DEFERRED INCOME TAXES 0 0 0 0
s99 LABOR OBLIGATION ADJUSTMENT 0 0 0 0
s100 OTHER 0 0 0 0


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A. DE C.V.      
BALANCE SHEETS
OTHER CONCEPTS
(thousands of Mexican pesos)

REF
S
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
    AMOUNT AMOUNT
       
S72
 WORKING CAPITAL 10,009,536 9,029,686
S73
 PENSIONS FUND AND SENIORITY PREMIUMS 0 0
S74
 EXECUTIVES (*) 54 55
S75
 EMPLOYERS (*) 1,455 1,539
S76
 WORKERS (*) 3,081 2,787
S77
 COMMON SHARES (*) 497,709,214 497,709,214
S78
 REPURCHASED SHARES (*) 0 0
S101
 RESTRICTED CASH 0 0
S102
 NET DEBT OF NON CONSOLIDATED COMPANIES 581,130 770,229

(*) THESE ITEMS SHOULD BE EXPRESSED IN UNITS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
STATEMENTS OF INCOME
FROM JANUARY 1 TO MARCH 31 OF 2011 AND 2010
(thousands of Mexican pesos)

REF
R
 CATEGORIES
CURRENT YEAR
PREVIOUS YEAR
   
AMOUNT
%
AMOUNT
%
r01 NET SALES 6,565,451 100 6,392,994 100
r02 COST OF SALES 5,682,267 87 5,268,797 82
r03 GROSS PROFIT 883,184 13 1,124,197 18
r04 OPERATING EXPENSES 282,259 4 512,081 8
r05 OPERATING INCOME 600,925 9 612,116 10
r08 OTHER INCOME AND (EXPENSE), NET 938 0 10,229 0
r06 COMPREHENSIVE FINANCING RESULT (84,279) (1) (24,346) 0
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES
AND ASSOCIATES
0
0
0
0
r48 NON ORDINARY ITEMS 0 0 0 0
r09 INCOME BEFORE INCOME TAXES 517,584 8 597,999 9
r10 INCOME TAXES (11,169) 0 20,534 0
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 528,753 8 577,465 9
r14 DISCONTINUED OPERATIONS 0 0 0 0
r18 NET CONSOLIDATED INCOME 528,753 8 577,465 9
r19 NET INCOME OF MINORITY INTEREST 45,900 1 7,409 0
r20 NET INCOME OF MAJORITY INTEREST 482,853 7 570,056 9


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)

REF
R
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
 
 
AMOUNT
%
AMOUNT
%
r01 NET SALES 6,565,451 100 6,392,994 100
r21 DOMESTIC 2,887,125 44 3,012,812 47
r22 FOREIGN 3,678,326 56 3,380,182 53
r23 TRANSLATED INTO DOLLARS (***) 307,352 0 268,472 4
           
r08 OTHER INCOME AND (EXPENSE), NET 938 100 10,229 100
r49 OTHER INCOME AND (EXPENSE), NET 938 100 10,229 100
r34 EMPLOYEES’ PROFIT SHARING EXPENSES 0 0 0 0
r35 DEFERRED EMPLOYEES’ PROFIT SHARING 0 0 0 0
           
r06 COMPREHENSIVE FINANCING RESULT (84,279) 100 (24,346) 100
r24 INTEREST EXPENSE 3,209 (4) 0 0)
r42 GAIN (LOSS) ON RESTATEMENT OF UDI’S 0 0 0 0
r45 OTHER FINANCE COSTS 0 0 0 0
r26 INTEREST INCOME 5,379 (6) 2,580 (11)
r46 OTHER FINANCIAL PRODUCTS 0 0 0 0
r25 FOREIGN EXCHANGE GAIN (LOSS), NET (86,449) 103 (26,926) 111
r28 RESULT FROM MONETARY POSITION 0 0 0 0
           
r10 INCOME TAXES (11,169) 100 20,534 100
r32 INCOME TAX 22,133 (198) 22,231 108
r33 DEFERRED INCOME TAX (33,302) 298 (1,697) (8)

(***) THOUSANDS OF DOLLARS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)

REF
R
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
 
 
AMOUNT
AMOUNT
       
r36
 TOTAL SALES 6,634,778 6,593,212
r37
 TAX RESULT FOR THE YEAR 0 0
r38
 NET SALES (**) 24,729,052 20,645,867
r39
 OPERATION INCOME (**) 1,148,202 501,313
r40
 NET INCOME OF MAJORITY INTEREST (**) 997,481 918,154
r41
 NET CONSOLIDATED INCOME (**) 1,233,964 1,294,351
r47
 OPERATIVE DEPRECIATION AND AMORTIZATION 230,039 258,484

(**) RESTATED INFORMATION FOR THE LAST TWELVE MONTHS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
QUARTERLY STATEMENTS OF INCOME
FROM JANUARY 1 TO MARCH 31 OF 2011 AND 2010
(thousands of Mexican pesos)

REF
R
 CATEGORIES CURRENT YEAR PREVIOUS YEAR
   
AMOUNT
%
AMOUNT
%
r01 NET SALES 6,565,451 100 6,392,994 100
r02 COST OF SALES 5,682,267 87 5,268,797 82
r03 GROSS PROFIT 883,184 13 1,124,197 18
r04 OPERATING EXPENSES 282,259 4 512,081 8
r05 OPERATING INCOME 600,925 9 612,116 10
r08 OTHER INCOME AND (EXPENSE), NET 938 0 10,229 0
r06 COMPREHENSIVE FINANCING RESULT (84,279) (1) (24,346) 0
r12 EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES
AND ASSOCIATES
0
0
0
0
r48 NON ORDINARY ITEMS 0 0 0 0
r09 INCOME BEFORE INCOME TAXES 517,584 8 597,999 9
r10 INCOME TAXES (11,169) 0 20,534 0
r11 INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS 528,753 8 577,465 9
r14 DISCONTINUED OPERATIONS 0 0 0 0
r18 NET CONSOLIDATED INCOME 528,753 8 577,465 9
r19 NET INCOME OF MINORITY INTEREST 45,900 1 7,409 0
r20 NET INCOME OF MAJORITY INTEREST 482,853 7 570,056 9


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
QUARTERLY STATEMENTS OF INCOME
BREAKDOWN OF MAIN CONCEPTS
(thousands of Mexican pesos)

REF
R
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
    AMOUNT
%
AMOUNT
%
rt01 NET SALES 6,565,451 100 6,392,994 100
rt21 DOMESTIC 2,887,125 44 3,012,812 47
rt22 FOREIGN 3,678,326 56 3,380,182 53
rt23 TRANSLATED INTO DOLLARS (***) 307,352 5 268,472 4
           
rt08 OTHER INCOME AND (EXPENSE), NET 938 100 10,229 100
rt49 OTHER INCOME AND (EXPENSE), NET 938 100 10,229 100
rt34 EMPLOYEES’ PROFIT SHARING EXPENSES 0 0 0 0
rt35 DEFERRED EMPLOYEES’ PROFIT SHARING 0 0 0 0
           
rt06 COMPREHENSIVE FINANCING RESULT (84,279) 100 (24,346) 100
rt24 INTEREST EXPENSE 3,209 (4) 0 0
rt42 GAIN (LOSS) ON RESTATEMENT OF UDI’S 0 0 0 0
rt45 OTHER FINANCE COSTS 0 0 0 0
rt26 INTEREST INCOME 5,379 (6) 2,580 (11)
rt46 OTHER FINANCIAL PRODUCTS 0 0 0 0
rt25 FOREIGN EXCHANGE GAIN (LOSS), NET (86,449) 103 (26,926) 111
rt28 RESULT FROM MONETARY POSITION 0 0 0 0
           
rt10 INCOME TAXES (11,169) 100 20,534 100
rt32 INCOME TAX 22,133 (198) 22,231 108
rt33 DEFERRED INCOME TAX (33,302) 298 (1,697) (8)

(***) THOUSANDS OF DOLLARS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
QUARTERLY STATEMENTS OF INCOME
OTHER CONCEPTS
(thousands of Mexican pesos)

REF
RT
CONCEPTS
CURRENT
YEAR		 PREVIOUS
YEAR
    AMOUNT AMOUNT
rt47
 OPERATIVE DEPRECIATION AND AMORTIZATION
230,039
258,484


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR:20110
GRUPO SIMEC, S.A.B. DE C.V.      
STATE OF CASH FLOW DIRECT METHOD)
FROM JANUARY 1 TO MARCH 31 OF 2011 AND 2010
(thousands of pesos)

REF
C
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
    AMOUNT AMOUNT
       
  ACTIVITIES OF OPERATION    
e01 INCOME (LOSS) BEFORE INCOME TAXES 517,584 597,999
e02 + (-) ITEMS NOT REQUIRING CASH 0 0
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 224,660 254,616
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES (3,596) 0
e05 CASH FLOW BEFORE INCOME TAX 738,648 852,615
e06 CASH FLOW PROVIDED OR USED IN OPERATION (435,997) (896,490)
e07 CASH FLOW PROVIDED OF OPERATING ACTIVITIES 302,6561 (43,875)
  INVESTMENT ACTIVITIES    
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (164,645) (51,918)
e09 CASH FLOW AFTER INVESTING ACTIVITIES 138,006 (95,793)
  FINANCING ACTIVITIES    
e10 NET CASH FROM FINANCING ACTIVITIES 0) 63,607
e11 NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
138,006
(32,186)
e12 TRANSLATION DIFFERENCES IN CASH AND CASH
EQUIVALENTS
(12,536)
(1,170)
e13 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD 3,384,917 1,948,900
e14 CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 3,510,387 1,915,544


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
STATE OF CASH FLOW (INDIRECT METHOD)
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)

REF
C
CONCEPTS
CURRENT YEAR
PREVIOUS YEAR
   
  
AMOUNT
AMOUNT
e02 + (-) ITEMS NOT REQUIRING CASH 0 0
e15 + ESTIMATES FOR THE PERIOD 0 0
e16 + PROVISIONS FOR THE PERIOD 0 0
e17 + (-) OTHER UNREALIZED ITEMS 0 0
       
e03 + (-) ITEMS RELATED TO INVESTING ACTIVITIES 224,660 254,616
e18 + DEPRECIATION AND AMORTIZATION FOR THE PERIOD 230,039 258,484
e19 (-) + GAIN OR LOSS ON SALE PROPERTY, PLANT AND EQUIPMENT 0 0
e20 + IMPAIRMENT LOSS 0 0
e21 (-) + EQUITY IN RESULTS OF ASSOCIATES AND JOINT VENTURES 0 0
e22 (-) DIVIDENDS RECEIVED 0 0
e23 (-) INTEREST INCOME (5,379) .(2,580)
e24 (-) + OTHER ITEMS 0 (1,288)
       
e04 + (-) ITEMS RELATED TO FINANCING ACTIVITIES (3,596) 0
e25 + ACCRUED INTEREST (3,596) 0
e26 + (-) OTHER ITEMS 0 0
       
e06 CASH FLOW PROVIDED OR USED IN OPERATION (435,997) (896,490)
e27 + (-) DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE (497,748) (1,396,044)
e28 + (-) DECREASE (INCREASE) IN INVENTORIES (406,231) 337,077
e29 + (-)DECREASE (INCREASE) IN IN OTHER ACCOUNT RECEIVABLES 51,706 (25,282)
e30 + (-) INCREASE DECREASE IN SUPPLIERS 492,893 430,017
e31 + (-)INCREASE DECREASE IN OTHER LIABILITIES (76,617) (215,527)
e32 + (-) INCOME TAXES PAID OR RETURNED 0 (26,731)
       
e08 NET CASH FLOW FROM INVESTING ACTIVITIES (164,645) (51,918)
e33 (-) PERMANENT INVESTMENT IN SHARES 0 0
e34 + DISPOSITION OF PERMANENT INVESTMENT IN SHARES 0 0
e35 (-) INVESTMENT IN PROPERTY PLANT AND EQUIPMENT (146,785) (54,498)
e36 + SALE OF PROPERTY PLANT AND EQUIPMENT 0 0
e37 (-) INVESTMENT IN INTANGIBLE ASSETS 0 0
e38 + DISPOSITION OF INTANGIBLE ASSETS 0 0
e39 + OTHER PERMANENT INVESTMENTS 0 0
e40 + DISPOSITION OF OTHER PERMANENT INVESTMENTS 0 0
e41 + DIVIDEND RECEIVED 0 0
e42 + INTEREST RECEIVED 5,379 2,580
e43 + (-) DECREASE (INCREASE) ADVANCES AND LOANS TO THIRD PARTS 0 0
e44 + (-) OTHER ITEMS (23,239) 0
       
e10 NET CASH FRON FINANCING ACTIVITIES 0 63,607
e45 + BANK FINANCING 0 0
e46 + STOCK MARKET FINANCING 0 0
e47 + OTHER FINANCING 0 63,607
e48 (-) BANK FINANCING AMORTIZATION 0 0
e49 (-) STOCK MARKET FINANCING AMORTIZATION 0 0
e50 (-) OTHER FINANCING AMORTIZATION 0 0
e51 + (-) INCREASE (DECREASE ) IN CAPITAL STOCK 0 0
e52 (-) DIVIDENS PAID 0 0
e53 + PREMIUM ON ISSUANCE OF SHARES 0 0
e54 + CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES 0 0
e55 (-) INTEREST EXPENSE 0 0
e56 (-) REPURCHASE OF SHARES 0 0
e57 + (-) OTHER ITEMS 0 0


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
DATE PER SHARE
CONSOLIDATED

REF
D
CATEGORIES
QUARTER OF PRESENT
FINANCIAL YEAR
QUARTER OF PREVIOUS
FINANCIAL YEAR
       
       
d01 BASIC PROFIT PER ORDINARY SHARE (**)
$   2.60                
$   2.60                
d02 BASIC PROFIT PER PREFERRED SHARE (**)
$   0.00                
$   0.00                
d03 DILUTED PROFIT PER ORDINARY SHARE (**)
$   0.00                
$   0.00                
d04 EARNINGS (LOSS) BEFORE DISCONTINUED OPERATIONS PER
 
 
  COMMON SHARE (**)
$   2.60                
$   2.60                
d05 DISCONTINUED OPERATIONS EFFECT ON EARNING (LOSS) PER
SHARE (**)
 
$   0.00                
 
$   0.00                
d08 CARRYING VALUE PER SHARE
$ 38.41                
$ 36.68                
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
0.77 times  
0.99 times  
d12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE
12.50 times    
13.95 times    
d13 MARKET PRICE TO BASIC PROFIT PER PREFERENT SHARE (**)
0.00 times  
0.00 times  

(**) TO CALCULATE THE DATE PER SHARE USE THE NET INCOME FOR THE LAST TWELVE MONTHS.

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
RATIOS
CONSOLIDATED

REF
P		 CATEGORIES QUARTER OF PRESENT
FINANCIAL YEAR		 QUARTER OF PREVIOUS
FINANCIAL YEAR
       
  YIELD    
p01 NET INCOME TO NET SALES 8.05% 9.03%
p02 NET INCOME TO STOCKHOLDERS’ EQUITY (**) 5.91% 6.36%
p03 NET INCOME TO TOTAL ASSETS (**) 4.46% 4.72%
p04 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0.00% 0.00%
p05 INCOME DUE TO MONETARY POSITION TO NET INCOME 0.00% 0.00%
       
  ACTIVITY    
p06 NET SALES TO NET ASSETS (**) 0.89 times 0.75 times
p07 NET SALES TO FIXED ASSETS (**) 2.63 times 2.15 times
p08 INVENTORIES TURNOVER (**) 0.83 times 2.89 times
p09 ACCOUNTS RECEIVABLE IN DAYS OF SALES 35 days 41 days
p10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 0.55% 1.25%
       
  LEVERAGE    
p11 TOTAL LIABILITIES TO TOTAL ASSETS 24.58% 25.84%
p12 TOTAL LIABILITIES TO STOCKHOLDERS’ EQUITY 0.33 times 0.35 times
p13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 42.70% 40.38%
p14 LONG-TERM LIABILITIES TO FIXED ASSETS 0.00% 0.00%
p15 OPERATING INCOME TO INTEREST PAID 187.26 times 0.00 times
p16 NET SALES TO TOTAL LIABILITIES (**) 3.63 times 2.91 times
       
  LIQUIDITY    
p17 CURRENT ASSETS TO CURRENT LIABILITIES 3.45 times 3.10 times
p18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 1.78 times 1.65 times
p19 CURRENT ASSETS TO TOTAL LIABILITIES 2.07 times 1.88 times
p20 AVAILABLE ASSETS TO CURRENT LIABILITIES 85.76% 44.64%


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
DIRECTOR REPORT

Comparative first quarter of 2011 vs. first quarter of 2010

Net Sales

Net sales of the company increased 3% by the combination of: improved in the sales price and fall of volume of shipments, sales rose from Ps. 6,393 millions in the first quarter of 2010 to Ps. 6,565 millions in the same period of 2011. Shipments of finished steel products decreased 11%, from 604 thousand tons in the first quarter of 2010 compared to 538 thousand tons in the same period of 2011. Total sales outside of Mexico in the first quarter of 2011 increased 9% to Ps. 3,678 millions compared to Ps. 3,380 millions in the same period of 2010. The Mexican sales decreased 4% from Ps. 3,013 millions in the first quarter of 2010 to Ps. 2,887 millions in the same period of 2011. The increase in sales can be explained due to improvement in the price of the subsidiary Simrep, because the volume of tons shipments in both periods are similar, while the finished products of the facilities of Mexico showed a fall in the first quarter of 2011, by the failure of the transformer in the plant of Guadalajara. Comparatively with the same period of 2010, sales in volume decreased 66 thousand shipment in 2011. The average price of steel products increased 15% in the first quarter of 2011 compared with the same period of 2010.

Direct Cost of Sales

Direct cost of sales increased 5% from Ps. 5,391 millions in the first quarter of 2010 to Ps. 5,682 millions in the same period of 2011. Direct cost of sales as a percentage of net sales in the first quarter of 2011 represented 87% compared to 84% the same period of previous year. The increase is due to increase in price of raw materials. The average cost of finished steel products in the first quarter of 2011 increased 18% compared to the same period of 2010.

Marginal Profit

Marginal profit of the company for the same period decreased 12% from Ps. 1,002 millions in 2010 to Ps. 883 millions in the same period of 2011. Marginal profit as a percentage of net sales in the first quarter of 2011 was 13% and for the same period of 2010 was 16%. The fall in marginal profit is due to fall in volume of shipments and increase in raw materials during the first quarter of 2011 compared with the same period of 2010.

Operating Expenses

Operating expenses decrease 20% to Ps. 282 millions in the first quarter of 2011 compared to Ps. 354 millions in the same period of 2010, and represented 4% of net sales in the first quarter of 2011 and 6% in the first quarter of 2010.

Operating Income

Operating income decreased 7% from Ps. 648 millions for the first quarter of 2010 compared to Ps. 601 millions in the same period of 2011. Operating income as a percentage of net sales was 10% in the first quarter of 2010 compared to 9% in the same period of 2011. The decreased in operating income is due to fall in volume of shipments, increased in raw material during the first quarter of 2011 compared with the same period of 2010.


EBITDA

The ebitda of the company for the first quarter of 2011, show a decreased of 8%, by the above mentioned, to fall from Ps. 906 millions in the first quarter of 2010 compared against Ps. 831 millions of the first quarter of 2011,

Comprehensive Financial Cost

Comprehensive financial cost in the first quarter of 2011 represented an expense of Ps. 84 millions compared with an expense of Ps. 24 millions in the same period of 2010. Net interest income was Ps. 2 millions in the first quarter of 2011 compared with a net gain of Ps. 3 millions in the same period of 2010. At the same time, Simec registered an exchange loss of Ps. 86 millions in the first quarter of 2011 compared with an exchange loss of Ps. 27 millions in the same period of 2010, due to 5.3% revaluation of the peso versus the dollar as of March 31, 2011 compared to December 31, 2010.

Other Expenses (Income) net

The company recorded other income net of Ps. 1 millions in the first quarter of 2011 compared to other income net of Ps. 10 millions in the same period of 2010.

Income Taxes

Income Taxes recorded an income of Ps. 11 millions in the first quarter of 2011 (including the income of Ps. 33 millions of deferred income taxes) compared to an expense of Ps. 21 millions in the same period of 2010 (including the benefits of Ps. 2 millions of deferred income taxes).

Net Income

As a result of the foregoing, net income decreased 14% to Ps. 529 millions in the first quarter of 2011 versus Ps. 614 millions in the same period of 2010.

Liquidity and Capital Resources

As of March 31, 2011, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998, or Ps. 3.6 millions (accrued interest on March 31, 2011 was U.S. $452,189, or Ps. 5.4 millions). As of December 31, 2010, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998 (accrued interest on December 31, 2010 was U.S. $445,314).

Comparative first quarter of 2011 vs. fourth quarter of 2010

Net Sales

Net sales of the company increased 17% from Ps. 5,615 millions of the fourth quarter of 2010 to Ps. 6,565 millions to the first quarter of 2011. Sales in tons of finished steel increased 3% from 522 thousand tons in the fourth quarter of 2010 compared with 538 thousand tons in the first quarter of 2011. The total sales outside of Mexico for the first quarter of 2011 increased 19% to Ps. 3,094 millions in the fourth quarter of 2010, compared with Ps. 3,678 millions for the first quarter of 2011. The Mexican sales increased 15% from Ps. 2,521 millions in the fourth quarter of 2010 to Ps. 2,887 millions in the first quarter of 2011. Prices of finished products sold in the first quarter 2011 increased 13% compared to the fourth quarter 2010.

Direct Cost of Sales

Direct cost of sales increased 11% from Ps. 5,136 millions in the fourth quarter of 2010 to Ps. 5,682 millions in the first quarter of 2011. With respect to sales, in the first quarter of 2011, the direct cost of sales represent 87% compared to 91% for the fourth quarter of 2010. The average cost of raw materials used to produce steel products increased 7% in the first quarter of 2011 versus the fourth quarter of 2010, primarily as a result of increase in the volume of shipments and increases in the price of raw materials.


Marginal (Loss) Profit

Marginal profit for the first quarter of 2011 grew to Ps. 883 millions compared with the profit of Ps. 479 millions in the fourth quarter of 2010, this represented an increased of 84%. The marginal profit as a percentage of net sales for the first quarter of 2011 was 13% compared with 9% for the fourth quarter of 2010. The increase in marginal profit is due to the swift improved in the volume of the shipments and improved of the sales price.

Operating Expenses

Operating expenses represented to Ps. 282 millions in the first quarter of 2011 versus Ps. 325 millions in the fourth quarter of 2010, equivalent to a decreased of 13%. Operating expenses as a percentage of net sales represented 4% during the first quarter of 2011 and 6% for the fourth quarter of 2010.

Operating (Loss) Income

Operating income was Ps. 601 millions in the first quarter of 2011 compared to Ps. 154 millions of the fourth quarter of 2010. The operating income increase 290% between both quarters. The operating income as a percentage of net sales in the first quarter of 2011 was 9% compared to a operating loss of 3% in the fourth quarter 2010. The increase in operating income is due to the improved in shipments and sales price for the first quarter of 2011 compared with the fourth quarter of 2010.

EBITDA

The ebitda of the first quarter of 2011 was of Ps. 831 millions compared to Ps. 402 millions of the fourth quarter of 2010, an increased of Ps 429 millions.

Comprehensive Financial Cost

Comprehensive financial cost for the first quarter of 2011 represented an expense of Ps. 84 millions compared with an expense of Ps. 10 millions for the fourth quarter of 2010. Net interest income was Ps. 2 millions in the first quarter of 2011 compared with a zero cost in the fourth quarter of 2010. At the same time we registered an exchange net loss of Ps. 86 millions in the first quarter of 2011 compared with an exchange net loss of Ps. 10 millions in the fourth quarter of 2010.

Other Expenses (Income) net

The company recorded other income net of Ps. 1 millions in the first quarter of 2011 compared with other expenses net of Ps. 14 millions for the fourth quarter of 2010.

Income Taxes

Income Taxes, the company recorded an income of Ps. 11 millions in the first quarter of 2011 (include an income of income tax deferred for Ps 33 millions) compared against an income of Ps. 85 millions of income for income tax for the fourth quarter of 2010.

Income (Loss)

As a result of the foregoing, the company recorded a net income of Ps. 529 millions in the first quarter 2011 compared to a net income of Ps. 215 millions in the fourth quarter 2010.


(Millions of pesos)
1Q ‘11
1Q ‘10
4Q ‘10
1Q´11 vs
1Q'10
1Q´11 vs
4Q´10
Sales 6,565 6,393 5,615 3% 17%
Cost of Sales 5,682 5,391 5,136 5% 11%
Gross Profit 883 1.002 479 (12%) 84%
Operating Expenses 282 354 325 (20%) (13%)
Operating Profit 601 648 154 (7%) 290%
EBITDA 831 906 402 (8%) 107%
Net Profit 529 614 215 (14%) 146%
Sales outside Mexico 3,678 3,380 3,094 9% 19%
Sales in México 2,887 3,013 2,521 (4%) 15%
Total sales (tons) 538 604 522 (11%) 3%

Product
 
Thousands
of tons
1Q '11
Millions of
pesos
1Q'11
Average
price per
ton 1Q'11
Thousands
of tons
1Q'10
Millions
of pesos
1Q'10
Average
price per
ton
1Q'10
Thousands
of tons
4Q'10
Millions
of pesos
4Q'10
Average
price per
ton
4Q'10
Comercial Profiles
234
2,362
10,094
284
2,488
8,760
261
2,428
9,303
Special Profiles
304
4,203
13,825
320
3,905
12,203
261
3,187
12,211
 
538
6565
10,202
604
6,393
10,584
522
5,615
10,757

The comparative table of the three Quarter Income have been modified with the full cost system
     Any forward-looking information contained herein is inherently subject to various risks, uncertainties and assumptions which, if incorrect, may cause actual results to vary materially from those anticipated, expected or estimated. The company assumes no obligation to update any forward-looking information contained herein

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC
QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.    
FINANCIAL STATEMENT NOTES
   
CONSOLIDATED

(1) Operations preparation bases and summary of significant accounting policies:

Grupo Simec, S.A. de C.V. and its Subsidiaries (“the Company”) are subsidiaries of Industrias CH, S.A. de C.V. (“ICH”), and their main activities consist of the manufacturing and sale of steel products primarily destined for the construction sector of Mexico and other countries.

Significant accounting policies and practices followed by the Companies which affect the principal captions of the financial statements are described below:

a. Financial statement presentation - Below is a summary of the most significant accounting policies and practices used in the preparation of the consolidated financial statements, in conformity with Mexican Financial Reporting Standards (MFRS), which include Bulletins and Circulars issued by the Accounting Principles Commission (CPC) of the Mexican Institute of Public Accountants (IMCP) which have not been amended, replaced or abrogated by MFRS issued by the Mexican Financial Reporting Standards Research and Development Board (Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera, A.C. (CINIF).

b.  All significant intercompany balances and transactions have been eliminated in consolidation.

c.  Cash and cash equivalents - The Company considers short-term investments with original maturities not greater than three months to be cash equivalent. Cash equivalents include temporary investments and Mexican Government Treasury Bonds, and are stated at market value, which approximates cost plus earned interest. Any increase in market value is credited to operations for the period.

d. Inventories – Are valued to the full cost average by Domestic subsidiaries, and the foreing subsidiaries are valued on a last-in, first-out(LIFO). For translation effects into MFRS the inventories have benn adjusted from LIFO to average full cost system.
Billet finished goods and work in process, have been valued to the full cost.
Raw materials, materials, supplies and rollers, at the average cost.

The Company presents as non-current inventories certains raw materials (Coke) rollers and spare parts, which according to historical data and production trends will not be used within a one-year period.

e.- Derivative financial instruments-- During 2010, 2009 and 2008 the Company used derivative financial instruments for hedging risks associated with natural gas prices for which it conducted studies on historical consumption, future requirement and commitments acquired, thus diminishing its exposure to risks other than its normal operating risks.

To mitigate the risks associated with changes in natural gas prices occurring naturally as a result of the supply and demand on international markets, the Company uses natural gas cash-flow exchange contracts or natural gas swaps to offset fluctuations in the price of natural gas, whereby the Company receives a floating price and pays a fixed price. Fluctuations in natural gas prices from volumes consumed are recognized as part of the Company’s operating cost.


The fair value of these assets or liabilities is restated at the end of each month based on the new estimate. The Company periodically evaluates the changes in cash flows of the derivative instrument to analyze if the swaps are highly effective for mitigating the exposure to natural gas price fluctuations. A hedge instrument is considered to be highly effective when changes in its fair value or cash flows of the primary position are compensated on a regular or cumulatively basis, by changes in fair value or cash flows of the hedging instrument in a range between 80% and 125%. In 2010, 2009 and 2008 the fair value of derivatives that did not qualify for hedge accounting was adjusted through Statement of Income. For the derivatives that qualified for hedge accounting their fair value was adjusted through the Stockholders’ equity in the caption Fair value of derivative financial instruments until such time as the related item the derivative hedges is recognized in income. At that time, the fair value included in Stockholders’ equity is also recognized in income. The Company is using derivative financial instruments for hedging risks associated with natural gas prices and conducted studies on historical consumption, future requirements and commitments; thus it avoided exposure to risks other than the normal operating risks. Management of the Company examines its financial risks by continually analyzing price, credit and liquidity risks.

f. Property, plant and equipment - Property, plant and equipment of domestic origin are restated by using factors derived from The National Consumer Price Index (“NCPI”) from the date of their acquisition, and imported machinery and equipment are restated by applying devaluation and inflation factors of the country of origin, until December 31, 2007. Depreciation recorded in the consolidated statement of income (loss) is computed based upon the estimated useful life and the restated cost of each asset. In addition, Financial expense incurred during the construction period is capitalized as construction in progress. The estimated useful lives of assets as of December 31, 2010 are as follows:

  Years
Buildings 15 to 50
Machinery and equipment 10 to 40
Buildings and improvements (Republic)
10 to 25
Land improvements (Republic) 5 to 25
Machinery and equipment (Republic) 5 to 20

g. Other assets - Organization and pre-operating expenses are capitalized and their amortization is calculated by the straight-line method over a period of 20 years.

h. Seniority premiums and severance payments – According to Federal Labor Law, employees are entitled to seniority premiums after fifteen years or more of services. These premiums are recognized as expenses in the years in which the services are rendered, using actuarial calculations based on the projected unit credit method, and since 1996 by applying real interest and salary increases.

Any other payments to which employees may be entitled in case of separation, disability or death, are charged to operations in the period in which they become payable.

i. Pension plan - Until 1995, the Company provided pension benefits for all personnel with a minimum of 10 years of service and 35 years of age. The Company had established an irrevocable trust for its contributions, which were based on actuarial calculations. In December 1995, the board of directors of the Company, in agreement with the trade union, discontinued these benefits and related contributions to the trust fund. This decision was made because of the new Mexican pension fund system, Administradoras de Fondos para el Retiro, which establishes similar benefits for the employees. The balance of the trust fund will be applied to the retirement benefits of qualifying employees until the fund is exhausted due to the irrevocable status of the fund.

The Company does not have any contractual obligation regarding the payment of pensions of retirements.


j. Income taxes - In 1999, the Mexican Institute of Public Accountants issued Bulletin D-4, “Accounting for Income and Asset Taxes and Employee Profit Sharing”, which is effective for all fiscal years beginning January 1, 2000. Bulletin D-4 establishes financial accounting and reporting standards for the effects of asset tax, income tax and employee profit sharing that result from enterprise activities during the current and preceding years.

The Company and its subsidiaries are included in the consolidated tax returns of the company's parent.

k. Foreign currency transactions and exchange differences – All transactions in foreign currency are recorded at the exchange rates prevailing on the date of their execution or liquidation. Foreign currency denominated assets and liabilities are translated at the exchange rates prevailing at the balance sheet date. Any exchange differences incurred with regard to assets or liabilities denominated in foreign currency are charged to operations of the period and are included in financial income (expense) in the accompanying consolidated statements of income (loss).

For consolidation purposes, the financial statements of the foreign subsidiaries, were translated into pesos in conformity with Mexican accounting Bulletin MFRS B-15, Transactions in Foreign Currency.

The first step in the process of conversion of financial information of the operations is the determination of the functional currency, which is in first instance the currency of primary the economic surroundings of the foreign operation; nevertheless, despite the previous thing, the functional currency can differ from the premises or registry, in the measurement that this one does not represent the currency that fundamentally affects the cash flow of the operations abroad. The financial statements of the foreign subsidiaries were turned to Mexican pesos with the following procedure:

- Applying the prevailing exchange rate at the consolidated balance date for monetary assets and liabilities.
- Applying the prevailing historical exchange rate for nonmonetary assets and liabilities and for stockholders’ equity accounts.
- Applying the prevailing the historical exchange rate at the consolidated balance sheet date for revenues and expenses during the reporting period
- The resulting effect of translation, the process of consolidation and to apply the participation method, is recorded in stockholders’ equity under the accumulated effect by conversion forming part of the Comprehensive Income.

l. Geographic concentration of credit risk - The Company sells its products primarily to distributors for the construction industry with no specific geographic concentration. Additionally, no single customer accounted for a significant amount of the Company's sales, and there were no significant accounts receivable from a single customer or affiliate at December 31, 2010 sales of ten customers accounted for approximately 25% of the Republic’s sales. The Company performs evaluations of its customers' credit histories and establishes and allowance for doubtful accounts based upon the credit risk of specific customers and historical trends.

m. Other income (expenses) - Other income (expenses) shown in the consolidated statements of operations primarily includes other financial operations.

(2) Financial Debt:

As of March 31, 2011, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998, or Ps. 3.6 million (accrued interest on March 31, 2011 was U.S. $452,297, or Ps. 3.7 million). As of December 31, 2010, Simec’s total consolidated debt consisted of U.S. $302,000 of 8 7/8% medium-term notes (“MTN's”) due 1998 (accrued interest on December 31, 2010 was U.S. $445,314).


(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. 5,077 (U.S. $424,207) at March 31, 2011, (included in accrued liabilities) relating to these actions; the reduction of this reserve from previous levels reflects clean-up activities undertaken by Simec. Management believes the ultimate liability with respect to this matter will not exceed the amounts that have been accrued.

b. The Company is subject to various other legal proceeding and claims, which have arisen, in the ordinary course of its business. It is the opinion of management that their ultimate resolution will not have a material adverse effect on the Company’s consolidated financial position or consolidated results of operations.


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR:2011
GRUPO SIMEC, S.A.B. DE C.V.    
RELATIONS OF SHARES INVESTMENTS
   
CONSOLIDATED

COMPANY NAME
MAIN ACTIVITIES
NUMBER OF
SHARES
OWNERSHIP
SUBSIDIARIES      
Cia Siderurgica de Guadalajara Production and sales of steel products   99.99
Simec International Production and sales of steel products   99.99
Arrendadora Simec Production and sales of steel products   100.00
Undershaft Sub-Holding   100.00
Pacific Steel Scrap purchase   100.00
Cia. Siderúrgica del Pacífico Rent of land   99.99
Coordinadora de Servicios Siderúrgicos de Calidad Administrative services   100.00
Comercializadora Simec Sales of steel products   99.99
Industrias del Acero y del Alambre Sales of steel products   99.99
Procesadora Mexicali Scrap purchase   99.99
Servicios Simec Administrative services   100.00
Sistemas de Transporte de Baja California Freight services   100.00
Operadora de Metales Administrative services   100.00
Operadora de Servicios Siderúrgicos de Tlaxcala Administrative services   100.00
Administradora de Servicios Siderúrgicos de Tlaxcala Administrative services   100.00
Operadora de Servicios de la Industria Siderúrgica Administrative services   100.00
SimRep Sub-Holding   50.22
Republic Engineered Products Production and sales of steel products   50.22
CSG Comercial Sales of steel products   99.95
Comercializadora de Productos de Aceros de Tlaxcala Sales of steel products   99.95
Siderúrgica de Baja California Sales of steel products   99.95
Corporación Aceros DM Sub-Holding   99.99
Productos Siderurgicos de Tlaxcala Sales of steel products   100.00
Comercializadora MSAN Sales of steel products   100.00
Comercializadora Aceros DM Sales of steel products   100.00
Promotora de Aceros San Luis Sales of steel products   100.00
Arrendadora Norte de Matamoros Land   85.00
Procesadora Industrial Administrative services   99.99
Acero Transporte San Freight services   100.00
Simec International 2 Production and sales of steel products   99.99
Simec International 3 Production and sales of steel products   99.99
Simec International 4 Production and sales of steel products   99.99
Simec International 5 Production and sales of steel products   99.99
Simec International 6 Production and sales of steel products   99.99
Simec International 7 Production and sales of steel products   99.99
Corporación ASL Sales of steel products   99.99
Simec Acero Sales of steel products   100.00
Simec USA Sales of steel products   100.00
Simec Steel Sales of steel products   100.00
Pacific Steel Projects Administrative services   100.00

TOTAL INVESTMENT IN SUBSIDIARIES		      
 
ASSOCIATEDS		      
      0
TOTAL INVESTMENT IN ASSOCIATEDS     0
OTHER PERMANENT INVESTMENTS     0.00

TOTAL		     0

NOTES


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC  
QUARTER: 1 YEAR:2011
GRUPO SIMEC, S.A.B. DE C.V.    
CREDITS BREAK DOWN
(THOUSANDS OF MEXICAN PESOS)
 
   
CONSOLIDATED

Amortization
Rate of
Denominated in Pesos (Thousands of Pesos)
Denominated in Foreign Currency (Thousands of
Pesos)
Credit Type / Institution Date Interest
Time Interval
Time Interval
      Current Until
1		 Until
2		 Until
3		 Until
4		 Until
5		 Current Until
1		 Until
2		 Until
3		 Until
4		 Until
5
     
Year
Year
Years
Years
Years
Years
or
Year
Year
Years
Years
Years
Years
or
     
 
 
 
 
 
More
 
 
 
 
 
More
BANKS                            
       
0
  
0
  
0
  
0
  
0
  
0
  
0
  
0
  
0
  
0
  
0
  
0
     

0
0
0
0
0
0
0
0
0
0
0
0
                             
TOTAL
BANKS		    
0
0
0
0
0
0
0
0
0
0
0
0
                             
                             
                             
LISTED IN
THE
STOCK
 EXCHANGE		                            
UNSECURED
DEBT		                            
Medium Term
Notes
15/12/1998
9.33
0
0
0
0
0
0
3,614
0
0
0
0
0
                             
                             
TOTAL
STOCK
EXCHANGE		     0 0 0 0 0 0 3,614 0 0 0 0 0
                             
                             
                             
SUPPLIERS
  		                           
Various    
700,280
0
0
0
0
0
1,898,714
0
0
0
0
0
                             
TOTAL
SUPPLIERS		     700,280 0 0 0 0 0 1,898,714 0 0 0 0 0
                             
OTHER
LOANS WITH
COST		     0.25                  581,130          
       


                                     
TOTAL    
0
0
0
0
0
0
0
0
0
0
0
0


                             
OTHER
CURRENT
LIABILITIES
WITHOUT
COST		                                                                                    
Various    
99,310
0
0
0
0
0
423,365
0
0
0
0
0
TOTAL    
99,310
0
0
0
0
0
423,365
0
0
0
0
0
                             
                             
TOTAL    
799,590
0
0
0
0
0
2,906,823
0
0
0
0
0

NOTES: The exchange rate of the peso to the U.S. Dollar at March 31, 2011 was Ps. 11.9678


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
MONETARY FOREIGN CURRENCY POSITION
(Thousands of Mexican Pesos)
 
     
CONSOLIDATED

  DOLLARS
OTHER CURRENCIES
TOTAL
FOREING CURRENCY POSITION THOUSANDS
OF DOLLARS		 THOUSANDS
OF PESOS		 THOUSANDS
OF DOLLARS		 THOUSANDS
OF PESOS		 THOUSANDS
OF PESOS
            
            
TOTAL ASSETS 450,873 5,395,961 660 7,895 5,403,856
            
LIABILITIES POSITION 247,015 2,957,833 0 0 2,957,833
SHORT TERM LIABILITIES POSITION 242,887 2,906,823 0 0 2,906,823
LONG TERM LIABILITIES POSITION 4,128 51,010 0 0 51,010
            
NET BALANCE 203,858 2,438,128 660 7,895 2,446,023

NOTES
THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT MARCH 31, 2011 WAS PS. 11.9678


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.        
DEBT INSTRUMENTS
 
       
CONSOLIDATED

FINANCIAL LIMITED BASED IN ISSUED DEED AND/OR TITLE

MEDIUM TERM NOTES

      A)  Current assets to current liabilities must be 1.0 times or more.
B)  Total liabilities to total assets do not be more than 0.60.
C) Operating income plus items added to income which do not require using cash must be 2.0 times or more.
   
This notes was offered in the international market.

ACTUAL SITUATION OF FINANCIAL LIMITED

     MEDIUM TERM NOTES
A) Accomplished the actual situation is 3.45 times.
B) Accomplished the actual situation is 0.33
C) Accomplished the actual situation is 448.1
 
As of March 31, 2011, the remaining balance of the MTNs not exchanged amounts to Ps. 3,614 ($302,000 dollars).
 
C.P. Adolfo Luna Luna
Chief Financial Officer

BONDS AND/OR MEDIUM TERM NOTES CERTIFICATE


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
 
     
CONSOLIDATED

PLANT OR CENTER ECONOMIC ACTIVITY PLANT
CAPACITY		 UTILIZATION (%)
GUADALAJARA MINI MILL PRODUCTION AND SALES OF STEEL
PRODUCTS
480
56.09
MEXICALI MINI MILL PRODUCTION AND SALES OF STEEL
PRODUCTS
250
74.38
APIZACO AND CHOLULA PLANTS PRODUCTION AND SALES OF STEEL
PRODUCTS
460
76.41
CANTON CASTER FACILITY PRODUCTION OF BILLET 1,380 72.94
LORAIN CASTER FACILITY PRODUCTION OF BILLET 1,150 0.00
LORAIN HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL
PRODUCTS
840
58.74
LACKAWANNA HOT-ROLLING MILL PRODUCTION AND SALES OF STEEL
PRODUCTS
600
70.48
MASSILLON COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL
PRODUCTS
125
61.14
GARY COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL
PRODUCTS
70
47.00
ONTARIO COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL
PRODUCTS
60
55.00
SAN LUIS POTOSI COLD-FINISH FACILITY PRODUCTION AND SALES OF STEEL
PRODUCTS
600
78.22


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.        
MAIN RAW MATERIALS
       
CONSOLIDATED

DOMESTIC
MAIN SUPPLIERS
FOREIGN
MAIN SUPPLIERS
DOMESTIC
SUBSTITUTION
COST
PRODUCTION (%)
PLANTS IN USA   SCRAP VARIOUS NO 37.52
SCRAP VARIOUS PLANTS IN MEXICO     54.80
FERROALLOYS VARIOUS PLANTS IN MEXICO   YES 6.72
PLANTS IN USA   FERROALLOYS VARIOUS NO 12.18
ELECTRODES VARIOUS PLANTS IN MEXICO VARIOUS YES 2.35
PLANTS IN USA   ELECTRODES VARIOUS NO 2.65


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
SELLS DISTRIBUTION BY PRODUCT
     
CONSOLIDATED
 
 
DOMESTIC SALES

MAIN PRODUCTS NET SALES
  		MAIN DESTINATION
 
VOLUME
AMOUNT
TRADEMARKS
CUSTOMERS
COMMERCIAL PROFILES 234 2,337,069    
SPECIAL PROFILES 93 1,018,082    
OTHERS   24,829    
         
T O T A L   3,379,980    
         
FOREIGN SALES 211 3,185,471    
TOTAL   6,565,451    


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
SELLS DISTRIBUTION BY PRODUCT
     
CONSOLIDATED
 
 
FOREIGN SALES

MAIN PRODUCTS
 
NET SELLS
MAIN
 
VOLUME
AMOUNT
TRADEMARKS
CUSTOMERS
EXPORTS        
COMMERCIAL PROFILES 40 436,486    
SPECIAL PROFILES 3 31,709    
OTHERS 0 24,661    
 
FOREIGN SUBSIDIARIES		        
SPECIAL PROFILES 211 3,185,470    
           
T O T A L   3,678,326    


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE: SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.        
CONSTRUCTION IN PROGRESS
 
 
       
CONSOLIDATED

THE PROJECTS IN PROGRESS AT MARCH 31, 2011, ARE:

PROJECTS IN PROGRESS
 TOTAL INVESTMENT  
 
PROJECTS IN REPUBLIC 78,306  
PROJECTS IN MEXICALI 6,700  
PROJECTS IN TLAXCALA 322,659  
PROJECTS IN GUADALAJARA 15,055  
PROJECTS IN SAN LUIS POTOSI 4,032  
 
TOTAL INVESTMENT AT
MARCH 31, 2011
426,752
  
 
 
 


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.          

TRANSACTIONS IN FOREIGN CURRENCY AND CONVERSION OF FINANCIAL STATEMENTS OF FOREIGN OPERATIONS
INFORMATION RELATED TO BULLETIN B-15

CONSOLIDATED

Foreign currency transactions and exchange differences – Transactions in foreign currencies are recorded at the exchange rates prevailing at the celebration and liquidation dates. The assets and liabilities in foreign currencies are translated at the exchange rates prevailing at the date of the consolidated balance sheet. The exchange gains or losses incurred in connection with those assets or liabilities are included in the Statement of income, as part of the comprehensive financing cost. Note 3 presents the consolidated position in foreign currencies at the end of each year and the exchange rates used in the translation.

The functional and reporting currency of the Company is the Mexican peso. The financial statements of foreign subsidiaries were translated to Mexican pesos in accordance with the New Mexican Financial Reporting Standard MFRS B-15 "Conversion of foreign currencies” that came into effect on January 1, 2008. Under this Standard, the first step to convert financial information from operations abroad is the determination of the functional currency. The functional currency is the currency of the primary economic environment of the foreign operation or, if different, the currency that mainly impacts its cash flows. The new rule incorporates the concepts of recording currency that is the currency in which the entity maintains its accounting records, whether for legal or information purposes and the reporting currency, which is the currency chosen by the Company to report its financial information.

The U.S. dollar was considered as the functional currency of the subsidiary SimRep, therefore the financial statements of this subsidiary were translated into Mexican pesos by applying: i) the exchange rates at the balance sheet date to all assets and liabilities and (ii) the historical exchange rate at stockholders’ equity accounts and revenues, costs and expenses. The difference resulting from the translation or consolidation processes or from applying the equity method, is recognized as a cumulative translation adjustment as part of Translation effect in foreign subsidiaries in Stockholders’ equity.

The Mexican Peso was considered the functional currency of the subsidiary Pacific Steel and the U.S. dollar as its recording currency; therefore the financial statements were translated to Mexican pesos as follows: i) monetary assets and liabilities by applying the exchange rates at the balance sheet date; ii) non-monetary assets and liabilities, as well as stockholders’ equity accounts, at the historical exchange rate; and iii) revenues, costs and expenses at the historical exchange rate. Translation differences were carried directly to the income statement under the caption Foreign exchange loss, net.


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.      
     
CONSOLIDATED
INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES

SERIES NOMINAL
VALUE		 VALID
COUPON
NUMBER OF SHARES
CAPITAL STOCK
(Thousands of Pesos)
      FIXED
PORTION		 VARIABLE
PORTION		 MEXICAN FREE
SUBSCRIPTION		 FIXED VARIABLE
B    
90,850,050
406,859,164
 0
497,709,214
441,786
1,978,444
TOTAL    
90,850,050
406,859,164
0
497,709,214
441,786
1,978,444

TOTAL NUMBER OF SHARES REPRESENTING THE PAID-IN CAPITAL STOCK ON THE DATE OF SENDING THE INFORMATION:     497,709,214


MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:
SIMEC QUARTER: 1 YEAR: 2011
GRUPO SIMEC, S.A.B. DE C.V.        
       
CONSOLIDATED

DECLARATION OF THE COMPANY OFFICIALS RESPONSIBLE FOR THE INFORMATION CONTAINED IN THIS REPORT.

LUIS GARCIA LIMON AND ADOLFO LUNA LUNA 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 FIRST QUARTER REPORT.

ING LUIS GARCIA LIMON C.P. ADOLFO LUNA LUNA
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
 
 
 
GUADALAJARA, JAL, AT MAY 03 OF 2011.