6-K 1 e20871_6k.htm FORM 6-K

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, 2005.

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 9, 2005.	By:	/s/ Luis García Limón
	Name:	Luis García Limón
	Title:	Chief Executive Officer

PRESS RELEASE	Contact:	Adolfo Luna Luna José 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, 2004

GUADALAJARA, MEXICO, May 4, 2005- Grupo Simec, S.A. de C.V. (AMEX-SIM) (“Simec”) announced today its final audited results of operations for the year ended December 31, 2004. Net sales increased 94% to Ps. 5,683 million in 2004 (including the net sales recorded since August 1, 2004 generated by the newly acquired plants in Apizaco and Cholula of Ps. 1,193 million), compared to Ps. 2,930 million in 2003, primarily due to higher finished product prices and also resulting from higher production levels. Primarily as a result of the foregoing, Simec recorded net income of Ps. 1,406 million in 2004 versus net income of Ps. 308 million in 2003.

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 Industrías Ferricas del Norte, S.A. (Corporación 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 Industrias CH, S.A. de C.V. (“ICH”) of U.S. $19 million for capital stock to be issued in the second quarter of 2005. Simec began to operate the plants in Apizaco, Tlaxcala and Cholula, Puebla 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 773,297 metric tons of basic steel products during 2004 (including 155,614 tons produced by the newly acquired plants in Apizaco and Cholula), an increase of 23% as compared to 628,243 metric tons in 2003. Exports of basic steel products were 97,126 metric tons in 2004 (including 12,394 tons produced by the newly acquired plants in Apizaco and Cholula) versus 80,744 metric tons in 2003. Additionally Simec sold 41,832 tons of billet in 2004 as compared to 63,616 tons of billet in 2003. Prices of finished products sold in 2004 increased 63% in real terms versus 2003.

Simec’s direct cost of sales was Ps. 3,303 million in 2004 (including Ps. 834 million relating to the newly acquired plants in Apizaco and Cholula), or 58% of net sales, versus Ps. 1,925 million, or 66% of net sales, for 2003. The average cost of raw materials used to produce steel products increased 45% in real terms in 2004 versus 2003, primarily as a result of significant increases in the price of scrap and certain other raw materials. Indirect manufacturing, selling, general and administrative expenses (including depreciation) were Ps. 571 million during 2004 (including Ps. 73 million relating to the newly acquired plants in Apizaco and Cholula), compared to Ps. 488 million in 2003.

Simec’s operating income increased 250% to Ps. 1,809 million during 2004 (including Ps. 286 million relating to the newly acquired plants in Apizaco and Cholula) from Ps. 517 million in 2003. Operating income was 32% of net sales in 2004 compared to 18% of net sales in 2003.

Simec recorded other expense, net, of Ps. 37 million in 2004 compared to other expense, net, of Ps. 31 million in 2003. In addition, Simec recorded a provision for income tax and employee profit sharing of Ps. 330 million in 2004 versus a provision of Ps. 152 million in 2003.

Simec recorded financial expense of Ps. 36 million in 2004 compared to financial expense of Ps. 26 million in 2003 as a result of (i) net interest income of Ps. 6 million in 2004 compared to net interest expense of Ps. 13 million in 2003, (ii) an exchange gain of Ps. 4 million in 2004 compared to an exchange loss of Ps. 3 million in 2003, reflecting lower debt levels during 2004 and a decrease of 0.3% in the value of the peso versus the dollar in 2004 compared to a decrease of 9% in the value of the peso versus the dollar in 2003 and (iii) a loss from monetary position of Ps. 46 million in 2004 compared to a loss from monetary position of Ps. 10 million in 2003, reflecting the domestic inflation rate of 5.2% in 2004 compared to the domestic inflation rate of 4% in 2003 and lower debt levels during the 2004 period.

At December 31, 2004, Simec’s total consolidated debt consisted of approximately $13.9 million of U.S. dollar denominated debt, including indebtedness in respect of a letter of credit of $13.6 million. At December 31, 2003, Simec had outstanding approximately $2 million of U.S. dollar-denominated debt. In March 2004, Simec prepaid the remainder of its outstanding bank debt. At December 31, 2004 Simec owed no debt to ICH.

All figures were prepared in accordance with Mexican generally accepted accounting principles and are stated in constant Pesos at December 31, 2004.

Simec is a mini-mill steel producer in Mexico and manufactures a broad range of non-flat structural steel products.

###

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED FINANCIAL STATEMENT
AT DECEMBER 31 OF 2004 AND 2003 (thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
S				AMOUNT		%		AMOUNT		%
1		TOTAL ASSETS		8,947,596		100		6,316,897		100
2		CURRENT ASSETS		2,801,907		31		1,325,343		21
3		CASH AND SHORT-TERM INVESTMENTS		506,475		6		542,940		9
4		ACCOUNTS AND DOCUMENTS RECEIVABLE (NET)		963,201		11		453,699		7
5		OTHER ACCOUNTS AND DOCUMENTS RECEIVABLE		193,778		2		20,055		0
6		INVENTORIES		1,129,862		13		303,885		5
7		OTHER CURRENT ASSETS		8,591		0		4,764		0
8		LONG-TERM		0		0		10,835		0
9		ACCOUNTS AND DOCUMENTS RECEIVABLE (NET)		0		0		10,835		0
10		INVESTMENT IN SHARES OF SUBSIDIARIES AND NON-CONSOLIDATED		0		0		0		0
11		OTHER INVESTMENTS		0		0		0		0
12		PROPERTY, PLANT AND EQUIPMENT		5,842,382		65		4,709,665		75
13		PROPERTY		2,179,647		24		2,017,328		32
14		MACHINERY AND INDUSTRIAL		5,924,279		66		4,750,394		75
15		OTHER EQUIPMENT		151,170		2		142,523		2
16		ACCUMULATED DEPRECIATION		2,423,854		27		2,201,129		35
17		CONSTRUCTION IN PROGRESS		11,140		0		549		0
18		DEFERRED ASSETS (NET)		303,307		3		271,055		4
19		OTHER ASSETS		0		0		0		0
20		TOTAL LIABILITIES		2,363,766		100		1,450,344		100
21		CURRENT LIABILITIES		909,352		38		341,351		24
22		SUPPLIERS		588,884		25		217,696		15
23		BANK LOANS		153,124		6		20,069		1
24		STOCK MARKET LOANS		3,402		0		3,569		0
25		TAXES TO BE PAID		38,628		2		40,993		3
26		OTHER CURRENT LIABILITIES		125,314		5		59,024		4
27		LONG-TERM LIABILITIES		0		0		0		0
28		BANK LOANS		0		0		0		0
29		STOCK MARKET LOANS		0		0		0		0
30		OTHER LOANS		0		0		0		0
31		DEFERRED LOANS		1,454,414		62		1,108,993		76
32		OTHER LIABILITIES		0		0		0		0
33		CONSOLIDATED STOCKHOLDERS’ EQUITY		6,583,830		100		4,866,553		100
34		MINORITY INTEREST		310		0		264		0
35		MAJORITY INTEREST		6,583,520		100		4,866,289		100
36		CONTRIBUTED CAPITAL		4,154,610		63		3,909,419		80
37		PAID-IN CAPITAL STOCK (NOMINAL)		1,948,155		30		1,925,252		40
38		RESTATEMENT OF PAID-IN CAPITAL STOCK		1,329,185		20		1,328,345		27
39		PREMIUM ON SALES OF SHARES		655,822		10		655,822		13
40		CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES		221,448		3		0		0
41		CAPITAL INCREASE (DECREASE)		2,428,910		37		956,870		20
42		RETAINES EARNINGS AND CAPITAL RESERVE		1,624,504		25		1,316,315		27
43		REPURCHASE FUND OF SHARES		84,226		1		84,226		2
44		EXCESS (SHORTFALL) IN RESTATEMENT OF STOCKHOLDERS EQUITY		(686,212	)	(10	)	(751,860	)	(15	)
45		NET INCOME FOR THE YEAR		1,406,392		21		308,189		6

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED FINANCIAL STATEMENT
BREAKDOWN OF MAIN CATEGORIES
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
S				AMOUNT		%		AMOUNT		%
3		CASH AND SHORT-TERM INVESTMENTS		506,475		100		542,940		100
46		CASH		171,476		34		173,304		32
47		SHORT-TERM INVESTMENTS		334,999		66		369,636		68
18		DEFERRED ASSETS (NET)		303,307		100		271,054		100
48		AMORTIZED OR REDEEMED EXPENSES		230,089		76		271,054		100
49		GOODWILL		0		0		0		0
50		DEFERRED TAXES		0		0		0		0
51		OTHERS		73,218		24		0		0
21		CURRENT LIABILITIES		909,352		100		341,351		100
52		FOREIGN CURRENCY LIABILITIES		373,025		41		88,549		26
53		MEXICAN PESOS LIABILITIES		536,327		59		252,802		74
24		STOCK MARKET LOANS		3,402		100		3,569		100
54		COMMERCIAL PAPER		0		0		0		0
55		CURRENT MATURITIES OF MEDIUM TERM NOTES		3,402		100		3,569		100
56		CURRENT MATURITIES OF BONDS		0		0		0		0
26		OTHER CURRENT LIABILITIES		125,314		100		59,024		100
57		OTHER CURRENT LIABILITIES WITH COST		0		0		0		0
58		OTHER CURRENT LIABILITIES WITHOUT COST		125,314		100		59,024		100
27		LONG-TERM LIABILITIES		0		0		0		0
59		FOREIGN CURRENCY LIABILITIES		0		0		0		0
60		MEXICAN PESOS LIABILITIES		0		0		0		0
29		STOCK MARKET LOANS		0		0		0		0
61		BONDS		0		0		0		0
62		MEDIUM TERM NOTES		0		0		0		0
30		OTHER LOANS		0		0		0		0
63		OTHER LOANS WITH COST		0		0		0		0
64		OTHER LOANS WITHOUT COST		0		0		0		0
31		DEFERRED LOANS		1,454,414		100		1,108,993		100
65		NEGATIVE GOODWILL		0		0		0		0
66		DEFERRED TAXES		1,433,194		99		1,099,539		99
67		OTHERS		21,220		1		9,454		1
32		OTHER LIABILITIES		0		0		0		0
68		RESERVES		0		0		0		0
69		OTHER LIABILITIES		0		0		0		0
44		EXCESS (SHORTFALL) IN RESTATEMENT OF STOCKHOLDERS’ EQUITY		(686,212	)	(100	)	(751,860	)	(100	)
70		ACCUMULATED INCOME DUE TO MONETARY POSITION		(686,212	)	(100	)	(751,860	)	(100	)
71		INCOME FROM NON-MONETARY POSITION ASSETS		0		0		0		0

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED FINANCIAL STATEMENT
OTHER CONCEPTS
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
S				AMOUNT		AMOUNT
72		WORKING CAPITAL		1,892,555		983,992
73		PENSIONS FUND AND SENIORITY PREMIUMS		0		0
74		EXECUTIVES (*)		22		25
75		EMPLOYERS (*)		802		374
76		WORKERS (*)		1,194		889
77		COMMON SHARES (*)		133,542,984		131,973,022
78		REPURCHASED SHARES (*)		0		0

(*) THESE ITEMS SHOULD BE EXPRESSED IN UNITS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED EARNING STATEMENT
FROM JANUARY 1 TO DECEMBER 31 OF 2004 AND 2003
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
R				AMOUNT		%		AMOUNT		%
1		NET SALES		5,682,952		100		2,930,138		100
2		COST OF SALES		3,302,887		58		1,924,957		66
3		GROSS INCOME		2,380,065		42		1,005,181		34
4		OPERATING EXPENSES		570,449		10		487,754		17
5		OPERATING INCOME		1,809,616		32		517,427		18
6		TOTAL FINANCING COST		36,185		1		25,679		1
7		INCOME AFTER FINANCING COST		1,773,431		31		491,748		17
8		OTHER FINANCIAL OPERATIONS		36,658		1		31,158		1
9		INCOME BEFORE TAXES AND WORKERS’ PROFIT SHARING		1,736,773		31		460,590		16
10		RESERVE FOR TAXES AND WORKERS’ PROFIT SHARING		330,381		6		152,400		5
11		NET INCOME AFTER TAXES AND WORKERS’ PROFIT SHARING		1,406,392		25		308,190		11
12		SHARE IN NET INCOME OF SUBSIDIARIES AND NON-CONSOLIDATED ASSOCIATES		0		0		0		0
13		CONSOLIDATED NET INCOME FROM CONTINUOS OPERATIONS		1,406,392		25		308,190		11
14		INCOME FROM DISCONTINUOUS OPERATIONS		0		0		0		0
15		CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS		1,406,392		25		308,190		11
16		EXTRAORDINARY ITEMS NET EXPENSES (INCOME)		0		0		0		0
17		NET EFFECT AT THE BEGINNING OF THE YEAR BY CHANGES IN ACCOUNTING PRINCIPLES		0		0		0		0
18		NET CONSOLIDATED INCOME		1,406,392		25		308,190		11
19		NET INCOME OF MINORITY INTEREST		0		0		1		0
20		NET INCOME OF MAJORITY INTEREST		1,406,392		25		308,189		11

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED EARNING STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
R				AMOUNT		%		AMOUNT		%
1		NET SALES		5,682,952		100		2,930,138		100
21		DOMESTIC		5,076,148		89		2,594,400		89
22		FOREIGN		606,804		11		335,738		11
23		TRANSLATED INTO DOLLARS (***)		52,468		0		28,810		0
6		TOTAL FINANCING COST		36,185		100		25,679		100
24		INTEREST PAID		16,237		45		18,672		73
25		EXCHANGE LOSSES		0		0		2,676		10
26		INTEREST EARNED		21,806		60		5,692		22
27		EXCHANGE PROFITS		3,833		11		0		0
28		(GAIN) LOSS FROM MONETARY POSITION		45,587		126		10,023		39
8		OTHER FINANCIAL OPERATIONS		36,658		100		31,158		100
29		OTHER NET EXPENSES (INCOME) NET		36,658		100		31,158		100
30		(PROFIT) LOSS ON SALE OF OWN SHARES		0		0		0		0
31		(PROFIT) LOSS ON SALE OF SHORT-TERM INVESTMENTS		0		0		0		0
10		RESERVE FOR TAXES AND WORKERS’ PROFIT SHARING		330,381		100		152,400		100
32		INCOME TAX		22,246		7		28,151		18
33		DEFERRED INCOME TAX		308,135		93		119,151		78
34		WORKERS’ PROFIT SHARING		0		0		5,098		3
35		DEFERRED WORKERS’ PROFIT SHARING		0		0		0		0

(***) THOUSANDS OF DOLLARS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED EARNING STATEMENT
OTHER CONCEPTS
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
R				AMOUNT		AMOUNT
36		TOTAL SALES		6,010,077		3,141,101
37		NET FISCAL INCOME OF THE YEAR		0		0
38		NET SALES (**)		5,682,952		2,930,138
39		OPERATION INCOME (**)		1,809,616		517,427
40		NET INCOME OF MAJORITY INTEREST (**)		1,406,392		308,189
41		NET CONSOLIDATED INCOME (**)		1,406,392		308,190

(**) THE RESTATED INFORMATION FOR THE LAST TWELVE MONTHS SHOULD BE USED

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED EARNING STATEMENTOF THE SECOND QUARTER
FROM OCTOBER 1 TO DECEMBER 31 OF 2004 AND 2003
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
R				AMOUNT		%		AMOUNT		%
1		NET SALES		1,733,068		100		795,063		100
2		COST OF SALES		1,053,246		61		526,906		66
3		GROSS INCOME		679,822		39		268,157		34
4		OPERATING EXPENSES		157,347		9		116,606		15
5		OPERATING INCOME		522,475		30		151,551		19
6		TOTAL FINANCING COST		20,133		1		(118	)	0
7		INCOME AFTER FINANCING COST		502,342		29		151,669		19
8		OTHER FINANCIAL OPERATIONS		53,291		3		31,455		4
9		INCOME BEFORE TAXES AND WORKERS’ PROFIT SHARING		449,051		26		120,214		15
10		RESERVE FOR TAXES AND WORKERS’ PROFIT SHARING		103,395		6		112,431		14
11		NET INCOME AFTER TAXES AND WORKERS’ PROFIT SHARING		345,656		20		7,783		1
12		SHARE IN NET INCOME OF SUBSIDIARIES AND NON-CONSOLIDATED ASSOCIATES		0		0		0		0
13		CONSOLIDATED NET INCOME FROM CONTINUOS OPERATIONS		345,656		20		7,783		1
14		INCOME FROM DISCONTINUOUS OPERATIONS		0		0		0		0
15		CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS		345,656		20		7,783		1
16		EXTRAORDINARY ITEMS NET EXPENSES (INCOME)		0		0		0		0
17		NET EFFECT AT THE BEGINNING OF THE YEAR BY CHANGES IN ACCOUNTING PRINCIPLES		0		0		0		0
18		NET CONSOLIDATED INCOME		345,656		20		7,783		1
19		NET INCOME OF MINORITY INTEREST		0		0		1		0
20		NET INCOME OF MAJORITY INTEREST		345,656		20		7,782		1

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED EARNING STATEMENT OF THE SECOND QUARTER
BREAKDOWN OF MAIN CONCEPTS
FROM OCTOBER 1 TO DECEMBER 31 OF 2004 AND 2003
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR				QUARTER OF PREVIOUS FINANCIAL YEAR
R				AMOUNT		%		AMOUNT		%
1		NET SALES		1,733,068		100		795,063		100
21		DOMESTIC		1,576,201		91		676,961		85
22		FOREIGN		156,867		9		118,102		15
23		TRANSLATED INTO DOLLARS (***)		13,863		0		9,971		0
6		TOTAL FINANCING COST		20,133		100		(118	)	100
24		INTEREST PAID		1,082		5		506		429
25		EXCHANGE LOSSES		7,907		39		0		0
26		INTEREST EARNED		3,150		16		2,872		2,434
27		EXCHANGE PROFITS		0		0		7,051		5,975
28		(GAIN) LOSS FROM MONETARY POSITION		14,294		71		9,299		7,881
8		OTHER FINANCIAL OPERATIONS		53,291		100		31,455		100
29		OTHER NET EXPENSES (INCOME) NET		53,291		100		31,455		100
30		(PROFIT) LOSS ON SALE OF OWN SHARES		0		0		0		0
31		(PROFIT) LOSS ON SALE OF SHORT-TERM INVESTMENTS		0		0		0		0
10		RESERVE FOR TAXES AND WORKERS’ PROFIT SHARING		103,395		100		112,431		100
32		INCOME TAX		(633	)	(1	)	2,921		3
33		DEFERRED INCOME TAX		104,028		101		105,567		94
34		WORKERS’ PROFIT SHARING		0		0		3,943		3
35		DEFERRED WORKERS’ PROFIT SHARING		0		0		0		0

(***) THOUSANDS OF DOLLARS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FROM JANUARY 1 TO DECEMBER 31 OF 2004 AND 2003
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
C				AMOUNT		AMOUNT
1		CONSOLIDATED NET INCOME		1,406,392		308,190
2		+ (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH		537,435		345,044
3		CASH FLOW FROM NET INCOME OF THE YEAR		1,943,827		653,234
4		CASH FLOW FROM CHANGE IN WORKING CAPITAL		(1,063,786	)	(228,623	)
5		CASH GENERATED (USED) IN OPERATING ACTIVITIES		880,041		424,611
6		CASH FLOW FROM EXTERNAL FINANCING		143,368		(352,793	)
7		CASH FLOW FROM INTERNAL FINANCING		245,191		377,255
8		CASH FLOW GENERATED (USED) BY FINANCING		388,559		24,462
9		CASH FLOW GENERATED (USED) IN INVESTMENT ACTIVITIES		(1,305,065	)	(25,404	)
10		NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS		(36,465	)	423,669
11		CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNING OF PERIOD		542,940		119,271
12		CASH AND SHORT TERM INVESTMENTS AT THE END OF PERIOD		506,475		542,940

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
BREAKDOWN OF MAIN CONCEPTS
(thousands of pesos)

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
C				AMOUNT		AMOUNT
2		+ (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE CASH		537,435		345,044
13		DEPRECIATION AND AMORTIZATION FOR THE YEAR		213,858		191,635
14		+ (-) NET INCREASE (DECREASE) IN PENSIONS FUND AND SENIORITY PREMIUMS		1,286		260
15		+ (-) NET LOSS (PROFIT) IN MONEY EXCHANGE				0
16		+ (-) NET LOSS (PROFIT) IN ASSETS AND LIABILITIES ACTUALIZATION		0		0
17		+ (-) OTHER ITEMS		0		0
40		+ (-) OTHER ITEMS WHICH DO NOT AFFECT EBITDA		322,291		153,149
4		CASH FLOW CHANGE IN WORKING CAPITAL		(1,063,786	)	(228,623	)
18		+ (-) DECREASE (INCREASE) IN ACCOUNT RECEIVABLES		(509,502	)	(21,135	)
19		+ (-) DECREASE (INCREASE) IN INVENTORIES		(825,977	)	(9,529	)
20		+ (-) DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLES		(163,466	)	40,427
21		+ (-) DECREASE (INCREASE) IN SUPPLIER ACCOUNT		371,188		(10,166	)
22		+ (-) DECREASE (INCREASE) IN OTHER LIABILITIES		63,971		(228,220	)
6		CASH FLOW FROM EXTERNAL FINANCING		143,368		(352,793	)
23		+ SHORT-TERM BANK AND STOCK MARKET FINANCING		151,958		1,661
24		+ LONG-TERM BANK AND STOCK MARKET FINANCING		0		0
25		+ DIVIDEND RECEIVED		0		0
26		OTHER FINANCING		10,480		78
27		BANK FINANCING AMORTIZATION		(19,070	)	(354,532	)
28		(-) STOCK MARKET AMORTIZATION		0		0
29		(-) OTHER FINANCING AMORTIZATION		0		0
7		CASH FLOW FROM INTERNAL FINANCING		245,191		377,255
30		+ (-) INCREASE (DECREASE) IN CAPITAL STOCK		23,743		377,255
31		(-) DIVIDENDS PAID		0		0
32		+ PREMIUM ON SALE OF SHARES		0		0
33		+ CONTRIBUTION FOR FUTURE CAPITAL INCREASES		221,448		0
9		CASH FLOW GENERATED (UTILIZED) IN INVESTMENT ACTIVITIES		(1,305,065	)	(25,404	)
34		+ (-) INCREASE 8DECREASE) IN STOCK INVESTMENTS OF A PERMANENT NATURE		0		0
35		(-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT		(1,235,529	)	(61,895	)
36		(-) INCREASE IN CONSTRUCTION PROGRESS		0		0
37		+ SALE OF OTHER PERMANET INVESTMENTS		0		0
38		+ SALE OF TANGIBLE FIXED ASSETS		0		0
39		+ (-) OTHER ITEMS		(69,536	)	36,491

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

RATIOS
CONSOLIDATED

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
P
		YIELD
1		NET INCOME TO NET SALES		24.75	%	10.52	%
2		NET INCOME TO STOCKHOLDERS’ EQUITY (**)		21.36	%	6.33	%
3		NET INCOME TO TOTAL ASSETS (**)		15.72	%	4.88	%
4		CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME		0.00	%	0.00	%
5		INCOME DUE TO MONETARY POSITION TO NET INCOME		(3.24)	%	(3.25)	%
		ACTIVITY
6		NET SALES TO NET ASSETS (**)		0.64 times		0.46 times
7		NET SALES TO FIXED ASSETS (**)		0.97 times		0.62 times
8		INVENTORIES ROTATION (**)		2.92 times		6.33 times
9		ACCOUNTS RECEIVABLE IN DAYS OF SALES		53 days		49 days
10		PAID INTEREST TO TOTAL LIABILITIES WITH COST (**)		10.37	%	78.99	%
		LEVERAGE
11		TOTAL LIABILITIES TO TOTAL ASSETS		26.42	%	22.96	%
12		TOTAL LIABILITIES TO STOCKHOLDERS’ EQUITY		0.36 times		0.30 times
13		FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES		15.78	%	6.11	%
14		LONG-TERM LIABILITIES TO FIXED ASSETS		0.00	%	0.00	%
15		OPERATING INCOME TO INTEREST PAID		111.45		27.71 times
16		NET SALES TO TOTAL LIABILITIES (**)		2.40 times		2.02 times
		LIQUIDITY
17		CURRENT ASSETS TO CURRENT LIABILITIES		3.08 times		3.88 times
18		CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES		1.84 times		2.99 times
19		CURRENT ASSETS TO TOTAL LIABILITIES		1.19 times		0.91 times
20		AVAILABLE ASSETS TO CURRENT LIABILITIES		55.70	%	159.06	%
		CASH FLOW
21		CASH FLOW FROM NET INCOME TO NET SALES		34.20	%	22.29	%
22		CASH FLOW FROM CHANGES IN WORKING CAPITAL TO NET SALES		(18.72)	%	(7.80	)%
23		CASH GENERATED (USED) IN OPERATING TO INTEREST PAID		54.20 times		22.74 times
24		EXTERNAL FINANCING TO CASH GENERATED (USED) IN FINANCING		36.90	%	(1,442.21	)%
25		INTERNAL FINANCING TO CASH GENERATED (USED) IN FINANCING		63.10	%	1,542.21	%
26		ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT TO CASH GENERATED (USED) IN INVESTMENT ACTIVITIES		94.67	%	243.64	%

(**) IN THESE RATIOS PROVIDE INFORMATION FOR THE LAST TWELVE MONTHS

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

DATE PER SHARE
CONSOLIDATED

JUDGED INFORMATION

REF		CATEGORIES		QUARTER OF PRESENT FINANCIAL YEAR		QUARTER OF PREVIOUS FINANCIAL YEAR
D
1		BASIC PROFIT PER ORDINARY SHARE (**)		$10.58		$2.59
2		BASIC PROFIT PER PREFERENCE SHARE (**)		$0.00		$0.00
3		DILUTED PROFIT PER ORDINARY SHARE (**)		$0.00		$0.00
4		CONTINUOUS OPERATING PROFIT PER COMMON SHARE (**)		$10.58		$2.59
5		EFFECT OF DISCONTINUED OPERATIONS ON CONTINUOUS OPERATING PROFIT PER SHARE (**)		$0.00		$0.00
6		EFFECT OF EXTRAORDINARY PROFIT AND LOSS ON CONTINUOUS OPERATING PROFIT PER SHARE (**)		$0.00		$0.00
7		EFFECT BY CHANGES IN ACCOUNTING POLICIES ON CONTINUOUS OPERATING PROFIT PER SHARE (**)		$0.00		$0.00
8		CARRYING VALUE PER SHARE		$49.30		$36.87
9		CASHH DIVIDEND ACCUMULATED PER SHARE		$0.00		$0.00
10		DIVIDEND IN SHARES PER SHARE		0.00 shares		0.00 shares
11		MARKET PRICE TO CARRYING VALUE		1.83 times		1.07 times
12		MARKET PRICE TO BASIC PROFIT PER COMMON SHARE (**)		8.51 times		15.23 times
13		MARKET PRICE TO BASIC PROFIT PER PREFERENCE 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
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

FINANCIAL STATEMENT NOTES

CONSOLIDATED

JUDGED INFORMATION

s35.- Stockholders’ Equity:
Effects of inflation - The effects of inflation on stockholders’ equity at December 31, 2004 are as follows:

		Historical Cost			Restated Amount			Total
Capital stock		Ps. 1,948,155			Ps. 1,329,185			Ps. 3,277,340
Additional paid-in capital		549,517			106,305			655,822
Contributions for future Capital increases		216,699			4,749			221,448
Retained earnings		2,557,949			557,173			3,115,122
Excess resulting from restating
Stockholders’ equity to reflect
Certain effects of inflation		—			184,763			184,763
Effect deferred income tax
Bulletin D-4		(662,340	)		(208,635	)		(870,975	)

s39.- Premium in subscription of Capital Stock made in March 29, 2001.

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 resulting from the adoption of this Bulletin was Ps. 1,433,194 at December 31, 2004 compared to Ps. 1,099,539 at December 31, 2003. The effect on Simec’s consolidated statement of income in 2004 was an increase of Ps. 308,135 in the provision for income tax and employee profit sharing compared to an increase of Ps. 119,151 in 2003. These provisions do not affect the cash flow of Simec.

r24.- Simec doesn’t have interest paid in UDI’s

r26.- Simec doesn’t have 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, 2004			December 31, 2003
Net loss (profit) in money exchange			Ps.   (325	)		Ps.   5,814
Net loss (profit) in liabilities actualization			(1,166	)		(14,413	)

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

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, 2004, Simec’s total consolidated debt consisted of approximately $13.9 million of U.S. dollar denominated debt, including indebtedness in respect of a letter of credit of $13.6 million and $0.3 million of MTN’s due 1998 (accrued interest at December 31, 2004 was $282,121) which were issued in 1993 as part of a $68 million issuance. At December 31, 2003, Simec had outstanding approximately $2 million of U.S. dollar-denominated debt. In March 2004, Simec prepaid $1.7 million of the remainder of its outstanding bank debt. At December 31, 2004 Simec owed no debt to its parent company, Industrias CH, S.A. de C.V. (“ICH”).

Simec’s bank debt repayment in March 2004 resulted in the payment in full of its outstanding bank debt. This payment permitted to Simec to cancel the industrial mortgage securing the bank debt and Simec is no longer required to comply with various affirmative and negative covenants.

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 Industrías Ferricas del Norte, S.A. (Corporación 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 to be issued in the second quarter of 2005. 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.

In December 2003 Simec acquired Administradora de Cartera de Occidente, S.A. de C.V. (“Acosa”) from ICH for nominal consideration. Acosa’s sole assets are a portfolio of defaulted receivables it acquired in June 2003 from various Mexican banks which are in the process of liquidation. The purchase price of the portfolio is payable by Acosa solely from recoveries if any, net of expenses of collection, with respect to the defaulted receivables; upon payment of the purchase price from recoveries on the portfolio, Acosa and the Mexican banks will share in any additional recoveries, net of expenses of collection, on a 50%/50% basis.

In November 2003, ICH converted into common shares of Simec the capital contribution to Simec made in May 2003, in the amount of $14.5 million (the proceeds of which were used to retire debt owed to ICH) for capital stock issued in the fourth quarter of 2003, at a conversion price equivalent to U.S $1.41 (Ps. 14.588) per American Depositary Share. In May 2004, certain minority shareholders of Simec exercised their pre-emptive rights arising as a result of this conversion by ICH to purchase capital stock for Ps. 23.7 million at the price per share of Ps. 14.588 (the equivalent of U.S. $1.25 per American Depositary Share).

Net resources provided by operations were Ps. 880 million in 2004 versus Ps. 425 million of net resources provided by operations in 2003 (which amount for 2003 reflects the conversion of loans into common shares of Simec for Ps. 194 million). Net resources provided by financing activities were Ps. 389 million in 2004 (which

amount reflects prepayment of bank debt and a capital contribution from ICH to Simec in the amount of Ps. 221 million ($19 million) for capital stock to be issued in the second quarter of 2005) versus Ps. 24 million of net resources provided by financing activities in 2003 (which amount reflects the prepayment of Ps. 355 million ($31.4 million) of bank debt, the conversion by ICH of Ps. 194 million of loans (plus accrued interest thereon) into common shares and a capital contribution from ICH to Simec in the amount of Ps. 163 million ($14.5 million) for capital stock issued in 2003). Net resources used in investing activities (to acquire property, plant and equipment and other non-current assets) were Ps. 1,305 million in 2004 (which amount reflects the acquisition of the Apizaco and Cholula facilities) versus net resources used in investing activities of Ps. 25 million in 2003.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Year Ended December 31, 2004 compared to Year Ended December 31, 2003

Net Sales

Net sales of Simec increased 94% to Ps. 5,683 million in 2004 (including the net sales generated since August 1, 2004 by the newly acquired plants in Apizaco and Cholula of Ps. 1,193 million), compared to Ps. 2,930 million in 2003. Sales in tons of basic steel products increased 23% to 773,297 tons in 2004 (including 155,614 tons produced by the newly acquired plants in Apizaco and Cholula) compared to 628,243 tons in 2003. Exports of basic steel products increased 20% to 97,126 tons in 2004 (including 12,394 tons produced by the newly acquired plants in Apizaco and Cholula) versus 80,744 tons in 2003. Additionally, Simec sold 41,832 tons of billet in 2004, compared to 63,616 tons of billet in 2003. The average price of steel products increased 63% in real terms in 2004 versus 2003.

Direct Cost of Sales

Simec’s direct cost of sales increased 72% to Ps. 3,303 million in 2004 (including Ps. 834 million relating to the newly acquired plants in Apizaco and Cholula) compared to Ps. 1,925 million in 2003. Direct cost of sales as a percentage of net sales was 58% in 2004 compared to 66% in 2003. The average cost of raw materials used to produce steel products increased 45% in real terms in 2004 versus 2003, primarily as a result of increases in the price of scrap and certain other raw materials.

Marginal Profit

Simec’s marginal profit increased 137% to Ps. 2,380 million in 2004 (including Ps. 359 million relating to the newly acquired plants in Apizaco and Cholula) compared to Ps. 1,005 million in 2003. As a percentage of net sales, marginal profit was 42% in 2004 compared to 34% in 2003.

Indirect Manufacturing, Selling, General And Administrative Expenses

Indirect manufacturing, selling, general, and administrative expenses (which include depreciation and amortization) increased 17% to Ps. 571 million in 2004 (including Ps. 73 million relating to the newly acquired plants in Apizaco and Cholula) from Ps. 488 million in 2003; Simec recorded an increase of Ps. 22 million in depreciation and amortization expense, which in 2004 was Ps. 214 million (including Ps. 25 million relating to the newly acquired plants in Apizaco and Cholula) compared to Ps. 192 million in 2003.

Operating Income

Simec’s operating income increased 250% to Ps. 1,809 million in 2004 (including Ps. 286 million relating to the newly acquired plants in Apizaco and Cholula) compared to Ps. 517 million in 2003. Operating income was 32% of net sales in 2004 and 18% of net sales in 2003.

Financial Income (Expense)

Simec recorded financial expense of Ps. 36 million in 2004 compared to financial expense of Ps. 26 million in 2003. Net interest income was Ps. 6 million in 2004 versus net interest expense of Ps. 13 million in 2003. Simec recorded an exchange gain of approximately Ps. 4 million in 2004 compared to an exchange loss of Ps. 3 million in 2003, reflecting a 0.3% decrease in the value of the peso versus the dollar in 2004 compared to a 9% decrease in the value of the peso versus the dollar in 2003 and lower debt levels in 2004. Simec recorded a loss from monetary position of Ps. 46 million in 2004 compared to a loss from monetary position of Ps. 10 million in 2003, reflecting the domestic inflation rate of 5.2% in 2004 as compared to 4% in 2003 and lower debt levels during 2004.

Other Income (Expense), Net

Simec recorded other expense, net, of Ps. 37 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 the 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 (iv) other expense related to financial operations of Ps. 22 million) compared to other expense, net, of Ps. 31 million in 2003 (reflecting (i) a reserve of Ps. 11 million relating to the clean-up of contaminated land at the Pacific Steel facilities, (ii) a reserve of Ps. 19 million relating to the realizable value of idle machinery and equipment and (iii) other expense related to other financial operations of Ps. 1 million).

Income Tax and Employee Profit Sharing

Simec recorded a provision of Ps. 330 million for income tax and employee profit sharing in 2004 (including a provision of Ps. 308 million from the application of Bulletin D-4 with respect to deferred income tax described below) compared to a provision of Ps. 152 million in 2003 (including a provision of Ps. 119 million from the application of Bulletin D-4 with respect to deferred income tax described below).

Net Income

As a result of the foregoing, Simec recorded net income of Ps. 1,406 million in 2004 compared to net income of Ps. 308 million in 2003.

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. 1,433 million at December 31, 2004 compared to Ps. 1,100 million at December 31, 2003. The effect on Simec’s consolidated statement of income in 2004 was an increase of Ps. 308 million in the provision for income tax and employee profit sharing compared to an increase in the provision of Ps. 119 million in 2003. These provisions do not affect the cash flow of Simec.

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

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, Compañía 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:

• Compañía Siderurgica de California, S.A. de C.V.

• Industrias del Acero y del Alambre, S.A. de C.V.

• Pacific Steel Inc.

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, 2004 are as follows:

		Years
Buildings		15 to 50
Machinery and equipment		10 to 40

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”. All foreign subsidiaries 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.

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, 2004 and 2003. 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.

(2) Financial Debt:

At December 31, 2004, Simec’s total consolidated debt consisted of approximately $13.9 million of U.S. dollar denominated debt, including indebtedness in respect of a letter of credit of $13.6 million and $0.3 million of MTN’s due 1998 (accrued interest at December 31, 2004 was $282,121) which were issued in 1993 as part of a $68 million issuance. At December 31, 2003, Simec had outstanding approximately $2 million of U.S. dollar-denominated debt. In March 2004, Simec prepaid $1.7 million of the remainder of its outstanding bank debt. At December 31, 2004 Simec owed no debt to its parent company, Industrias CH, S.A. de C.V. (“ICH”).

(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. 18,925 (U.S. $1,680,048) at December 31, 2004, (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. Compañía Siderurgica de Guadalajara, S.A. de C.V. has entered into a gas and liquid oxygen purchase agreement with Praxair de México, 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. 1,207 per month.

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

RELATIONS OF SHARES INVESTMENTS
ANNEX 3

CONSOLIDATED

JUDGED INFORMATION

COMPANY NAME		MAIN ACTIVITIES		NUMBER OF SHARES		OWNERSHIP		TOTAL AMOUNT (Thousands of Pesos)
SUBSIDIARIES								ACQUISITION COST		PRESENT VALUE
1 CIA SIDERURGICA DE GUADALAJARA		MINI-MILL		10,495,205,984		99.99		1,049,521		4,536,294
2 ADMINISTRADORA DE CARTERA DE OCCIDENTE				49,999		99.99		50		(25,390	)
TOTAL INVESTMENT IN SUBSIDIARIES								1,049,571		4,510,904
ASSOCIATEDS				0		0.00		0		0
TOTAL INVESTMENT IN ASSOCIATEDS								0		0
OTHER PERMANENT INVESTMENTS										0
TOTAL										4,510,904

NOTES

MEXICAN STOCK EXCHANGE

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

ANNEX 05
CREDITS BREAK DOWN

(THOUSANDS OF PESOS)

CONSOLIDATED

JUDGED INFORMATION

Credit Type / Institution	Amortization Date	Rate of Interest	Denominated In Pesos		Amortization of Credits in Foreign Currency With National Entities (Thousands of Pesos)						Amortization of Credits in Foreign Currency With Foreing Entities (Thousands of Pesos)
					Time Interval						Time Interval
			Until 1 Year	More Than 1 Year	Current Year	Until 1 Year	Until 2 Years	Until 3 Years	Until 4 Years	Until 5 Years or More	Current Year	Until 1 Year	Until 2 Years	Until 3 Years	Until 4 Years	Until 5 Years or More
																	LETTER OF CREDIT
			BBVA Bancomer	3/31/2005	3.37				153,124
TOTAL BANKS			0	0	0	153,124	0	0	0	0	0	0	0	0	0	0
LISTED IN THE MEXICAN
STOCK EXCHANGE
UNSECURED DEBT
MEDIUM TERM NOTES	12/15/1998	9.33	0	0	0	0	0	0	0	0	3,402		0	0	0	0
TOTAL STOCK EXCHANGE			0	0	0	0	0	0	0	0	3,402	0	0	0	0	0
SUPPLIERS
VARIOUS			415,546	0	0	118,613	0	0	0	0	0	54,725	0	0	0	0
TOTAL SUPPLIERS			415,546	0	0	118,613	0	0	0	0	0	54,725	0	0	0	0
OTHER CURRENT LIABILITIES
AND OTHER CREDITS
VARIOUS			82,153	0	0	19,150	0	0	0	0	0	24,011	0	0	0	0
OTHER CURRENT LIABILITIES			82,153	0	0	19,150	0	0	0	0	0	24,011	0	0	0	0
AND OTHER CREDITS
TOTAL			497,699	0	0	290,887	0	0	0	0	3,402	78,736	0	0	0	0

NOTES:
       1.- The exchange rate of the peso to the U.S. Dollar at December 31, 2004 was Ps. 11.2648

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

MONETARY POSITION IN FOREIGN EXCHANGE
(Thousands of Pesos)

ANNEX 6

CONSOLIDATED

JUDGED INFORMATION

		DOLLARS				OTHER CURRENCIES				TOTAL
TRADE BALANCE		THOUSANDS OF DOLLARS		THOUSANDS OF PESOS		THOUSANDS OF DOLLARS		THOUSANDS OF PESOS		THOUSANDS OF PESOS
FOREING MONETARY POSITION
TOTAL ASSETS		68,091		767,017		0		0		767,017
LIABILITIES POSITION		32,809		369,600		304		3,425		373,025
SHORT TERM LIABILITIES POSITION		32,809		369,600		304		3,425		373,025
LONG TERM LIABILITIES POSITION		0		0		0		0		0
NET BALANCE		35,282		397,417		(304	)	(3,425	)	393,992

NOTES

        THE EXCHANGE RATE OF THE PESO TO THE U.S. DOLLAR AT DECEMBER 31, 2004 WAS PS. 11.2648

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

INTEGRATION AND INCOME
CALCULATION BY MONETARY POSITION
(Thousands of Pesos)

ANNEX 7

CONSOLIDATED

JUDGED INFORMATION

MONTH		MONETARY ASSETS		MONETARY LIABILITIES		(ASSET) LIABILITIES MONETARY POSITION		MONTHLY INFLATION		MONTHLY PROFIT AND (LOSS)
JANUARY		3,668,488		3,021,189		(647,299	)	0.62		(4,023	)
FEBRUARY		1,181,183		468,147		(713,036	)	0.60		(4,265	)
MARCH		1,400,780		596,467		(804,313	)	0.34		(2,725	)
APRIL		1,411,536		542,155		(869,381	)	0.15		(1,312	)
MAY		1,528,433		552,485		(975,948	)	(0.25	)	2,448
JUNE		1,748,525		551,719		(1,196,806	)	0.16		(1,918	)
JULY		1,890,011		488,639		(1,401,372	)	0.26		(3,673	)
AUGUST		2,097,374		484,552		(1,612,822	)	0.62		(9,956	)
SEPTEMBER		1,413,141		814,566		(598,575	)	0.83		(4,949	)
OCTOBER		1,468,531		640,756		(827,775	)	0.69		(5,733	)
NOVEMBER		1,673,344		697,878		(975,466	)	0.85		(8,321	)
DECEMBER		1,687,983		674,451		(1,013,532	)	0.21		(2,094	)
ACTUALIZATION										(783	)
CAPITALIZATION										0
FOREIGN CORPORATION										0
OTHER										1,717
TOTAL										(45,587	)

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

BONDS AND MEDIUM TERM NOTES LISTING IN STOCK MARKET

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 3.08 times.

B) Accomplished the actual situation is 0.26

C) Accomplished the actual situation is 124.70

As of December 31, 2004, the remaining balance of the MTNs not exchanged amounts to Ps. 3,402 ($302,000 dollars).

C.P. José Flores Flores
Chief Corporate Financial Planning Officer

BONDS AND/OR MEDIUM TERM NOTES CERTIFICATE

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

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		87
MEXICALI MINI MILL		PRODUCTION AND SALES OF STEEL PRODUCTS		250		75
INDUSTRIAS DEL ACERO Y DEL ALAMBRE		SALE OF STEEL PRODUCTS		0		0
APIZACO AND CHOLULA PLANTS		PRODUCTION AND SALES OF STEEL PRODUCTS		460		84

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

MAIN RAW MATERIALS
ANNEX 10

CONSOLIDATED

JUDGED INFORMATION

DOMESTIC		MAIN SUPPLIERS		FOREIGN		MAIN SUPPLIERS		DOMESTIC SUBSTITUTION		COST PRODUCTION (%)
SCRAP		VARIOUS		SCRAP		VARIOUS		YES		52.10
ELECTRICITY		C.F.E						NO		9.31
FERROALLOYS		MINERA AUTLAN		FERROALLOYS		GFM TRADING		YES		7.00
ELECTRODES		UCAR CARBON MEXICANA		ELECTRODES		SGL CARBON GROUP		YES		1.74

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

SELLS DISTRIBUTION BY PRODUCT
ANNEX 11

CONSOLIDATED

DOMESTIC SELLS

JUDGED INFORMATION

MAIN PRODUCTS		TOTAL PRODUCTION				NET SELLS				MAIN DESTINATION
		VOLUME		AMOUNT		VOLUME		AMOUNT		TRADEMARKS		COSTUMERS
STRUCTURAL PROFILES		185		744,404		168		1,210,888
COMMERCIAL PROFILES		87		373,131		83		609,624
REBAR		186		680,647		136		950,251
FLAT BAR		78		358,333		72		533,128
STEEL BARS		220		941,299		208		1,556,056
OTHER		4		3,048		8		48,794
BILLET		42		107,321		42		167,407
T O T A L				3,208,183				5,076,148

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

SELLS DISTRIBUTION BY PRODUCT
ANNEX 11

CONSOLIDATED

FOREIGN SELLS

JUDGED INFORMATION

MAIN PRODUCTS		TOTAL PRODUCTION				NET SELLS				MAIN DESTINATION
		VOLUME		AMOUNT		VOLUME		AMOUNT		TRADEMARKS		COSTUMERS
STRUCTURAL PROFILES						12		78,528
COMMERCIAL PROFILES						7		47,997
REBAR						56		354,096
STEEL BARS						20		115,160
FLAT BAR						2		11,023
T O T A L								606,804

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSOLIDATED

INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES

JUDGED INFORMATION

SERIES		NOMINAL VALUE		VALID CUPON		NUMBER OF SHARES								CAPITAL STOCK (Thousands of Pesos)
						FIXED PORTION		VARIABLE PORTION		MEXICAN		FREE SUSCRIPTION		FIXED		VARIABLE
B						15,283,350		118,259,634		0		133,542,984		222,963		1,725,192
TOTAL						15,283,350		118,259,634		0		133,542,984		222,963		1,725,192

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

133,542,984

SHARES PROPORTION BY :

CPO’S :	0
ADRS’s :	3,043,117 ADR’S OF 1 SHARE EACH ONE.
UNITS:	0
GDRS’s:	0
ADS’s:	0
GDS’s:	0

REPURCHASED OWN SHARES

				MARKET VALUE OF THE SHARE
SERIES		NUMBER OF SHARES		AT REPURCHASE	AT QUARTER

NOTES

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

CONSTRUCTION IN PROGRESS (Project, Total Investment and % of Advance)

ANNEX 13

CONSOLIDATED

JUDGED INFORMATION

THE PROYECTS IN PROGRESS AT DECEMBER 31, 2004, ARE:

PROYECTS IN PROGRESS TOTAL INVESTMENT PHISICAL ADVANCE FINISHED AT

PROYECTS IN PROGRESS		TOTAL INVESTMENT		PHISICAL ADVANCE		FINISHED AT
VARIOUS		11,140
TOTAL INVESTMENT AT DECEMBER 31, 2004		11,140

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

FOREIGN CURRENCY TRANSACTION AND EXCHANGE DIFFERENCES

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”. All foreign subsidiaries 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.

MEXICAN STOCK EXCHANGE
SIFIC / ICS

STOCK EXCHANGE CODE:   SIMEC
GRUPO SIMEC, S.A. DE C.V. QUARTER:   4    YEAR:  2004

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
CHIEF EXECUTIVE OFFICER  C.P. JOSE FLORES FLORES
CHIEF CORPORATE FINANCIAL PLANNING OFFICER

GUADALAJARA, JAL, AT MAY 3 OF 2005