SOURCE: Grupo TMM

April 28, 2008 18:26 ET

Grupo TMM Reports First-Quarter 2008 Financial Results

MEXICO CITY--(Marketwire - April 28, 2008) - Grupo TMM, S.A.B. (NYSE: TMM) and (BMV: TMM A) ("TMM" or the "Company"), a Mexican intermodal transportation and logistics company, reported today its financial results for the first quarter of 2008.

Comparing the first quarter of 2008 with the first quarter of 2007, TMM reported the following results:

--  Revenues of $85.9 million, up 25.2 percent from $68.6 million
--  Transportation income of $7.4 million, up 15.6 percent from $6.4
    million
--  Operating margin of 8.6 percent, down 0.7 percentage points
--  EBITDA of $16.2 million, up 26.6 percent from $12.8 million
--  Net loss of $10.3 million compared to a net loss of $5.1 million
    

MANAGEMENT OVERVIEW

José F. Serrano, chairman and chief executive officer of Grupo TMM, stated, "During the past several quarters TMM has substantially exceeded year-to-year comparisons in revenues, transportation income an EBITDA.

"We are pleased to announce the issuance in the Mexican Market of the securities of the second tranche of our Trust Certificates Program for $1.55 billion pesos, or approximately $136.9 million dollars, at a rate of TIIE, or Mexico's Interbank Equilibrium Interest Rate, +195 basis points. These Certificates will be funded Wednesday of this week.

"This accomplishment provides TMM the ability to grow through the acquisition of new ships with long-term financing tied to the useful life of these vessels and is non recourse to the Company. The second issuance of this Program was rated AA- (mex) by Fitch Ratings, reflecting TMM's continued quality operating performance, increased demand for maritime transportation services and the Mexican Navigation Law principles.

"The proceeds from the second tranche of this Program will be used to acquire additional offshore vessels, to repay existing debt, to fund cash reserves required for the structure and to pay issuance related expenses. We anticipate annual revenues from these new vessels of approximately $29.0 million and an annual EBITDA of approximately $21.8 million. With this issuance the net debt of the Company will increase $90 million.

"We expect to close the third tranche of our Trust Certificates Program for an estimated amount of $3.4 billion pesos in the third quarter of this year. With these proceeds, we anticipate to acquire seven vessels, to include product tankers and highly specialized offshore vessels.

"Pemex has published the final terms for five product tankers under bare boat and ship management contracts. As per their last public announcement, Pemex will receive bids at the end of May and will award these five-year contracts in June. If we were to be awarded with any of these contracts, we would acquire the necessary vessels with proceeds form the third tranche."

Serrano continued, "At Logistics, our trucking division showed improvement. Gross profit improved $0.6 million from a loss of $0.3 million in the first quarter of 2007 to a profit of $0.3 million in the first quarter of 2008. The average age of our current trucking fleet is five years, which will result in lower maintenance requirements and higher fuel efficiency, thereby improving profit. Our warehousing business continues to show growth quarter over quarter. However, overall results in the Logistics division were impacted by operating costs and expenses in the auto hauling business and by decreased sales in the automobile industry. As we complete the modernization and rehabilitation of equipment in this business, we expect to generate sustainable profit.

"On the financial costs side, the Company continues to pursue alternatives to extend the maturity and reduce the cost of its corporate debt. We believe every quarter we are closer to our goal."

Serrano concluded, "With continued improvement in consolidated operating profit, the acquisition of additional vessels with contracted revenues in our Maritime division, new equipment and new clients in place at our Logistics division and all our efforts to reduce financial and corporate costs throughout this year, we continue to build a solid platform for profit and growth."

FINANCIAL RESULTS

Comparing the first quarter of 2008 with the same period of 2007, consolidated revenues improved, specifically at Maritime and Logistics, mainly due to higher volumes. Increased consolidated transportation income for the first quarter of 2008 was mainly due to an improvement of $2.1 million at the Maritime division compared to the same period last year.

Costs and operating expenses of $68.8 million in the first quarter of 2008 increased 28.4 percent, from $53.6 million in the same period of last year. The increase in the first quarter of 2008 was impacted by the appreciation of the peso versus the dollar, by increased revenues, by an increase of $5.9 million of costs in vessel leases due to additional vessels in operation, and by costs related to the Company's auto hauling business.

Corporate expenses in the first quarter of 2008 were impacted by the appreciation of the peso versus the dollar. The ratio of corporate expenses to total revenue decreased to 5.4 percent in the first quarter of 2008 compared to 6.7 percent in the same period last year.

Other expense, net was $0.9 million in the first quarter of 2008, composed mainly of a non-recurring restructuring cost of $0.4 million and other related expenses.

Net financial cost in the first quarter of 2008 was $16.4 million, increasing $5.8 million compared to $10.6 million incurred in the same period of 2007. This increase was mainly due to a $6.8 million net increase in interests attributable to a higher balance of debt including the first issuance of Trust Certificates and to a $1.1 million increase in exchange loss due to the appreciation of the peso versus the dollar in the first quarter of 2008, partially reduced by an interest decrease of $2.1 million resulting from a prepayment of $50 million of the securitization facility.

BALANCE SHEET

Investments in Fixed Assets

As of March 31, 2008, the Company invested $54.4 million in fixed assets, which included: $36.5 million in the acquisition of one offshore vessel, $14.7 million in the acquisition of two tugboats, $2.4 million in the rehabilitation of the Company's facilities at Ciudad del Carmen and $0.8 million in Logistics related assets. As of March 31, 2008, the total market value of the Company's maritime assets is estimated to exceed their book value by $95 million.

Debt

As of March 31, 2008, TMM's total book value of debt was $508.6 million. This debt is supported by approximately $412 million of long-term contracted revenues.

                   Total Net Debt as of March 31, 2008 (1)
                         (Millions of dollars)

                    Trust Certificates (2)             $273.5
                    Securitization Facility             124.2
                    Vessels (3)                          91.1
                    Other Corporate Debt                 19.8
                    Total Debt (4)                      508.6
                                                       ------
                    Cash on hand                         56.8
                                                       ------
                    Total Net Debt                     $451.8

(1) Book value of debt
(2) 20-year term peso denominated debt, non recourse to the Company
    and rated AA (mex) by Fitch Ratings.
(3) Includes two chemical tankers, two tugboats and one offshore vessel
(4) Includes $10.8 million of accrued unpaid interest and is reduced by
    $24.8 million of issuance related expenses

SEGMENT RESULTS

Maritime

Comparing the first quarter of 2008 with the first quarter of 2007:

--  Revenues improved 16.7 percent to $48.9 million compared to $41.9
    million. Revenues increased at all businesses: in the offshore segment due
    to an improved revenue mix -- in the product tanker segment as a result of
    operating two additional vessels, in the harbor towage segment due to
    increased volumes and to operating two additional vessels, and in the
    chemical tanker segment due  to a better freight mix and increased tonnage
    per trip.
--  Transportation income improved 19.6 percent to $13.4 million compared
    to $11.2 million due to profit improvements at all business segments. At
    the chemical tanker segment, gross profit increased 226 percent to $1.4
    million due to operating two owned vessels that were leased in the first
    quarter of 2007, thereby reducing operating costs.
--  EBITDA of $18.8 million compared to $16.1 million
    

Logistics

Comparing the first quarter of 2008 with the first quarter of 2007:

--  Revenues improved 38.2 percent to $33.3 million compared to $24.1
    million. Revenues increased at the trucking segment due to improved freight
    volumes and to longer hauls, at inbound logistics attributable to higher
    volumes, and in warehousing operations due to higher inventories. Auto
    hauling contributed $5.7 million of revenues. Maintenance and repair
    revenues decreased in the first quarter due to a reduction of container
    volumes, particularly at a yard facility at Veracruz.
--  Transportation loss of $1.7 million compared to a transportation loss
    of $1.3 million, impacted by $5.5 million of costs and operating expenses
    at the auto hauling business segment, which mainly included fuel,
    maintenance of equipment and personnel costs, and to a gross loss in
    inbound logistics due to delays in assembly lines.
--  EBITDA of $0.6 million compared to a loss of $0.2 million
    

Ports and Terminals

Comparing the first quarter of 2008 with the first quarter of 2007:

--  Revenues decreased $0.3 million to $2.4 million compared to $2.7
    million. This decrease was mainly due to a reduction of revenues in the
    cruise ship segment at Acapulco due to a change of routes of two major
    liners and to lower revenues at the shipping agencies segment. As a result,
    transportation income decreased $0.3 million to $0.7 million.
--  EBITDA of $0.9 million compared to $1.3 million
    

           EBITDA COMPARISON BY SEGMENT
             (Millions of US dollars)

                          Q1 2008       Q1 2007
                          -------       -------
Maritime                  $  18.8       $  16.1
Logistics                     0.6          (0.2)
Ports                         0.9           1.3
Corporate and others         (4.1)         (4.4)
                          -------       -------
Total                     $  16.2       $  12.8

CONFERENCE CALL

TMM's management will host a conference call and Webcast to review financial and operational highlights on Tuesday, April 29 at 11:00 a.m. Eastern Time.

To participate in the conference call, please dial (877) 888-4605 (domestic) or (416) 695-6320 (international) at least five minutes prior to the start of the event. Accompanying visuals and a simultaneous Webcast of the meeting will be available at http://www.visualwebcaster.com/event.asp?id=47248.

A replay of the conference call will be available through May 6 at 11:59 p.m. Eastern time, by dialing (800) 408-3053 or (416) 695-5800, and entering conference ID 626804. On the Internet a replay will be available for 30 days at http://www.visualwebcaster.com/event.asp?id=47248.

Headquartered in Mexico City, TMM is a Latin American intermodal transportation company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. Visit TMM's Web site at www.grupotmm.com. The site offers Spanish/English language options.

Included in this press release are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements speak only as of the date they are made and are based on the beliefs of the Company's management as well as on assumptions made. Actual results could differ materially from those included in such forward-looking statements. Readers are cautioned that all forward-looking statements involve risks and uncertainty. The following factors could cause actual results to differ materially from such forward-looking statements: global, US and Mexican economic and social conditions; the effect of the North American Free Trade Agreement on the level of US-Mexico trade; the condition of the world shipping market; the success of the Company's investment in new businesses; risks associated with the Company's reorganization and restructuring; the ability of the Company to reduce corporate overhead costs; the ability of management to manage growth and successfully compete in new businesses; and the ability of the Company to restructure or refinance its indebtedness. These risk factors and additional information are included in the Company's reports on Form 6-K and 20-F on file with the United States Securities and Exchange Commission.

                    Grupo TMM, S.A.B. and subsidiaries
             * Balance Sheet (under discontinuing operations)
                          - millions of dollars -


                                                --------------------------
                                                  March 31,   December 31,
                                                    2008          2007
                                                --------------------------
Current assets:
Cash and cash equivalents                             56.830        52.235
                                                ------------  ------------
Accounts receivable
   Accounts receivable - Net                          50.908        44.812
                                                ------------  ------------
   Other accounts receivable                          39.180        32.698
                                                ------------  ------------
   Prepaid expenses and others current assets         15.159        12.506
                                                ------------  ------------
Total current assets                                 162.077       142.251
                                                ============  ============
Property, machinery and equipment                    502.937       453.069
                                                ------------  ------------
Cumulative Depreciation                             (114.137)     (108.830)
                                                ------------  ------------
Property, machinery and equipment - Net              388.800       344.239
                                                ============  ============
Other assets                                          60.113        59.866
                                                ============  ============
Deferred taxes                                       115.818       115.818
                                                ============  ============
Total assets                                         726.808       662.174
                                                ============  ============

Current liabilities:
Bank loans and current maturities of long-term
 liabilities                                          33.596        17.787
                                                ------------  ------------
Sale of accounts receivable                           13.869        13.463
                                                ------------  ------------
Suppliers                                             35.149        28.660
                                                ------------  ------------
Other accounts payable and accrued expenses           47.044        40.127
                                                ------------  ------------
      Total current liabilities                      129.658       100.037
                                                ============  ============
Long-term liabilities:
   Bank loans and other obligations                  350.857       303.229
                                                ------------  ------------
   Sale of accounts receivable                       110.292       113.362
                                                ------------  ------------
   Other long-term liabilities                        27.303        26.684
                                                ------------  ------------
Total long-term liabilities                          488.452       443.275
                                                ============  ============

Total liabilities                                    618.110       543.312
                                                ============  ============
Stockholders' equity
   Common stock                                      120.998       121.094
                                                ------------  ------------
   Retained earnings                                   1.609        11.885
                                                ------------  ------------
   Initial accumulated translation loss              (17.757)      (17.757)
                                                ------------  ------------
Cumulative translation adjusted                       (1.924)       (2.263)
                                                     102.926       112.959
                                                ------------  ------------
   Minority interest                                   5.772         5.903
                                                ------------  ------------
Total stockholders' equity                           108.698       118.862
                                                ============  ============
Total liabilities and stockholders' equity           726.808       662.174
                                                ============  ============

*Prepared in accordance with International Financial Reporting Standards.



                    Grupo TMM, S.A.B. and subsidiaries
          * Statement of Income (under discontinuing operations)
                          - millions of dollars -


                                                --------------------------
                                                    Three months ended
                                                        March 31,
                                                    2008          2007
                                                --------------------------

Ports                                                  2.431         2.734
Maritime                                              48.953        41.884
Logistics                                             33.318        24.085
Corporate and others                                   1.215        (0.084)
                                                ------------  ------------
Revenue from freight and services                     85.917        68.619
                                                ------------  ------------
Ports                                                 (1.556)       (1.529)
Maritime                                             (31.924)      (27.229)
Logistics                                            (33.837)      (24.919)
Corporate and others                                  (1.538)        0.093
                                                ------------  ------------
Cost of freight and services                         (68.855)      (53.584)
                                                ------------  ------------
Ports                                                 (0.216)       (0.192)
Maritime                                              (3.625)       (3.403)
Logistics                                             (1.218)       (0.425)
Corporate and others                                  (0.003)       (0.004)
                                                ------------  ------------
Depreciation of vessels and equipment                 (5.062)       (4.024)
                                                ------------  ------------

Corporate expenses                                    (4.606)       (4.616)
                                                ------------  ------------
Ports                                                  0.659         1.013
Maritime                                              13.404        11.252
Logistics                                             (1.737)       (1.259)
Corporate and others                                  (4.932)       (4.611)
                                                ------------  ------------
Transportation Income                                  7.394         6.395
                                                ------------  ------------
Other (expenses) income - Net                         (0.899)        0.108
                                                ------------  ------------
Operating Income                                       6.495         6.503
                                                ============  ============
Financial (expenses) income - Net                    (14.512)       (9.838)
                                                ------------  ------------
Exchange (loss) gain - Net                            (1.890)       (0.782)
                                                ------------  ------------
Net financial cost                                   (16.402)      (10.620)
                                                ------------  ------------

Loss before taxes                                     (9.907)       (4.117)
                                                ============  ============

Provision for taxes                                                 (0.569)
                                                ------------  ------------

Net loss for the period                               (9.907)       (4.686)
                                                ============  ============
Attributable to:
   Minority interest                                   0.372         0.374
Equity holders of GTMM, S.A.B.                       (10.279)       (5.060)
                                                ============  ============

Weighted average outstanding shares (millions)        56.897        56.963
Loss earnings per share (dollars / share)             (0.181)       (0.089)

Outstanding shares at end of period (millions)        56.888        56.963
Loss earnings per share (dollars / share)             (0.181)       (0.089)
                                                ============  ============

*Prepared in accordance with International Financial Reporting Standards.



                    Grupo TMM, S.A.B. and subsidiaries
          * Statement of Cash Flow (under discontinuing operations)
                          - millions of dollars -


                                                --------------------------
                                                    Three months ended
                                                        March 31,
                                                    2008          2007
                                                --------------------------

Cash flow from operation activities:
Net  loss before discontinuing operations             (9.907)       (4.686)
                                                ------------  ------------

Charges (credits) to income not affecting
 resources:
      Depreciation & amortization                      8.766         6.363
                                                ------------  ------------
      Other non-cash items                             9.610        10.058
                                                ------------  ------------
   Total non-cash items                               18.376        16.421
                                                ------------  ------------
      Changes in assets & liabilities                  7.110         2.279
                                                ------------  ------------
   Total adjustments                                  25.486        18.700
                                                ------------  ------------

   Net cash provided by operating activities          15.579        14.014
                                                ============  ============

Cash flow from investing activities:
   Proceeds from sales of assets                       0.038         0.620
                                                ------------  ------------
   Payments for purchases of assets                  (54.390)      (32.445)
                                                ------------  ------------
   Acquisition of shares of subsidiaries                            28.275
                                                ------------  ------------
   Common stock  decrease of subsidiaries             (0.490)
                                                ------------  ------------

   Net cash used in investment activities            (54.842)       (3.550)
                                                ============  ============
Cash flow provided by financing activities:
   Short-term borrowings (net)                         2.743         5.396
                                                ------------  ------------
   Sale (repurchase) of accounts receivable
    (net)                                             (7.296)      (10.108)
                                                ------------  ------------
   Repayment of long-term debt                        (4.744)      (10.507)
                                                ------------  ------------
   Proceeds from issuance of long-term debt           53.250
                                                ------------  ------------
   Sale (Acquisition) of treasury shares, net         (0.095)
                                                ------------  ------------

   Net cash provided (used in) by financing
    activities                                        43.858       (15.219)
                                                ============  ============

   Net increase (decrease)  in cash                    4.595        (4.755)
                                                ------------  ------------
   Cash at beginning of period                        52.235        38.666
                                                ------------  ------------
   Cash at end of period                              56.830        33.911
                                                ============  ============

*Prepared in accordance with International Financial Reporting Standards.

Contact Information

  • TMM COMPANY CONTACT:
    Jacinto Marina
    Chief Financial Officer
    011-525-55-629-8866 ext. 2901
    Email Contact

    Monica Azar
    Investor Relations
    917-597-5361 or
    011-525-55-629-8866 ext. 3421
    Email Contact

    AT DRESNER CORPORATE SERVICES:
    Kristine Walczak
    (investors, analysts, media)
    312-726-3600
    Email Contact