SOURCE: Grupo TMM

Grupo TMM

July 28, 2011 16:01 ET

Grupo TMM Reports Second-Quarter 2011 Financial Results

MEXICO CITY--(Marketwire - Jul 28, 2011) - Grupo TMM, S.A.B. (NYSE: TMM) (BMV: TMM A) ("TMM" or the "Company"), a Mexican intermodal transportation and logistics Company, reported today its financial results for the second quarter and first six months of 2011.

MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "Second-quarter results continued to be affected by a challenging shipping marketplace, including the global reduction of tariffs for offshore vessels and product tankers, which impacted revenue and profit at Maritime compared to the second quarter of 2010. Notwithstanding, Maritime's operational results and fleet utilization improved from the first quarter of this year."

Serrano continued, "Prospects for a rebound in the shipping market look promising as tariffs appear to have hit bottom, which should translate in operational improvements at Maritime in upcoming quarters. Additionally, we are working diligently to add medium and long-term contracts to our fleet."

Serrano concluded, "We continue to work on the implementation of our five-year growth plan, which includes the development of a container and liquids terminal at the Port of Tuxpan, Veracruz, and the addition of specialized offshore vessels to TMM's fleet to meet the increasing demand for deep water exploration in Mexico. We are actively pursuing the financial implementation of these projects, which will allow TMM to grow and improve its capital structure."

SECOND-QUARTER AND FIRST SIX-MONTHS 2011 FINANCIAL AND OPERATING RESULTS
Compared to the same periods of last year, consolidated revenue in the second quarter and first six months of 2011, decreased 7.7 percent and 13.4 percent, respectively, mainly due to reduced revenue at Maritime.

Consolidated operating profit increased 35.4 percent in the second quarter of 2011, but decreased 12.5 percent in the first half of 2011 compared to the same periods of 2010. Consolidated operating profit in the second quarter of 2011 included other income net of $6.4 million, mainly attributable to the recovery of certain tax incentives.

Compared to the same periods of last year, consolidated EBITDA in the second quarter of 2011 increased 10.0 percent to $24.3 million, and in the first half of 2011 decreased 5.1 percent to $42.8 million.

Interest expense in the second quarter of 2011 and first six months of 2011 was $17.4 million and $8.6 million, respectively. EBITDA minus interest expense resulted in free cash flow of $6.9 million in the second quarter of 2011 and of $8.2 million in the first half of 2011.

Compared to the same periods of last year, Maritime revenue in the second quarter and first six months of 2011 decreased 15.7 percent and 18.7 percent, respectively, compared to the same periods of last year. Second-quarter 2011 and first six-months 2011 operating profit was down 33.7 percent and 32.4 percent, respectively, compared to the same periods of last year. These reductions were partially offset by revenue and profit increases at harbor tugs due to increased vessel calls at Manzanillo.

Year over year, in the first six months of 2011, offshore revenue decreased 21.1 percent to $50.1 million, negatively impacted by lower average daily tariffs, lower utilization and three less vessels in operation, compared to the same period of 2010. Also in the first half of 2011, product tanker revenue decreased 17.7 percent to $16.7 million attributable to lower average daily tariffs and to lower utilization compared to the same period of last year. Six-month chemical tanker revenue decreased 25.2 percent to $9.8 million compared to the same period of 2011 as a result of having one less vessel in operation in the second quarter and to lower freight volumes in the first half of 2011 compared to last year.

Compared to the same periods of last year, Ports and Terminals' second-quarter and first six-month 2011 revenue increased 21.0 percent and 18.5 percent, respectively. Year over year, second-quarter and six-month 2011 operating profit remained unchanged at $1.4 million and $3.4 million, respectively.

Compared to the same period of last year, first six-month 2011 revenue increased at the automotive segment by 66.7 percent to $4.0 million due to higher volumes, from 298,665 automobiles to 363,599 automobiles. Maintenance and repair segment revenue increased 14.3 percent to $4.0 million in the first half comparison due mainly to higher volumes at the Manzanillo depot and to the addition of a new client at Altamira in the second quarter. At Acapulco, first six-month 2011 revenue decreased 2.6 percent to $3.8 million, as two cruise ship lines changed routes in the first quarter of 2011, partially offset by a 52.8 percent revenue increase in the car handling segment due to higher export volumes.

Compared to second-quarter 2010, Logistics revenue increased 6.7 percent in second-quarter 2011. Excluding $6.7 million of revenue from the sale of assets in April 2010, Logistics revenue increased 7.6 percent in the first half of 2011 compared to the same period of 2010. These increases were mainly attributable to higher revenue at the auto hauling segment, which increased 43.2 percent in second-quarter 2011 and 46.6 percent in first-half 2011, compared to the same periods of last year as a result of higher volumes.

DEBT
As of June 30, 2011, TMM's total debt was $892.0 million. The Company's Trust Certificates debt was negatively impacted by $43.3 million from the appreciation of the peso versus the dollar in the 2011 first half. On February 15, 2011, the Company paid approximately $44.5 million of its Trust Certificates debt, including a capital prepayment of $8.4 million, and on May 13, 2011, prepaid the remaining balance of its securitization facility with Deutsche Bank of approximately $9.1 million.

Total Debt
Million of U.S. Dollars
As of 12/31/10 As of 06/30/11
Mexican Trust Certificates (1) $ 786.4 $ 822.6
Securitization Facility 11.8 0.0
Other Corporate Debt 73.9 69.4
Total Debt (2) $ 872.1 $ 892.0

(1) 20-year term and non recourse to the Company
(2) Of total debt, only $22.0 million, or 2.5 percent, is short- term
Exchange Rate: 12.38 pesos/dollar at December 31, 2010 and 11.77 pesos/dollar at June 30, 2011

CONFERENCE CALL
TMM's management will host a conference call and Webcast to review financial and operational highlights on Friday, July 29 at 11:00 a.m. Eastern time.

To participate in the conference call, please dial (888) 349-9585 (domestic) or (719) 325-2262 (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=81287.

A replay of the conference call will be available through August 28 at 11:59 p.m. Eastern time, by dialing (888) 203-1112 or (719) 457-0820, and entering passcode 1429969. On the Internet a replay will be available for 30 days at: http:@//www.visualwebcaster.com/event.asp?id=81287.

Headquartered in Mexico City, TMM is a Mexican intermodal transportation and logistics 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 Section27A 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*
- millions of dollars -
June 30, December 31,
2011 2010
Current assets:
Cash and cash equivalents 91.136 142.319
Accounts receivable
Accounts receivable - Net 51.374 37.594
Other accounts receivable 23.082 20.870
Prepaid expenses and others current assets 12.738 11.116
Non-current assets held for sale 0.717
Total current assets 178.330 212.616
Property, machinery and equipment 935.123 924.188
Cumulative Depreciation (190.369 ) (173.682 )
Property, machinery and equipment - Net 744.754 750.506
Other assets 43.570 45.248
Deferred taxes 67.492 67.492
Total assets 1,034.146 1,075.862
Current liabilities:
Bank loans and current maturities of long-term liabilities 22.027 23.672
Sale of accounts receivable 0.216 11.223
Suppliers 23.056 23.181
Other accounts payable and accrued expenses 52.201 46.988
Total current liabilities 97.500 105.064
Long-term liabilities:
Bank loans 52.756 61.072
Trust certificates debt 812.903 775.536
Sale of accounts receivable 4.133 0.550
Other long-term liabilities 15.410 28.770
Total long-term liabilities 885.202 865.928
Total liabilities 982.702 970.992
Stockholders' equity
Common stock 155.177 155.177
Retained earnings (159.866 ) (97.033 )
Revaluation surplus 64.097 64.097
Initial accumulated translation loss (17.757 ) (17.757 )
Cumulative translation adjusted 0.058 (8.522 )
41.709 95.962
Minority interest 9.735 8.908
Total stockholders' equity 51.444 104.870
Total liabilities and stockholders' equity 1,034.146 1,075.862

*Prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Grupo TMM, S.A.B. and subsidiaries
Statement of Income*
- millions of dollars -
Three months ended Six months ended
June 30, June 30,
2011 2010 2011 2010
Ports and Terminals 6.898 5.722 14.078 11.885
Maritime 43.568 51.676 83.225 102.388
Logistics 19.171 18.025 38.260 42.300
Revenue from freight and services 69.637 75.423 135.563 156.573
Ports and Terminals (5.178 ) (3.995 ) (10.008 ) (7.762 )
Maritime (22.529 ) (24.821 ) (43.205 ) (52.298 )
Logistics (19.600 ) (18.903 ) (38.268 ) (42.511 )
Cost of freight and services (47.307 ) (47.719 ) (91.481 ) (102.571 )
Ports and Terminals (0.303 ) (0.361 ) (0.616 ) (0.725 )
Maritime (10.424 ) (10.855 ) (20.443 ) (21.058 )
Logistics (2.699 ) (2.737 ) (5.257 ) (4.590 )
Corporate and others (0.211 ) (0.296 ) (0.396 ) (0.377 )
Depreciation and amortization (13.637 ) (14.249 ) (26.712 ) (26.750 )
Corporate expenses (4.348 ) (3.666 ) (8.477 ) (7.167 )
Ports and Terminals 1.417 1.366 3.454 3.398
Maritime 10.615 16.000 19.577 29.032
Logistics (3.128 ) (3.615 ) (5.265 ) (4.801 )
Corporate and others (0.211 ) (0.296 ) (0.396 ) (0.377 )
Other (expenses) income - Net 6.385 (1.905 ) 7.170 (1.657 )
Operating Income 10.730 7.884 16.063 18.428
Financial (expenses) income - Net (27.797 ) (15.301 ) (43.196 ) (32.202 )
Exchange gain (loss) - Net (10.313 ) 23.307 (41.674 ) (10.960 )
Net financial cost (38.110 ) 8.006 (84.870 ) (43.162 )
(Loss) gain before taxes (27.380 ) 15.890 (68.807 ) (24.734 )
Provision for taxes (2.382 ) (1.024 ) (2.821 ) (1.528 )
Net (loss) gain for the period (29.762 ) 14.866 (71.628 ) (26.262 )
Attributable to:
Minority interest 0.365 0.395 0.827 0.937
Equity holders of GTMM, S.A.B. (30.127 ) 14.471 (72.455 ) (27.199 )
Weighted average outstanding shares (millions) 101.995 102.014 101.995 102.019
Income (loss) earnings per share (dollars / share) (0.30 ) 0.14 (0.71 ) (0.27 )
Outstanding shares at end of period (millions) 101.995 101.995 101.995 101.995
Income (loss) earnings per share (dollars / share) (0.30 ) 0.14 (0.71 ) (0.27 )

*Prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Grupo TMM, S.A.B. and subsidiaries
Statement of Cash Flows*
- millions of dollars -
Three months ended Six months ended
June 30, June 30,
2011 2010 2011 2010
Cash flow from operation activities:
Net (loss) gain for the period (29.762 ) 14.866 (71.628 ) (26.262 )
Charges (credits) to income not affecting resources:
Depreciation & amortization 16.030 15.884 32.043 30.196
Other non-cash items 29.336 (8.166 ) 77.050 42.632
Total non-cash items 45.366 7.718 109.093 72.828
Changes in assets & liabilities (0.968 ) (5.243 ) (20.401 ) (18.206 )
Total adjustments 44.398 2.475 88.692 54.622
Net cash provided by operating activities 14.636 17.341 17.064 28.360
Cash flow from investing activities:
Proceeds from sales of assets 0.462 0.418 2.808 4.585
Payments for purchases of assets (3.018 ) (8.147 ) (5.525 ) (10.855 )
Sale of share of subsidiaries 4.062 4.062
Net cash used in investment activities (2.556 ) (3.667 ) (2.717 ) (2.208 )
Cash flow provided by financing activities:
Short-term borrowings (net) 2.219 7.203
Sale (repurchase) of accounts receivable (net) (9.119 ) (2.608 ) (11.559 ) (4.450 )
Repayment of long-term debt (12.039 ) (17.368 ) (62.560 ) (30.930 )
Proceeds from issuance of long-term debt 4.600 1.560 4.600 1.560
Acquisition of treasury shares, net (0.013 ) (0.013 )
Net cash used in financing activities (16.558 ) (16.210 ) (69.519 ) (26.630 )
Exchange losses on cash 0.712 (0.370 ) 3.989 1.281
Net (decrease) increase in cash (3.766 ) (2.906 ) (51.183 ) 0.803
Cash at beginning of period 94.902 87.953 142.319 84.244
Cash at end of period 91.136 85.047 91.136 85.047

*Prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Contact Information

  • TMM COMPANY CONTACT:
    Jacinto Marina
    Deputy CEO
    011-525-55-629-8718
    Email Contact

    Monica Azar
    Investor Relations
    011-525-55-629-8703
    Email Contact

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