SOURCE: Grupo TMM

Grupo TMM

October 26, 2011 16:05 ET

Grupo TMM Reports Third-Quarter 2011 Financial Results

Free Cash Flow Positive Throughout 2011

MEXICO CITY--(Marketwire - Oct 26, 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 third quarter and first nine months of 2011.

MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "Third-quarter consolidated operational results continued to be affected by a challenging economic marketplace. At Maritime, third-quarter results were negatively impacted by the global reduction of tariffs for offshore vessels and product tankers compared to the third quarter of 2010. However, Maritime's revenue and fleet utilization sequentially improved from the first and second quarters of this year. In the third quarter of 2011, our offshore fleet utilization was at 88 percent and our product tanker utilization was at 99 percent, both well above the industry average."

Serrano continued, "Our strategy to renew our maritime fleet through a 20-year, peso denominated financing with no recourse to the Company benefitted us in the third quarter, as the peso depreciated 14.3 percent versus the dollar, reducing the book value of our peso denominated debt, which represents over 90 percent of our total debt."

Serrano concluded, "During the third quarter, we continued to work very closely with selected, interested parties for the financial implementation of the development of a container and liquids terminal at the Port of Tuxpan and the addition of specialized offshore vessels to TMM's fleet. These projects will be funded with a combination of equity and debt. We have satisfied all preliminary requirements, so once the funding is in place, we will be ready to carry out these projects, which will significantly improve our revenue base, profits and capital structure."

THIRD-QUARTER AND FIRST NINE-MONTH 2011 FINANCIAL AND OPERATING RESULTS
Compared to the same periods of last year, third-quarter and first nine-month 2011 revenue decreased 8.0 percent and 11.7 percent, respectively, mainly due to revenue reductions at Maritime.

Third-quarter and first nine-month 2011 consolidated operating profit decreased 28.6 percent and 17.5 percent, respectively, compared to the same periods of 2010. Consolidated operating profit included other income net of $1.5 million in the 2011 third quarter and of $8.6 million in the 2011 first nine months, mainly attributable to the recovery of certain tax incentives.

Compared to the same periods of last year, consolidated EBITDA decreased 15.8 percent to $18.7 million in the third quarter of 2011 and decreased 8.7 percent to $61.5 million in the first nine months of 2011.

Interest expense in the 2011 third quarter and in the 2011 first nine months was $16.6 million and $51.2 million, respectively. EBITDA minus interest expense resulted in free cash flow of $2.2 million in the 2011 third quarter and of $10.3 million in the 2011 first nine months.

Net financial cost benefitted by net exchange gains of $109.0 million and $67.3 million in the 2011 third quarter and in the 2011 first nine months, respectively, as a result of the depreciation of the peso versus the dollar. The peso depreciated 14.3 percent in the 2011 third quarter and 8.7 percent in the 2011 first nine months.

Maritime revenue in the third quarter and first nine months of 2011 decreased 12.9 percent and 16.7 percent, respectively, compared to the same periods of last year. Third-quarter and first nine-month 2011 operating profit was down 29.5 percent and 31.4 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 and to higher revenue per call.

Year over year, in the 2011 first nine months, offshore revenue decreased 20.4 percent to $76.1 million, negatively impacted by lower average daily tariffs, lower utilization and three less vessels in operation. Product tanker revenue decreased 10.7 percent to $27.4 million attributable to lower average daily tariffs and to lower utilization. Chemical tanker revenue decreased 24.7 percent to $14.0 million as a result of having one less vessel in operation in the second and third quarters and to lower freight volumes. However, the chemical tanker segment returned to profitability in the 2011 third quarter generating $0.6 million of gross profit.

Compared to the same periods of last year, Ports and Terminals third-quarter and first nine-month 2011 revenue increased 25.4 percent and 20.1 percent, respectively. This revenue increase was partially offset by lower revenue in the cruise ship segment at Acapulco and in shipping agencies in both 2011 periods, as some cruise lines changed routes from the Pacific to other destinations. Year over year, operating profit in the 2011 third quarter remained unchanged at $1.0 million and in the 2011 nine months increased 2.3 percent.

Compared to the same period of last year, first nine-month 2011 revenue increased 57.9 percent at the automotive segment to $6.0 million, and gross profit improved 83.3 percent, due to higher volumes, from 457,775 automobiles to 592,975 automobiles. Third-quarter 2011 car handling revenue at Acapulco nearly doubled, increasing 96.1 percent to $1.2 million, compared to the same period last year, contributing to this division's first nine-month 2011 revenue improvement. Maintenance and repair revenue increased 13.2 percent to $6.0 million in the first nine-month comparison due mainly to higher volumes at the Manzanillo depot and to the addition of a new client at Altamira in the second quarter.

Compared to the third quarter of 2010, Logistics revenue decreased 4.4 percent in the 2011 period. Excluding $6.7 million of revenue from the sale of assets in April 2010, Logistics revenue increased 3.5 percent in the first nine months of 2011 compared to the same period of 2010. The increase in the first nine months of 2011 was mainly attributable to higher revenue at the auto hauling segment, which improved 32.8 percent compared to the same period of last year, as a result of higher volumes.

DEBT
As of September 30, 2011, TMM's total debt was $761.5 million. The Company's Trust Certificates debt was reduced by $66.8 million from the depreciation of the peso versus the dollar in the 2011 first nine months, as a result of the strengthening of the dollar versus the peso in August and September. Also, in the 2011 first nine months, the Company reduced its net debt by $30.8 million.

Total Debt
Million of U.S. Dollars
As of 12/31/10 As of 09/30/11
Mexican Trust Certificates (1) $ 786.4 $ 697.2
Securitization Facility 11.8 0.0
Other Corporate Debt 73.9 64.3
Total Debt (2) $ 872.1 $ 761.5

(1) 20-year term and non recourse to the Company
(2) Of total debt, only $11.0 million, or 1.4 percent, is short- term
Exchange Rate: 12.38 pesos/dollar at December 31, 2010, and 13.46 pesos/dollar at September 30, 2011

CONFERENCE CALL
TMM's management will host a conference call and Webcast to review financial and operational highlights on Thursday, October 27 at 11:00 a.m. Eastern time.

To participate in the conference call, please dial (888) 401-4689 (domestic) or (719) 325-2227 (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=82770.

A replay of the conference call will be available through November 26 at 11:59 p.m. Eastern time, by dialing (888) 203-1112 or (719) 457-0820, and entering passcode 5334947. On the Internet a replay will be available for 30 days at: http://www.visualwebcaster.com/event.asp?id=82770.

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 10-K and 20-F on file with the United States Securities and Exchange Commission.

Financial tables follow...

Grupo TMM, S.A.B. and subsidiaries
Balance Sheet*
- millions of dollars -
September 30, December 31,
2011 2010
Current assets:
Cash and cash equivalents 57.035 142.319
Accounts receivable
Accounts receivable - Net 46.543 37.594
Other accounts receivable 24.910 20.870
Prepaid expenses and others current assets 13.431 11.116
Non-current assets held for sale 0.717
Total current assets 141.919 212.616
Property, machinery and equipment 921.369 924.188
Cumulative Depreciation (196.284 ) (173.682 )
Property, machinery and equipment - Net 725.085 750.506
Other assets 40.454 45.248
Deferred taxes 67.478 67.492
Total assets 974.936 1,075.862
Current liabilities:
Bank loans and current maturities of long-term liabilities 10.851 23.672
Sale of accounts receivable 0.159 11.223
Suppliers 24.072 23.181
Other accounts payable and accrued expenses 53.161 46.988
Total current liabilities 88.243 105.064
Long-term liabilities:
Bank loans 51.663 61.072
Trust certificates debt 694.312 775.536
Sale of accounts receivable 4.567 0.550
Other long-term liabilities 13.816 28.770
Total long-term liabilities 764.358 865.928
Total liabilities 852.601 970.992
Stockholders´ equity
Common stock 155.177 155.177
Retained earnings (68.273 ) (97.033 )
Revaluation surplus 64.097 64.097
Initial accumulated translation loss (17.757 ) (17.757 )
Cumulative translation adjusted (17.595 ) (8.522 )
115.649 95.962
Minority interest 6.686 8.908
Total stockholders´ equity 122.335 104.870
Total liabilities and stockholders´ equity 974.936 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 Nine months ended
September 30, September 30,
2011 2010 2011 2010
Ports and Terminals 6.864 5.502 20.942 17.387
Maritime 44.551 51.060 127.776 153.448
Logistics 17.424 18.231 55.684 60.531
Revenue from freight and services 68.839 74.793 204.402 231.366
Ports and Terminals (5.537 ) (4.115 ) (15.545 ) (11.877 )
Maritime (23.634 ) (25.208 ) (66.839 ) (77.506 )
Logistics (17.981 ) (19.065 ) (56.249 ) (61.576 )
Cost of freight and services (47.152 ) (48.388 ) (138.633 ) (150.959 )
Ports and Terminals (0.296 ) (0.360 ) (0.912 ) (1.085 )
Maritime (10.420 ) (10.930 ) (30.863 ) (31.988 )
Logistics (1.733 ) (2.308 ) (6.990 ) (6.898 )
Corporate and others (0.261 ) (0.216 ) (0.657 ) (0.593 )
Depreciation and amortization (12.710 ) (13.814 ) (39.422 ) (40.564 )
Corporate expenses (4.398 ) (3.487 ) (12.875 ) (10.654 )
Ports and Terminals 1.031 1.027 4.485 4.425
Maritime 10.497 14.922 30.074 43.954
Logistics (2.290 ) (3.142 ) (7.555 ) (7.943 )
Corporate and others (0.261 ) (0.216 ) (0.657 ) (0.593 )
Other (expenses) income - Net 1.473 (0.694 ) 8.643 (2.351 )
Operating Income 6.052 8.410 22.115 26.838
Financial (expenses) income - Net (20.284 ) (21.084 ) (63.480 ) (53.286 )
Exchange gain (loss) - Net 109.014 (12.879 ) 67.340 (23.839 )
Net financial cost 88.730 (33.963 ) 3.860 (77.125 )
Gain (loss) before taxes 94.782 (25.553 ) 25.975 (50.287 )
Provision for taxes (3.153 ) (1.603 ) (5.974 ) (3.131 )
Net gain (loss) for the period 91.629 (27.156 ) 20.001 (53.418 )
Attributable to:
Minority interest 0.036 0.082 0.863 1.019
Equity holders of GTMM, S.A.B. 91.593 (27.238 ) 19.138 (54.437 )
Weighted average outstanding shares (millions) 101.995 101.995 101.995 101.013
Income (loss) earnings per share (dollars / share) 0.90 (0.27 ) 0.19 (0.54 )
Outstanding shares at end of period (millions) 101.995 101.995 101.995 101.995
Income (loss) earnings per share (dollars / share) 0.90 (0.27 ) 0.19 (0.53 )

*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 Nine months ended
September 30, September 30,
2011 2010 2011 2010
Cash flow from operation activities:
Net gain (loss) for the period 91.629 (27.156 ) 20.001 (53.418 )
Charges (credits) to income not affecting resources:
Depreciation & amortization 14.591 15.773 46.634 45.969
Other non-cash items (86.612 ) 30.651 (9.562 ) 73.283
Total non-cash items (72.021 ) 46.424 37.072 119.252
Changes in assets & liabilities (4.857 ) (10.950 ) (25.258 ) (29.156 )
Total adjustments (76.878 ) 35.474 11.814 90.096
Net cash provided by operating activities 14.751 8.318 31.815 36.678
Cash flow from investing activities:
Proceeds from sales of assets 0.477 0.232 3.285 4.817
Payments for purchases of assets (3.135 ) (4.029 ) (8.660 ) (14.884 )
Sale of share of subsidiaries 4.062
Paid to minority partners (3.084 ) (3.084 )
Net cash used in investment activities (5.742 ) (3.797 ) (8.459 ) (6.005 )
Cash flow provided by financing activities:
Short-term borrowings (net) (6.667 ) 0.536
Sale (repurchase) of accounts receivable (net) (0.343 ) (2.603 ) (11.902 ) (7.053 )
Repayment of long-term debt (41.667 ) (23.791 ) (104.227 ) (54.721 )
Proceeds from issuance of long-term debt 6.568 49.031 11.168 50.591
Acquisition of treasury shares, net (0.013 )
Net cash (used in) provided by financing activities (35.442 ) 15.970 (104.961 ) (10.660 )
Exchange losses on cash (7.668 ) 1.770 (3.679 ) 3.051
Net (decrease) increase in cash (34.101 ) 22.261 (85.284 ) 23.064
Cash at beginning of period 91.136 85.047 142.319 84.244
Cash at end of period 57.035 107.308 57.035 107.308

*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