SOURCE: Grupo TMM

Grupo TMM

October 25, 2012 16:05 ET

Grupo TMM Reports Third-Quarter 2012 Financial Results

Fleet's Utilization at 89% in 2012 Third Quarter; Free Cash Flow Positive in 2012 Third Quarter

MEXICO CITY--(Marketwire - Oct 25, 2012) - Grupo TMM, S.A.B. (OTC: GTMAY) (BMV: TMM A) ("TMM" or the "Company"), a Mexican intermodal transportation and logistics Company, reported today its financial results for the third quarter of 2012.

MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "In the 2012 third quarter we secured three new vessel contracts, which are worth a total of $30 million in revenue. These new contracts demonstrate the resilient nature of the Company's Maritime division, despite the global downturn in this industry. To date, the Maritime division's backlog is $175.6 million."

"While 2012 third-quarter consolidated revenue decreased compared to the 2011 period, primarily as a result of lower tariffs and lower utilization at the product tanker segment and reduced operations at Acapulco, our Maritime division continues to generate important EBITDA margins."

Serrano concluded, "We believe the future holds profitable opportunities for Grupo TMM. Although it has taken longer than anticipated, we expect to reach an agreement for the financing of the development of a container terminal at Tuxpan before year end. Additionally, we are working on a potential joint venture with an international shipyard, which would provide the necessary capabilities to build vessels at our own shipyard. These additional capabilities would position TMM in a new niche market of building vessels, for the Company or for third parties. Both of these projects will significantly grow our revenue and profit base in the longer term."

THIRD-QUARTER AND FIRST-NINE MONTHS 2012 OPERATING AND FINANCIAL RESULTS
Compared to the same periods of last year, consolidated revenue in the 2012 third quarter and first nine months decreased 3.0 percent and 6.8 percent, respectively.

Third-quarter 2012 consolidated operating profit was $11.1 million, increasing 85.0 percent compared to $6.0 million recorded in the third quarter of 2011. First nine-month 2012 consolidated operating profit was $17.1 million, declining 22.6 percent from $22.1 million in the same period of 2011.

Consolidated EBITDA in the 2012 current quarter was $23.7 million, improving 26.1 percent compared to $18.8 million in the same period of last year. In the 2012 first nine months, consolidated EBITDA was $55.2 million, falling 10.2 percent compared to $61.5 million in the same period of 2011.

Interest expense in the 2012 third quarter and first nine months was $15.7 million and $46.9 million, respectively. EBITDA minus interest expense resulted in free cash flow of $8.0 million in the 2012 third quarter.

Maritime revenue increased 0.4 percent in the 2012 third quarter compared to the same period last year, due to improvements at all segments except for product tankers, which was impacted by one unemployed vessel for half of the 2012 third quarter, by lower average daily tariffs compared to the third quarter of last year, and by two less vessels in operation, which had been leased in the 2011 third quarter.

Maritime revenue decreased 1.4 percent in the 2012 first nine months compared to the same period of last year, mainly driven by revenue losses at product and chemical tankers. Product tankers revenue decreased due to having certain vessels without contract or in maintenance, and to lower average daily tariffs; chemical tanker revenue declined as this business segment operated two tankers in the 2012 January to August period versus three tankers in the first half of 2011. These losses were partially offset by revenue improvements at offshore and harbor tugs and by $3.2 million of revenue from the Company's shipyard.

Maritime operating profit increased 2.8 percent in the 2012 third quarter compared to the same period of last year as a result of profit improvements at offshore and lower costs at harbor tugs compared to the 2011 third quarter, during which an additional vessel was leased to substitute two of the fleet's tugboats while in dry dock. The operating profit increase in the 2012 third quarter was partially offset by an operating loss at product tankers and by higher costs at chemical tankers due to the addition of a leased vessel in September, to substitute one of the fleet's tankers while in dry dock.

Maritime operating profit decreased 7.3 percent in the 2012 nine months compared to the same period of last year, mainly due to a $3.9 million operating loss at product tankers as a result of having certain vessels without contract in the 2012 nine-month period. This loss was partially offset by a 3.4 percent operating profit improvement at offshore due to higher revenue and to a large profit improvement at chemical tankers, from $0.3 million to $1.3 million, due to service efficiencies, which lowered this business segment's costs. Additionally, the Company's shipyard contributed $1.1 million of operating profit in the 2012 first nine months.

Maritime's EBITDA for the 2012 third quarter was $21.1 million, unchanged from the 2011 third quarter. In the 2012 first nine months, Maritime's EBITDA fell 4.9 percent, or $3.0 million, to $58.1 million compared to $61.1 million in the 2011 first nine months.

Ports and Terminals revenue grew 1.5 percent in the 2012 third quarter but declined 8.7 percent in the 2012 first nine months compared to the respective periods in 2011. Both reported periods were negatively impacted by revenue losses at Acapulco, due to a sustained reduction of ship calls at this Port, and to lower volumes at shipping agencies. These losses were partially offset by improved revenue at the automotive segment due to higher volumes and rates compared to both reported 2011 periods.

Ports and Terminals operating profit increased 10.0 percent in the 2012 third quarter compared to the 2011 third quarter, led by improvements at automotive and maintenance and repair. In the 2012 first nine months, Ports and Terminals operating profit declined 37.2 percent compared to the same period of last year, driven by profit reductions of approximately $2.7 million from decreased operations at Acapulco and by lower profit at shipping agencies over the 2011 comparable period. These decreases were partially offset by profit improvements at the automotive segment and to cost efficiencies at maintenance and repair in both 2012 reported periods compared to the respective 2011 periods.

Logistics revenue decreased 13.7 percent and 18.4 percent in the 2012 third quarter and first nine months, respectively, compared to the same periods of last year. Operating losses in the 2012 reported periods were partially offset by profit improvements at trucking due to cost efficiencies. Additionally, the division's warehouse business continues to make important progress.

DEBT
As of September 30, 2012, TMM's total net debt was $760.0 million. The book value of the Company's Trust Certificates debt increased $62.9 million from December 31, 2011, as a result of a 7.7 percent appreciation of the peso against the dollar in the first nine months of 2012. Of TMM's total debt, only $17.1 million, or 2.1 percent, is short term.

 
Total Debt*
Million of U.S. Dollars
    As of 12/31/11   As of 9/30/12
Mexican Trust Certificates (1)   $ 684.3   $ 754.2
Other Corporate Debt     68.2     78.5
Total Debt   $ 752.5   $ 832.7
Cash     77.1     72.7
Net Debt   $ 675.4   $ 760.0
             
*Book Value
(1) 20-year term, non recourse to the Company and rated "AA" by HR Ratings de México
Exchange Rate: 13.95 pesos/dollar at December 31, 2011 and 12.87 pesos/dollar at September 30, 2012
 

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.

   
Grupo TMM, S.A.B. and subsidiaries  
Balance Sheet*  
- millions of dollars -  
   
    September 30,     December 31,  
    2012     2011  
             
Current assets:            
Cash and cash equivalents   72.682     77.123  
Accounts receivable            
  Accounts receivable - Net   46.947     38.963  
  Other accounts receivable   16.823     17.556  
  Prepaid expenses and others current assets   11.367     11.568  
Total current assets   147.819     145.210  
Property, machinery and equipment   943.573     914.809  
Cumulative Depreciation   (230.476 )   (203.985 )
Property, machinery and equipment - Net   713.097     710.824  
Other assets   35.844     28.447  
Deferred taxes   67.603     67.583  
Total assets   964.363     952.064  
             
Current liabilities:            
  Bank loans and current maturities of long-term liabilities   17.097     17.190  
  Suppliers   23.272     21.475  
  Other accounts payable and accrued expenses   79.316     53.848  
Total current liabilities   119.685     92.513  
Long-term liabilities:            
  Bank loans   65.251     59.378  
  Trust certificates debt   750.354     675.933  
  Other long-term liabilities   17.339     15.828  
             
Total long-term liabilities   832.944     751.139  
Total liabilities   952.629     843.652  
             
Stockholders´ equity            
  Common stock   155.577     155.577  
  Retained earnings   (181.145 )   (75.096 )
  Revaluation surplus   63.907     63.907  
  Initial accumulated translation loss   (17.757 )   (17.757 )
  Cumulative translation adjusted   (12.905 )   (22.111 )
      7.677     104.520  
  Minority interest   4.057     3.892  
Total stockholders´ equity   11.734     108.412  
             
Total liabilities and stockholders´ equity   964.363     952.064  
 
*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,  
    2012     2011     2012     2011  
                         
  Ports and Terminals   6.883     6.791     18.931     20.740  
  Maritime   44.693     44.551     125.977     127.776  
  Logistics   15.109     17.497     45.594     55.886  
Revenue from freight and services   66.685     68.839     190.502     204.402  
                         
  Ports and Terminals   (5.336 )   (5.536 )   (15.177 )   (15.543 )
  Maritime   (23.568 )   (23.562 )   (67.830 )   (66.640 )
  Logistics   (15.286 )   (18.054 )   (47.739 )   (56.450 )
Cost of freight and services   (44.190 )   (47.152 )   (130.746 )   (138.633 )
                         
  Ports and Terminals   (0.443 )   (0.296 )   (1.001 )   (0.912 )
  Maritime   (10.241 )   (10.420 )   (30.087 )   (30.863 )
  Logistics   (1.726 )   (1.733 )   (6.281 )   (6.990 )
  Corporate and others   (0.237 )   (0.261 )   (0.690 )   (0.657 )
Depreciation and amortization   (12.647 )   (12.710 )   (38.059 )   (39.422 )
                         
  Corporate expenses   (4.254 )   (4.398 )   (11.753 )   (12.875 )
  Ports and Terminals   1.104     0.959     2.753     4.285  
  Maritime   10.884     10.569     28.060     30.273  
  Logistics   (1.903 )   (2.290 )   (8.426 )   (7.554 )
  Corporate and others   (0.237 )   (0.261 )   (0.690 )   (0.657 )
  Other (expenses) income - Net   5.509     1.473     7.196     8.643  
Operating Income   11.103     6.052     17.140     22.115  
Financial (expenses) income - Net   (17.253 )   (20.284 )   (52.385 )   (63.480 )
Exchange gain (loss) - Net   (32.747 )   109.014     (62.666 )   67.340  
Net financial cost   (50.000 )   88.730     (115.051 )   3.860  
Gain (loss) before taxes   (38.897 )   94.782     (97.911 )   25.975  
Provision for taxes   (0.257 )   (3.153 )   (0.646 )   (5.974 )
                         
Net gain (loss) for the period   (39.154 )   91.629     (98.557 )   20.001  
                         
Attributable to:                        
  Minority interest   0.204     0.036     0.168     0.863  
Equity holders of GTMM, S.A.B.   (39.358 )   91.593     (98.725 )   19.138  
                         
Weighted average outstanding shares (millions)   102.183     102.183     102.183     102.169  
Income (loss) earnings per share (dollars / share)   (0.39 )   0.90     (0.97 )   0.19  
                         
Outstanding shares at end of period (millions)   102.183     102.183     102.183     102.183  
Income (loss) earnings per share (dollars / share)   (0.39 )   0.90     (0.97 )   0.19  
                         
*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,  
    2012     2011     2012     2011  
                         
Cash flow from operation activities:                        
Net gain (loss) for the period   (39.154 )   91.629     (98.557 )   20.001  
Charges (credits) to income not affecting resources:                        
  Depreciation & amortization   14.186     14.591     42.600     46.634  
  Other non-cash items   42.372     (86.612 )   105.445     (9.562 )
Total non-cash items   56.558     (72.021 )   148.045     37.072  
  Changes in assets & liabilities   (1.586 )   (4.857 )   (3.846 )   (25.258 )
Total adjustments   54.972     (76.878 )   144.199     11.814  
Net cash provided by operating activities   15.818     14.751     45.642     31.815  
                         
Cash flow from investing activities:                        
  Proceeds from sales of assets   1.081     0.477     2.594     3.285  
  Payments for purchases of assets   (12.574 )   (3.135 )   (14.196 )   (8.660 )
  Acquisition of share of subsidiaries               (4.175 )      
  Paid to minority partners         (3.084 )         (3.084 )
Net cash used in investment activities   (11.493 )   (5.742 )   (15.777 )   (8.459 )
                         
Cash flow provided by financing activities:                        
  Short-term borrowings (net)   (0.088 )         0.268        
  Sale (repurchase) of accounts receivable (net)         (0.343 )         (11.902 )
  Repayment of long-term debt   (16.533 )   (41.667 )   (56.216 )   (104.227 )
  Proceeds from issuance of long-term debt   12.604     6.568     15.443     11.168  
Net cash used in financing activities   (4.017 )   (35.442 )   (40.505 )   (104.961 )
Exchange losses on cash   2.317     (7.668 )   6.199     (3.679 )
  Net (decrease) increase in cash   2.625     (34.101 )   (4.441 )   (85.284 )
  Cash at beginning of period   70.057     91.136     77.123     142.319  
  Cash at end of period   72.682     57.035     72.682     57.035  
 
*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