-- Revenue of $59.1 million, down 24.3 percent from $78.1 million
-- Operating income of $3.5 million, up $2.4 million from $1.1 million
-- Operating margin of 6.0 percent, up 4.6 percentage points
-- Net loss of $8.0 million compared to net income of $4.1 million
Comparing the first nine months of 2006 with the first nine months of 2005,
TMM reported the following results:
-- Revenue of $182.7 million, down 16.3 percent from $218.3 million
-- Operating income of $8.4 million, up $6.1 million from $2.3 million
-- Operating margin of 4.6 percent, up 3.5 percentage points
-- Net income of $63.5 million compared to net income of $148.2 million
Revenues in the third quarter and first nine months of 2006 compared to the
same periods of 2005 were impacted by the sale of TMM's port assets in
Colombia, amounting to $5.4 million in the third quarter and to $16.3
million in the nine months of 2006. Revenues were also impacted by the
cancellation of service agreements with Kansas City Southern de Mexico,
reflecting $11.0 million in the third quarter of 2006 and $20.0 million in
the nine months of 2006. In the fourth quarter of 2006, the Company
anticipates that the sale of its Colombian port assets will impact revenues
$3.2 million and the cancellation of the service agreements with Kansas
City Southern de Mexico by $9.0 million.
Third-quarter 2006 net interest expense was $7.2 million compared to $15.8
million in the same period of 2005. Net financial cost in third quarter
2006 was $11.4 million, including $5.6 million of amortization of expenses
associated with the Company's redemption of its 2007 Notes. Net financial
cost in third quarter 2005 was $18.9 million, including $3.0 million of
amortization of expenses associated with the Company's debt.
Nine-month 2006 net interest expense was $20.8 million compared to $58.1
million in the same period of 2005. Net financial cost in the 2006
nine-month period was $45.7 million, including $24.0 million of
amortization of expenses associated with the Company's redemption of its
2007 Notes. Net financial cost in the 2005 nine-month period was $71.5
million, including $13.6 million of amortization of expenses associated
with the Company's debt.
SG&A of $7.6 million in third quarter 2006 decreased 9.0 percent over the
same period of 2005. Nine-month 2006 SG&A increased 7.7 percent to $24.9
million over the same period of 2005. The increase in the 2006 nine-month
period was primarily attributable to $0.9 million of expenses related to
the migration of the Company's technology systems and hosting supplier and
$0.4 million in employee bonuses paid in the second quarter of this year.
As of September 30, 2006, TMM's total outstanding debt was $377.2 million,
of which $202.9 million is related to the Company's corporate debt and is
supported by $177.9 million in a combination of cash, marketable securities
and receivables from Kansas City Southern. Project finance debt of $174.3
million related to the acquisition of maritime assets is supported by
$128.0 million of long-term contracted revenues, by the Mexican Maritime
Law and by the total market value of these assets, which is estimated to be
$233.0 million.
Total Debt Composition as of September 30, 2006
(Millions of dollars)
Total Debt Composition as of September 30, 2006
(Millions of dollars)
------------------------------------------------
Securitization Facility $200.0
2006 Notes $2.9
*Two Product Tankers $58.7
*Offshore Vessels $115.6
------------------------------------------------
Total Debt (1): $377.2
------------------------------------------------
Cash + Marketable Securities $87.4
KCS Receivables $90.5
------
Total Cash + KCS Receivables $177.9
------------------------------------------------
Net Debt: $199.3
------------------------------------------------
*Project finance assets
(1) The Company's total outstanding debt as reflected in its balance sheet
as of September 30, 2006, includes an additional $2.2 million of accrued
unpaid interest and is reduced $8.5 million of related expenses to be
amortized over time.
DIVISIONAL RESULTS (All numbers in thousands)
Third Quarter 2006
--------------------------------------------------------------------------
Maritime Logistics Ports Corporate and Total
Others
--------------------------------------------------------------------------
Revenues 38,158 20,026 1,017 (147) 59,054
--------------------------------------------------------------------------
Costs 27,763 19,200 1,168 (209) 47,922
--------------------------------------------------------------------------
Gross Result 10,395 826 (151) 62 11,132
--------------------------------------------------------------------------
Gross Margin 27.2% 4.1% (14.8%) n.a. 18.9%
--------------------------------------------------------------------------
SG & A 1,293 622 455 5,246 7,616
--------------------------------------------------------------------------
Operating Results 9,102 204 (606) (5,184) 3,516
--------------------------------------------------------------------------
Operating Margin 23.9% 1.0% (59.6%) n.a. 6.0%
--------------------------------------------------------------------------
*Third Quarter 2005
--------------------------------------------------------------------------
Maritime Logistics Ports Corporate and Total
Others
--------------------------------------------------------------------------
Revenues 43,400 26,940 7,859 (126) 78,073
--------------------------------------------------------------------------
Costs 35,646 26,063 7,039 (117) 68,631
--------------------------------------------------------------------------
Gross Result 7,754 877 820 (9) 9,442
--------------------------------------------------------------------------
Gross Margin 17.9% 3.3% 10.4% n.a. 12.1%
--------------------------------------------------------------------------
SG & A 1,156 1,474 1,008 4,722 8,360
--------------------------------------------------------------------------
Operating Results 6,598 (597) (188) (4,731) 1,082
--------------------------------------------------------------------------
Operating Margin 15.2% (2.2%) (2.4%) n.a. 1.4%
--------------------------------------------------------------------------
First Nine Months 2006
--------------------------------------------------------------------------
Maritime Logistics Ports Corporate and Total
Others
--------------------------------------------------------------------------
Revenues 106,292 71,792 4,850 (223) 182,711
--------------------------------------------------------------------------
Costs 79,860 66,273 3,538 (320) 149,351
--------------------------------------------------------------------------
Gross Result 26,432 5,519 1,312 97 33,360
--------------------------------------------------------------------------
Gross Margin 24.9% 7.7% 27.1% n.a. 18.3%
--------------------------------------------------------------------------
SG & A 3,887 4,055 1,237 15,764 24,943
--------------------------------------------------------------------------
Operating Results 22,545 1,464 75 (15,667) 8,417
--------------------------------------------------------------------------
Operating Margin 21.2% 2.0% 1.5% n.a. 4.6%
--------------------------------------------------------------------------
*First Nine Months 2005
--------------------------------------------------------------------------
Maritime Logistics Ports Corporate and Total
Others
--------------------------------------------------------------------------
Revenues 116,032 77,102 25,355 (199) 218,290
--------------------------------------------------------------------------
Costs 98,479 73,151 21,417 (206) 192,841
--------------------------------------------------------------------------
Gross Result 17,553 3,951 3,938 7 25,449
--------------------------------------------------------------------------
Gross Margin 15.1% 5.1% 15.5% n.a. 11.7%
--------------------------------------------------------------------------
SG & A 3,157 3,960 3,120 12,892 23,129
--------------------------------------------------------------------------
Operating Results 14,396 (9) 818 (12,885) 2,320
--------------------------------------------------------------------------
Operating Margin 12.4% 0.0% 3.2% n.a. 1.1%
--------------------------------------------------------------------------
*2005 results presented under continuing operations
SEGMENT RESULTS
Maritime
Comparing the third quarter and first nine months of 2006 with the same
periods of last year:
-- Revenues decreased 12.1 percent in the 2006 third quarter and 8.4
percent in the 2006 nine-month period due mainly to fewer offshore and
tanker vessels in operation
-- Revenues were also impacted $0.7 million from atypical dry-docking
activity in the 2006 third quarter and $3.2 million in the 2006 nine-month
period
-- Improved operating profit and margins at all business segments due to
cost reductions of 22.1 percent in the 2006 third quarter, and of 18.9
percent in the 2006 nine-month period as a result of increased owned
vessels
Logistics
Comparing the third quarter and first nine months of 2006 with the same
periods of last year:
-- Overall revenues reflected a decline in both periods due to Kansas
City Southern de Mexico contract losses
-- In the 2006 third quarter, trucking revenues increased 18.8 percent to
$8.5 million and 36.0 percent to $25.9 million in the 2006 nine-month
period due to 106 new tractors acquired throughout this year
-- In the 2006 third quarter, inbound logistics revenues increased 22.7
percent to $5.1 million and 34.1 percent to $15.7 million in the 2006 nine-
month period due mainly to increased volumes at Volkswagen
-- Improved operating profit due to costs reductions of 26.3 percent in
the third quarter and 9.4 percent in the nine-month period mainly due to
the elimination of unprofitable operations and activities
Ports and Terminals
Comparing the third quarter and first nine months of 2006 with the same
periods of last year:
-- Revenues were impacted by the sale of port assets in Colombia and by a
reclassification of net revenue at the shipping agencies business segment
-- Revenues at Acapulco decreased $0.4 million to $3.3 million in the
2006 nine-month period due to a $0.8 million revenue decrease in the cruise
ship business segment as a result of reduced calls at this port
-- Auto handling revenues improved $0.4 million in the 2006 nine-month
period as export volumes to South America and Japan increased from 15,758
automobiles to 26,874
Headquartered in Mexico City, TMM is a Latin American multimodal
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.
CONFERENCE CALL
TMM's management will host a conference call and Webcast to review
financial and operational highlights on Friday, October 27 at 11:00 a.m.
Eastern Time.
To participate in the conference call, please dial 888-694-4728 (domestic)
or 973-582-2745 (international) and provide conference ID 7917967 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=35838. A replay of the
conference call will be available through November 3, at 11:59 p.m. Eastern
Time, by dialing 877-519-4471or 973-341-3080, and entering conference ID
7917967.On the Internet a replay will be available for 30 days at
http://www.visualwebcaster.com/event.asp?id=35838.
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. and subsidiaries
* Balance Sheet (under discontinuing operations)
- millions of dollars -
September 30, December 31,
2006 2005
============ ============
Current assets:
Cash and cash equivalents 46.539 400.809
------------ ------------
Marketable securities 40.814
------------ ------------
87.353 400.809
------------ ------------
Accounts receivable
Accounts receivable - Net 36.271 43.267
------------ ------------
Other accounts receivable 24.877 19.615
------------ ------------
Prepaid expenses and others current assets 10.423 7.295
------------ ------------
Total current assets 158.924 470.986
============ ============
Long -term account receivable 90.525 48.763
============ ============
Property, machinery and equipment - Net 268.188 166.661
============ ============
Other assets 24.859 23.160
============ ============
Deferred taxes 94.136 83.556
============ ============
Total assets 636.632 793.126
============ ============
Current liabilities:
Bank loans and current maturities of long term
liabilities 29.994 35.546
------------ ------------
Sale of accounts receivable 16.224
------------ ------------
Suppliers 17.993 22.755
------------ ------------
Other accounts payable and accrued expenses 35.634 48.845
------------ ------------
Total current liabilities 99.845 107.146
============ ============
Long-term liabilities:
Bank loans and other obligations 148.996 524.763
------------ ------------
Sale of accounts receivable 175.746
------------ ------------
Other long-term liabilities 24.122 24.471
------------ ------------
Total long-term liabilities 348.864 549.234
============ ============
Total liabilities 448.709 656.380
============ ============
Stockholders´ equity
Common stock 121.158 121.158
------------ ------------
Retained earnings 78.000 14.454
------------ ------------
Initial accumulated translation loss (17.757) (17.757)
------------ ------------
Cumulative translation adjusted (2.710) 1.422
============ ============
178.691 119.277
------------ ------------
Minority interest 9.232 17.469
------------ ------------
Total stockholder’s equity 187.923 136.746
------------ ------------
Total liabilities and stockholders´ equity 636.632 793.126
============ ============
* Prepared in accordance with International Financial Reporting Standards.
Note: In accordance with International Financial Reporting Standards (IFRS)
number 5 "Non-current assets held for sale and discontinued operations" and
International Accounting Standards (IAS) number 21 (reviewed) "The effects
of changes in foreign exchange rates"; Grupo TMM, S. A. shows the effect of
the applications of its Financial Statements.
Grupo TMM, S.A. and subsidiaries
* Statement of Income (under discontinuing operations)
- millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
======== ======== ======== ========
Revenue from freight and services 59.054 78.073 182.711 218.290
-------- -------- -------- --------
Cost of freight and services (44.354) (66.083) (139.436) (187.610)
-------- -------- -------- --------
Depreciation of vessels and
operating equipment (3.568) (2.548) (9.915) (5.231)
-------- -------- -------- --------
11.132 9.442 33.360 25.449
-------- -------- -------- --------
Administrative expenses (7.616) (8.360) (24.943) (23.129)
-------- -------- -------- --------
Operating Income 3.516 1.082 8.417 2.320
======== ======== ======== ========
Other income (expenses) - Net 0.091 9.170 (0.370) 8.544
-------- -------- -------- --------
Financial (expenses) income - Net (7.237) (15.777) (20.842) (58.058)
-------- -------- -------- --------
Amortization of expenses related to
debt (5.652) (2.966) (24.003) (13.611)
-------- -------- -------- --------
Exchange gain (loss) - Net 1.513 (0.157) (0.843) 0.138
-------- -------- -------- --------
Net financial cost (11.376) (18.900) (45.688) (71.531)
-------- -------- -------- --------
Loss before taxes and profit
sharing (7.769) (8.648) (37.641) (60.667)
======== ======== ======== ========
Benefit (provision) for taxes and
profit sharing 0.847 (1.731) 3.646 6.571
-------- -------- -------- --------
Net loss before discontinuing
operations (6.922) (10.379) (33.995) (54.096)
======== ======== ======== ========
Income from discontinuing
operations 1.364
-------- -------- -------- --------
(Loss) income from disposal
discontinuing business (0.781) 15.618 98.610 203.622
-------- -------- -------- --------
Net (loss) income for the period (7.703) 5.239 64.615 150.890
======== ======== ======== ========
Attributable to:
Minority interest 0.295 1.095 1.068 2.701
-------- -------- -------- --------
Equity holders of GTMM, S.A. (7.998) 4.144 63.547 148.189
======== ======== ======== ========
Weighted average outstanding shares
(millions) 56.963 56.963 56.963 56.963
(Loss) income earnings per share
(dollars / share) (0.14) 0.07 1.12 2.60
Outstanding shares at end of period
(millions) 56.963 56.963 56.963 56.963
(Loss) income earnings per share
(dollars / share) (0.14) 0.07 1.12 2.60
======== ======== ======== ========
* Prepared in accordance with International Financial Reporting Standards.
Note: In accordance with International Financial Reporting Standards (IFRS)
number 5 "Non-current assets held for sale and discontinued operations" and
International Accounting Standards (IAS) number 21 (reviewed) "The effects
of changes in foreign exchange rates"; Grupo TMM, S. A. shows the effect of
the applications of its Financial Statements
Grupo TMM, S.A. and subsidiaries
* Statement of Cash Flow (under discontinuing operations)
- millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
======== ======== ======== ========
Cash flow from operation activities:
Net loss before discontinuing
operations (6.922) (10.379) (33.995) (54.096)
-------- -------- -------- --------
Charges (credits) to income not
affecting resources:
Depreciation & amortization 5.097 7.520 16.274 21.115
-------- -------- -------- --------
Deferred income taxes (1.770) (0.038) (5.171) (9.685)
-------- -------- -------- --------
Income from discontinued
operation 3.139 71.854
-------- -------- -------- --------
Other non-cash items (0.726) (14.547) 16.441 (13.642)
-------- -------- -------- --------
Total non-cash items 5.740 (7.065) 99.398 (2.212)
-------- -------- -------- --------
Changes in assets &
liabilities 0.525 (16.490) (37.743) 14.246
-------- -------- -------- --------
Total adjustments 6.265 (23.555) 61.655 12.034
-------- -------- -------- --------
Net cash provided (used in) by
operating activities (0.657) (33.934) 27.660 (42.062)
======== ======== ======== ========
Cash flow from investing
activities:
Proceeds from sales of assets
(net) 0.188 0.539 9.089 1.760
-------- -------- -------- --------
Payments for purchases of assets (38.543) (78.798) (135.298) (91.005)
-------- -------- -------- --------
Acquisition of shares of
subsidiaries (0.392) (19.462) (34.059)
-------- -------- -------- --------
Sale of share of subsidiaries 18.876 210.680
-------- -------- -------- --------
Dividends paid to minority
partners (1.680)
-------- -------- -------- --------
Net cash (used in) provided by
investment activities (38.747) (59.383) (147.351) 87.376
======== ======== ======== ========
Cash flow provided by financing
activities:
Short-term borrowings (net) (0.150) (0.150) (0.450)
-------- -------- -------- --------
Principal payments under capital
lease obligations (0.126) (0.151)
-------- -------- -------- --------
Sale (repurchase) of accounts
receivable (net) 191.624 191.624 (74.972)
-------- -------- -------- --------
Repayment of long-term debt (166.610) (0.616) (507.042) (69.474)
-------- -------- -------- --------
Proceeds from issuance of
long-term debt 30.340 69.645 121.803 72.970
-------- -------- -------- --------
Net cash provided (used in) by
financing activities 55.354 68.753 (193.765) (72.077)
======== ======== ======== ========
Net increase (decrease) in cash 15.950 (24.564) (313.456) (26.763)
-------- -------- -------- --------
Cash at beginning of period 71.403 50.949 400.809 53.148
-------- -------- -------- --------
Cash at end of period 87.353 26.385 87.353 26.385
======== ======== ======== ========
*Prepared in accordance with International Financial Reporting Standards.
Note: In accordance with International Financial Reporting Standards (IFRS)
number 5 "Non-current assets held for sale and discontinued operations" and
International Accounting Standards (IAS) number 21 (reviewed) "The effects
of changes in foreign exchange rates"; Grupo TMM, S. A. shows the effect of
the applications of its Financial Statements.
Contact Information: TMM COMPANY CONTACT: Juan Fernandez Chief Financial Officer 011-52-55-5629-8778 (Email Contact) Brad Skinner Senior VP, Investor Relations 011-52-55-5629-8725 203-247-2420 (Email Contact) Monica Azar Manager, Investor Relations 212-659-4975 (Email Contact) AT DRESNER CORPORATE SERVICES: Kristine Walczak (investors, analysts, media) 312-726-3600 (Email Contact)