MEXICO CITY--(Marketwire - July 28, 2009) - Grupo TMM, S.A.B. (
MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "Our results in the first six months of 2009 demonstrate the resilience and long-term viability of our Maritime assets and reaffirm the long-term strength of our Company. Despite weak global economic conditions, maritime revenues improved through the first six months of 2009. Our unique market position should provide us the opportunity to grow once the global economy stabilizes and markets return to a period of steady growth.
"Despite the strength of TMM's Maritime assets and operations, weak economic conditions in Mexico negatively impacted other operations in the first half of this year. Leading financial institutions consider the second quarter of 2009 as the worst quarter for the Mexican economy since 1995. Unemployment hit a high of 6.8 percent in May; annualized inflation was 5.7 percent in June; total production of automobiles decreased 42.9 percent in the first six months of the year; Mexico's trade balance deficit was negative by $1.2 billion in the first six months of the year; and Federal fiscal revenue decreased 26.4 percent in May. Additionally, the swine flu outbreak paralyzed the Mexican economy at the end of April and the beginning of May, impacting GDP growth for the quarter. The Central Bank of Mexico is expecting GDP to decrease approximately 6 percent in 2009."
Serrano continued, "Consolidated revenues decreased 19.5 percent and 13.4 percent in the second quarter and first six months of 2009, respectively, compared to the same periods last year. The revenue decrease at Logistics was due mainly to the depreciation of the peso versus the dollar in the first six months of 2009 compared to the same period last year. Additionally this division experienced reduced volumes as a result of lower demand for consumer goods, retail and auto parts.
"The revenue decrease at Logistics was partially offset by improved Maritime revenues, specifically at the offshore segment, where revenues increased 47 percent in the second quarter and 40 percent in the first six months of 2009 when compared to the same periods of last year, mainly attributable to four more vessels in operation in the second quarter and to higher average daily rates in the first six months of 2009 than in the comparable periods in 2008.
"Notwithstanding the above mentioned revenue decreases, operating profit in the second quarter and first six months of 2009 remained fairly stable compared to the same periods last year, decreasing $0.4 million in the second quarter and $0.9 million in first six months of 2009. This is primarily due to decreased costs and expenses and to an improved profit at Maritime in the second quarter and first six months of 2009 compared to the same periods in 2008.
"The organizational restructuring the Company implemented during the second half of 2008 produced solid cost improvements in the first six months of 2009, as costs and operating expenses decreased 20.1 percent, or $29.8 million, and as corporate expenses decreased 14.7 percent, or $1.3 million, compared to the same periods of last year. EBITDA improved 20.9 percent to $35.3 million in the first six months of 2009 compared to $29.2 million in the 2008 period."
Serrano added, "As an aid to stimulate the Mexican economy, the Central Bank of Mexico cut interest rates in the first half of 2009, which will benefit the debt service of our Trust Certificates Program going forward. This debt is tied to the 28-day TIIE, or Mexico's Interbank Equilibrium Interest Rate, which was reduced 207 basis points from 7.15 percent to 5.08 percent in the second quarter of this year. These rate reductions will represent a significant decrease in the interest cost of this debt.
"We have set our business goals for 2009 in the context of a slowing economy, and we believe the Company is well positioned to withstand a decline in the overall maritime transportation market for three primary reasons. First, we have major competitive advantages due to our modern, first-class offshore and product tanker fleet. Second, the Mexican Navigation Law favors Mexican owned and flagged vessels. Finally, the vast majority of our maritime business is based on medium- and long-term contracts.
"Our Maritime division's growth has been driven mainly by improvements in our offshore vessels operating metrics and by continuing to realize the benefits of the capital investments we have made to increase the operating technology of our fleet. Additionally, we have enhanced our vessel utilization, stemming from our ability to capitalize on greater scheduling flexibility. We have also renewed existing contracts and entered into new ones for 2009 and beyond, all at rates consistent with our expectations."
Serrano concluded, "During this challenging period, we continue to focus on cost control and strong operational performance, as we seek opportunities to lock in medium- and long-term contracts for our vessels. We are confident that our operations for the third and fourth quarters will trend favorably, as we continue to increase our revenue base with new contracts, and as we succeed in restructuring our corporate debt and in selling non-productive and non-strategic assets."
CONFERENCE CALL
TMM's management will host a conference call and Webcast to review financial and operational highlights on Wednesday, July 29 at 11:00 a.m. Eastern time. To participate in the conference call, please dial (877) 879-6201 (domestic) or (719) 325-4768 (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=59895.
A replay of the conference call will be available through August 12 at 11:59 p.m. Eastern time, by dialing (888) 203-1112 or (719) 457-0820, and entering passcode 8618439. On the Internet a replay will be available for 30 days at http://www.visualwebcaster.com/event.asp?id=59895.
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 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.
Financial tables follow...
Grupo TMM, S.A.B. and subsidiaries
Balance Sheet*
- millions of dollars -
June 30, December 31,
2009 2008
----------- -----------
Current assets:
Cash and cash equivalents 108.155 168.447
----------- -----------
Accounts receivable
Accounts receivable - Net 55.909 56.548
----------- -----------
Other accounts receivable 36.018 23.750
----------- -----------
Prepaid expenses and others current assets 10.015 11.653
----------- -----------
Total current assets 210.097 260.398
=========== ===========
Property, machinery and equipment 834.028 806.911
----------- -----------
Cumulative Depreciation (131.585) (124.396)
----------- -----------
Property, machinery and equipment - Net 702.443 682.515
=========== ===========
Other assets 51.108 47.821
----------- -----------
Deferred taxes 97.276 97.276
----------- -----------
Total assets 1,060.924 1,088.010
----------- -----------
Current liabilities:
Bank loans and current maturities of long-term
liabilities 13.379 21.063
----------- -----------
Sale of accounts receivable 15.783 14.976
----------- -----------
Suppliers 25.184 33.039
----------- -----------
Other accounts payable and accrued expenses 47.107 38.827
----------- -----------
Total current liabilities 101.453 107.905
=========== ===========
Long-term liabilities:
Bank loans 60.355 64.795
----------- -----------
Trust certificates debt 664.296 615.609
----------- -----------
Sale of accounts receivable 93.784 101.035
----------- -----------
Other long-term liabilities 28.172 27.483
----------- -----------
Total long-term liabilities 846.607 808.922
=========== ===========
Total liabilities 948.060 916.827
----------- -----------
Stockholders' equity
Common stock 114.058 114.058
----------- -----------
Retained earnings 20.503 82.117
----------- -----------
Initial accumulated translation loss (17.757) (17.757)
----------- -----------
Cumulative translation adjusted (10.045) (13.312)
----------- -----------
106.759 165.106
----------- -----------
Minority interest 6.105 6.077
----------- -----------
Total stockholders' equity 112.864 171.183
----------- -----------
Total liabilities and stockholders' equity 1,060.924 1,088.010
----------- -----------
*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 Operations*
- millions of dollars -
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Ports 0.961 1.804 2.848 4.235
Maritime 47.687 50.132 102.137 99.085
Logistics 23.836 36.704 45.717 69.371
Corporate and others 2.146 4.025 4.009 5.987
Eliminations (0.084) (0.105) (0.200) (0.201)
-------- -------- -------- --------
Revenue from freight and services 74.546 92.560 154.511 178.477
-------- -------- -------- --------
Ports (1.038) (1.417) (2.202) (2.973)
Maritime (26.611) (36.776) (62.908) (68.786)
Logistics (25.427) (37.055) (48.624) (70.576)
Corporate and others (2.584) (4.049) (4.751) (5.913)
Eliminations 0.084 0.105 0.200 0.201
-------- -------- -------- --------
Cost of freight and services (55.576) (79.192) (118.285) (148.047)
-------- -------- -------- --------
Ports (0.207) (0.221) (0.389) (0.437)
Maritime (6.821) (3.875) (13.646) (7.500)
Logistics (1.635) (1.142) (2.581) (2.361)
Corporate and others (0.005) (0.012) (0.009) (0.014)
-------- -------- -------- --------
Depreciation of vessels and
equipment (8.668) (5.250) (16.625) (10.312)
-------- -------- -------- --------
Corporate expenses (3.787) (3.983) (7.324) (8.589)
Ports (0.284) 0.166 0.257 0.825
Maritime 14.255 9.481 25.583 22.799
Logistics (3.226) (1.493) (5.488) (3.566)
Corporate and others (0.443) (0.036) (0.751) 0.060
Other (expenses) income - Net (0.652) 1.283 (1.235) 0.384
-------- -------- -------- --------
Operating Income 5.863 5.418 11.042 11.913
======== ======== ======== ========
Financial (expenses) income - Net (24.266) (10.174) (46.830) (24.686)
-------- -------- -------- --------
Exchange gain (loss) - Net (47.466) (8.498) (25.401) (10.388)
-------- -------- -------- --------
Net financial cost (71.732) (18.672) (72.231) (35.074)
-------- -------- -------- --------
Gain (loss) before taxes (65.869) (13.254) (61.189) (23.161)
======== ======== ======== ========
Benefit (provision) for taxes (0.557) (1.460) (0.402) (1.460)
-------- -------- -------- --------
Net income (loss) for the period (66.426) (14.714) (61.591) (24.621)
-------- -------- -------- --------
Attributable to:
Minority interest (0.080) 0.192 0.022 0.564
-------- -------- -------- --------
Equity holders of GTMM, S.A.B. (66.346) (14.906) (61.613) (25.185)
-------- -------- -------- --------
Weighted average outstanding shares
(millions) 55.227 56.704 55.227 56.802
Income (loss) earnings per share
(dollars / share) (1.20) (0.26) (1.12) (0.44)
Outstanding shares at end of period
(millions) 55.227 56.385 55.227 56.385
Income (loss) earnings per share
(dollars / share) (1.20) (0.26) (1.12) (0.45)
-------- -------- -------- --------
*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,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Cash flow from operation
activities:
Net Income (loss) before
discontinuing operations (66.426) (14.714) (61.591) (24.621)
-------- -------- -------- --------
Charges (credits) to income not
affecting resources:
Depreciation & amortization 12.427 8.469 24.262 17.235
-------- -------- -------- --------
Other non-cash items 63.397 27.615 65.135 44.991
-------- -------- -------- --------
Total non-cash items 75.824 36.084 89.397 62.226
-------- -------- -------- --------
Changes in assets &
liabilities (15.681) (27.328) (12.923) (27.984)
-------- -------- -------- --------
Total adjustments 60.143 8.756 76.474 34.242
-------- -------- -------- --------
Net cash (used in) provided by
operating activities (6.283) (5.958) 14.883 9.621
======== ======== ======== ========
Cash flow from investing
activities:
Proceeds from sales of assets 6.141 0.481 7.452 0.519
-------- -------- -------- --------
Payments for purchases of assets (11.719) (47.611) (38.743) (102.001)
-------- -------- -------- --------
Common stock decrease of
subsidiaries (0.490)
-------- -------- -------- --------
Dividends from non-consolidated
subsidiaries 0.643 0.643
-------- -------- -------- --------
Net cash used in investment
activities (4.935) (47.130) (30.648) (101.972)
======== ======== ======== ========
Cash flow provided by financing
activities:
Short-term borrowings (net) (0.512) (0.217) (0.939) 2.526
-------- -------- -------- --------
Sale (repurchase) of accounts
receivable (net) (7.221) (7.241) (14.445) (14.537)
-------- -------- -------- --------
Repayment of long-term debt (24.564) (52.119) (33.190) (56.863)
-------- -------- -------- --------
Proceeds from issuance of
long-term debt 149.161 202.411
-------- -------- -------- --------
Acquisition of treasury shares,
net (0.746) (0.841)
-------- -------- -------- --------
Net cash (used in) provided by
financing activities (32.297) 88.838 (48.574) 132.696
======== ======== ======== ========
Exchange losses on cash 9.553 4.047
======== ======== ======== ========
Net (decrease) increase in cash (33.962) 35.750 (60.292) 40.345
-------- -------- -------- --------
Cash at beginning of period 142.117 56.830 168.447 52.235
-------- -------- -------- --------
Cash at end of period 108.155 92.580 108.155 92.580
-------- -------- -------- --------
*Prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Contact Information: TMM COMPANY CONTACT: Jacinto Marina Chief Financial Officer 011-525-55-629-8866 ext. 2901 Monica Azar Investor Relations 917-597-5361 or 011-525-55-629-8866 ext. 3421 AT DRESNER CORPORATE SERVICES: Kristine Walczak (investors, analysts, media) 312-726-3600