Grupo TMM Reports First-Quarter 2009 Financial Results

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Apr 2009

Grupo TMM, S.A.B., a Mexican intermodal transportation and logistics company, reported yesterday its financial results for the first quarter of 2009. MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "Our first-quarter results were affected by the worldwide financial crisis and global economic recession. Mexico's economy was acutely affected in the first quarter of 2009. The Mexican automotive industry's total production and exports decreased 40 percent in the first quarter of 2009 compared to the same period of last year. Additionally, in the first quarter of 2009, product tanker rates were lower compared to last year, and transportation services volumes were negatively impacted by lower demand for consumer goods, retail and auto parts.
"While our first-quarter results do not reflect the full potential of TMM's assets, we believe our maritime business continues to be strong as a result of the medium- and long-term contractual nature of the division's revenues.
"In the first quarter of 2009, Maritime revenues increased 11.2 percent compared to the same quarter last year, specifically due to revenue improvements at the offshore and product tanker segments. Demand continued to meet our expectations, as fleet utilization was 100 percent for tankers and 88 percent for offshore vessels, both above the average for the industry. However, operating results at this division were impacted by the addition of new vessels to our fleet in the second half of 2008, which increased this division's depreciation and amortization costs, and by not having all of our new offshore vessels working at full capacity in the first quarter of 2009."
Serrano added, "Our near- and long-term outlook for the Company remains positive, and we are confident our results will demonstrate the earnings power of our maritime and port assets going forward. Based on our current revenue expectations, we anticipate TMM's operating profit to improve throughout 2009. While we acknowledge that challenges remain, we continue to see a trend towards greater demand for offshore vessel services in the Mexican market. We remain focused on profitable operations, appropriately deploying our capital, the sale of non-productive and non-strategic assets and the restructure of our corporate debt, all while building long-term value for our shareholders. Each quarter we get closer to meeting these goals.
"Our strategy to structure a long-term, non-recourse, peso-denominated financing through our Trust Certificates Program continues to benefit TMM. In the first quarter of 2009, we recorded a net exchange gain of $22.1 million. Additionally, this debt is tied to the 28-day TIIE, or Mexico's Interbank Equilibrium Interest Rate. At March 31, the 28-TIIE decreased 154 basis points to 7.15 percent, and on April 23, this rate decreased further to 6.37 percent. The Central Bank of Mexico anticipates further cuts, which would serve to reduce the debt service of this Program, starting in June, when the next coupon payment of the first and third tranches are due.
"As a result of the organizational restructuring we implemented in 2008, the Company's costs and operating expenses were 8.9 percent lower, and our corporate expenses were reduced 23.2 percent, or $1.1 million, quarter over quarter. In the first quarter of 2009, the ratio of corporate expenses to total revenues was 4.4 percent compared to 5.4 percent in the same quarter last year. Additionally, in the first quarter of 2009 we recorded net income of $4.7 million compared to a net loss of $10.3 million in the first quarter of last year."
Serrano concluded, "The remainder of 2009 and into 2010 will be challenging times for the world's economy. However, the fundamentals of our business remain solid, with our maritime and port businesses well positioned for growth. We continue to seek opportunities to selectively grow our revenue and profit. TMM's management continues to be focused on enhancing shareholder value over the short- and long-terms."

Source: Grupo TMM