Grupo_TMM_newGrupo TMM, S.A.B., a Mexican intermodal transportation and logistics Company, reported yesterday its financial results for the first quarter of 2011.
MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "First-quarter results were affected by market dynamics including the global reduction of tariffs for offshore vessels and product tankers, which impacted our Maritime results by decreasing revenue and profit for this division. Maritime results were also affected in the first quarter by a lower utilization of our fleet compared to the first quarter of last year.
"While our financial results in the first quarter were below our expectations, we anticipate performance improvements for the upcoming quarters."
Serrano continued, "At Maritime, six new, medium-term offshore contracts began in the latter part of the first quarter, and will contribute to Maritimes' results going forward. At product tankers, all six vessels that comprise our fleet are now working with contracts. Five of these tankers are owned, and their contracts extend through the end of this year, securing the utilization of these vessels for the remainder of 2011.
"Additionally, we are pursuing longer-term contracts through the operation of our offshore vessels in international markets. Our focus is to find ways to remain positioned to seize high return opportunities."
Serrano concluded, "We continue to work on the implementation of our five-year growth plan, which includes two projects. The first project consists of the development of a container and liquids terminal at the Port of Tuxpan, Veracruz. The container terminal will meet increasing demand for capacity in the Gulf of Mexico, taking advantage of organic growth in the Mexican market. The liquids terminal will address current and projected increased demand for imported gasoline and diesel fuel through the construction of a pipeline and a berthing position. The second project consists of adding specialized offshore vessels to the Company's fleet to meet the increasing demand for deep water exploration in Mexico.
"The successful implementation of these projects will allow TMM to grow with high return assets and operations, significantly improving its capital structure and shareholder value in the long term."
FIRST-QUARTER 2011 FINANCIAL AND OPERATING RESULTS
Compared to the same period of last year, consolidated first-quarter 2011 revenue decreased 18.7 percent, and operating profit decreased 49.5 percent due to revenue and profit decreases at Maritime and revenue reductions and increased losses at Logistics. Notwithstanding these decreases, the Company continues to be free cash flow positive.
Compared to the same period of last year, first-quarter 2011 Maritime revenue decreased 21.7 percent, and operating profit decreased 30.8 percent. These reductions were partially offset by revenue and profit increases at tugboats due to increased vessel calls at Manzanillo. Year over year, in the 2011 first quarter, offshore revenue and gross profit decreased 19.0 percent and 16.7 percent, respectively, and product tanker revenue decreased 24.7 percent resulting in a gross loss. These two segments' decreases were attributable to lower utilization and lower average daily tariffs when compared to the first quarter of 2010. Chemical tanker revenue decreased 41.6 percent as a result of lower freight volumes due to maintenance work on two vessels and poor weather conditions throughout the quarter.
Compared to the same period of last year, first-quarter 2011 Ports and Terminals' revenue increased 16.1 percent, and operating profit remained unchanged at $2.0 million. At the maintenance and repair segment, revenue and gross profit increased 25.0 percent and 40.0 percent, respectively, due to a larger client base and higher volumes at the Manzanillo depot. At Acapulco revenue decreased 9.1 percent to $2.0 million, as two cruise ship lines changed routes, partially offset by a 68.4 percent revenue increase in the car handling segment, from 11,337 cars in the first quarter of 2010 to 19,189 in the first quarter of 2011.
Excluding $6.7 million of revenue from the sale of the minority stake in the Company's automotive inbound logistics business in April 2010, Logistics revenue increased 8.5 percent in the first quarter of 2011 compared to the same quarter last year. EBITDA for this division was $0.4 million in the first quarter of 2011.
DEBT
As of March 31, 2011, TMM's total net debt was $775.1 million. TMM's Trust Certificates debt was negatively impacted by $32.4 million from the appreciation of the peso versus the dollar in the 2011 first quarter. The Company's cash position in the first quarter was reduced, as we paid approximately $44.5 million of our Trust Certificates debt, including a capital prepayment of $8.4 million on February 15.
MANAGEMENT OVERVIEW
José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "First-quarter results were affected by market dynamics including the global reduction of tariffs for offshore vessels and product tankers, which impacted our Maritime results by decreasing revenue and profit for this division. Maritime results were also affected in the first quarter by a lower utilization of our fleet compared to the first quarter of last year.
"While our financial results in the first quarter were below our expectations, we anticipate performance improvements for the upcoming quarters."
Serrano continued, "At Maritime, six new, medium-term offshore contracts began in the latter part of the first quarter, and will contribute to Maritimes' results going forward. At product tankers, all six vessels that comprise our fleet are now working with contracts. Five of these tankers are owned, and their contracts extend through the end of this year, securing the utilization of these vessels for the remainder of 2011.
"Additionally, we are pursuing longer-term contracts through the operation of our offshore vessels in international markets. Our focus is to find ways to remain positioned to seize high return opportunities."
Serrano concluded, "We continue to work on the implementation of our five-year growth plan, which includes two projects. The first project consists of the development of a container and liquids terminal at the Port of Tuxpan, Veracruz. The container terminal will meet increasing demand for capacity in the Gulf of Mexico, taking advantage of organic growth in the Mexican market. The liquids terminal will address current and projected increased demand for imported gasoline and diesel fuel through the construction of a pipeline and a berthing position. The second project consists of adding specialized offshore vessels to the Company's fleet to meet the increasing demand for deep water exploration in Mexico.
"The successful implementation of these projects will allow TMM to grow with high return assets and operations, significantly improving its capital structure and shareholder value in the long term."
FIRST-QUARTER 2011 FINANCIAL AND OPERATING RESULTS
Compared to the same period of last year, consolidated first-quarter 2011 revenue decreased 18.7 percent, and operating profit decreased 49.5 percent due to revenue and profit decreases at Maritime and revenue reductions and increased losses at Logistics. Notwithstanding these decreases, the Company continues to be free cash flow positive.
Compared to the same period of last year, first-quarter 2011 Maritime revenue decreased 21.7 percent, and operating profit decreased 30.8 percent. These reductions were partially offset by revenue and profit increases at tugboats due to increased vessel calls at Manzanillo. Year over year, in the 2011 first quarter, offshore revenue and gross profit decreased 19.0 percent and 16.7 percent, respectively, and product tanker revenue decreased 24.7 percent resulting in a gross loss. These two segments' decreases were attributable to lower utilization and lower average daily tariffs when compared to the first quarter of 2010. Chemical tanker revenue decreased 41.6 percent as a result of lower freight volumes due to maintenance work on two vessels and poor weather conditions throughout the quarter.
Compared to the same period of last year, first-quarter 2011 Ports and Terminals' revenue increased 16.1 percent, and operating profit remained unchanged at $2.0 million. At the maintenance and repair segment, revenue and gross profit increased 25.0 percent and 40.0 percent, respectively, due to a larger client base and higher volumes at the Manzanillo depot. At Acapulco revenue decreased 9.1 percent to $2.0 million, as two cruise ship lines changed routes, partially offset by a 68.4 percent revenue increase in the car handling segment, from 11,337 cars in the first quarter of 2010 to 19,189 in the first quarter of 2011.
Excluding $6.7 million of revenue from the sale of the minority stake in the Company's automotive inbound logistics business in April 2010, Logistics revenue increased 8.5 percent in the first quarter of 2011 compared to the same quarter last year. EBITDA for this division was $0.4 million in the first quarter of 2011.
DEBT
As of March 31, 2011, TMM's total net debt was $775.1 million. TMM's Trust Certificates debt was negatively impacted by $32.4 million from the appreciation of the peso versus the dollar in the 2011 first quarter. The Company's cash position in the first quarter was reduced, as we paid approximately $44.5 million of our Trust Certificates debt, including a capital prepayment of $8.4 million on February 15.