Grupo TMM reports Q4 and full-year 2008 financial results
Grupo TMM, S.A.B., a Mexican intermodal transportation and logistics company, reported today its financial results for the fourth-quarter and 12-month periods of 2008. José F. Serrano, chairman and chief executive officer of Grupo TMM, said, "Over the past several years we have built a solid operating business, modernizing and increasing the size of our maritime fleet and entering into valuable medium- and long-term contracts with Pemex and other clients. Through well thought out investment and operational decisions, our strategy to expand our maritime fleet has resulted in improved revenue and profit generation potential. Even in these very difficult economic times, we are announcing increased revenues of 19.7 percent and increased operating profit of 31.3 percent for 2008 over 2007.
"TMM, along with the vast majority of companies worldwide, faced a challenging business environment in the second half of 2008. Nonetheless, we recorded net income of $80.6 million and earnings per share of $1.43 for the full year of 2008. Also, at December 31, 2008, the Company had total assets of over $1.0 billion, a significant growth over total assets of $662 million at the end of last year. Total stockholders' equity improved to $176.8 million at December 31, 2008, compared to $118.9 million at the end of 2007."
Serrano continued, "Moreover, our strategy to structure a long-term, non-recourse, peso-denominated financing through our Trust Certificates Program has been extremely beneficial to TMM. Due to the strengthening of the U.S. dollar versus the peso in the second half of 2008, TMM recorded net exchange gains of $123.8 million and $145.5 million in the fourth quarter and full year 2008, respectively. I would also like to emphasize that 60 percent of the Company's revenues and 35 percent of its costs and expenses are U.S. dollar denominated.
"Demand for TMM's offshore and product tanker services continued to be strong throughout 2008. In the fourth quarter, we received three new offshore vessels which began operations under two- and three-year fixed-rate contracts with Pemex."
Serrano added, "We believe our results this year are indicative of the resilience of our maritime and port businesses. We are confident that our maritime business will continue to grow, as a result of our efficient operating position and the long-term contractual nature of our revenues, as will our port business, as we realize its full potential in 2009 and in years to come.
"During the second half of 2008, we began a number of initiatives that should allow TMM to remain well positioned in this uncertain economic environment. Among these actions, we reduced our non-union workforce by 23 percent, which we expect will result in cost savings of approximately $3 million in 2009. We also enacted an organizational restructuring which will improve operational efficiencies while focusing our efforts on execution.
"As a result of this organizational restructuring, corporate expenses in the fourth quarter were impacted by $1.1 million of non-recurring costs related to severance expenses. Excluding these non-recurring costs, the ratio of corporate expenses to total revenue in the full year of 2008 would have been 5.1 percent compared to 6.1 percent in the same period of 2007. We expect this ratio to continue a downward trend in 2009."
Serrano concluded, "We believe that 2009 will be a challenging year. Nevertheless, we are confident that we are well positioned to meet these challenges as we continue to take additional steps to reduce costs, sell non-productive and non-strategic assets and restructure our corporate debt. Additionally, we intend to grow our Port business according to the Mexican Government's development plan and to diversify our maritime business to international markets."
"TMM, along with the vast majority of companies worldwide, faced a challenging business environment in the second half of 2008. Nonetheless, we recorded net income of $80.6 million and earnings per share of $1.43 for the full year of 2008. Also, at December 31, 2008, the Company had total assets of over $1.0 billion, a significant growth over total assets of $662 million at the end of last year. Total stockholders' equity improved to $176.8 million at December 31, 2008, compared to $118.9 million at the end of 2007."
Serrano continued, "Moreover, our strategy to structure a long-term, non-recourse, peso-denominated financing through our Trust Certificates Program has been extremely beneficial to TMM. Due to the strengthening of the U.S. dollar versus the peso in the second half of 2008, TMM recorded net exchange gains of $123.8 million and $145.5 million in the fourth quarter and full year 2008, respectively. I would also like to emphasize that 60 percent of the Company's revenues and 35 percent of its costs and expenses are U.S. dollar denominated.
"Demand for TMM's offshore and product tanker services continued to be strong throughout 2008. In the fourth quarter, we received three new offshore vessels which began operations under two- and three-year fixed-rate contracts with Pemex."
Serrano added, "We believe our results this year are indicative of the resilience of our maritime and port businesses. We are confident that our maritime business will continue to grow, as a result of our efficient operating position and the long-term contractual nature of our revenues, as will our port business, as we realize its full potential in 2009 and in years to come.
"During the second half of 2008, we began a number of initiatives that should allow TMM to remain well positioned in this uncertain economic environment. Among these actions, we reduced our non-union workforce by 23 percent, which we expect will result in cost savings of approximately $3 million in 2009. We also enacted an organizational restructuring which will improve operational efficiencies while focusing our efforts on execution.
"As a result of this organizational restructuring, corporate expenses in the fourth quarter were impacted by $1.1 million of non-recurring costs related to severance expenses. Excluding these non-recurring costs, the ratio of corporate expenses to total revenue in the full year of 2008 would have been 5.1 percent compared to 6.1 percent in the same period of 2007. We expect this ratio to continue a downward trend in 2009."
Serrano concluded, "We believe that 2009 will be a challenging year. Nevertheless, we are confident that we are well positioned to meet these challenges as we continue to take additional steps to reduce costs, sell non-productive and non-strategic assets and restructure our corporate debt. Additionally, we intend to grow our Port business according to the Mexican Government's development plan and to diversify our maritime business to international markets."