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Maritime and Ports Drive Improvement at Grupo TMM
Grupo TMM (TMM - Analyst Report) is one of the largest integrated logistics and transportation companies in Mexico. The firm, through its subsidiaries provides maritime services, land transportation services, integrated logistics services, and ports and terminals management to international and domestic clients throughout Mexico. TMM’s offshore and product tanker fleet generally work with long and medium-term contracts which has the effect of predictable cash flows.
On October 28th, 2010, Grupo TMM announced results for the third quarter of fiscal year 2010 ending September 2010. Revenue for the period was $74.68 million down 0.9% sequentially from $75.42 million and up 0.3% year over year. Revenue in the 2010 periods was negatively impacted by reduced revenue at the Logistics division.
EBITDA increased 38.7% to $22.2 million compared to $16.0 million in the same period of last year. In the first nine months of 2010, EBITDA increased 39.5% to $67.4 million compared to $48.3 million in the same period of 2009.
However, the first-nine months 2009 EBITDA included a $4.4 million profit from the sale of two offshore vessels in the second quarter of 2009. Without this one-time profit, EBITDA increased 53.5%, or $23.5 million, in the 2010 first nine months, compared to the same period last year.
At Maritime, third-quarter 2010 revenue grew 3.9% compared to the 2009 third quarter, mainly due to increases at every segment except for chemical tankers, which had one less vessel in operation. Maritime's operating profit grew 6.4 percent in the 2010 third quarter compared to the same period of the previous year, mainly as a result of a 225.0 percent gross profit increase at product tankers due to higher average daily rates as well as a 66.7 percent gross profit increase at chemical tankers due to more efficient routes and reduced costs.
Improved year-over-year results at the Ports and Terminals division in the 2010 periods were mainly attributable to increased revenue and profit at Acapulco as a result of higher cruise ship calls and auto handling volumes; at shipping agencies due to higher volumes, benefitted by one new cruise line route among Mexican major ports in the third quarter; and at maintenance and repair due to continued improvement in the revenue mix and higher container volumes, specifically at Manzanillo.
This marked the fourth consecutive quarter of positive free cash flow. Management anticipates reaching its annual EBITDA goal of 90 million in 2010. Contract backlog stands at $308.9 million.
Recall at the end of the 2nd quarter the firm reopened its 20-year, non recourse, Mexican Trust Certificates Program to consolidate all tranches into one in an effort to improve the Program's credit rating.
On July 13, HR Ratings de Mexico rated the new issuance of Trust Certificates AA in the domestic scale. The transaction closed on July 29th and should allow the firm to redeploy its fleet, prepay certain dollar-denominated debt and fund new projects. The new issuance rate is TIIE +245 basis points and was rated AA (domestic) by HR Ratings de México.
The company’s shareholders approved this new issuance on April 30, 2010, at the company’s Annual Ordinary Shareholders Meeting. The TIIE is Mexico’s Interbank Equilibrium Interest Rate. The firm consolidated the three tranches of its 20-year, non recourse Mexican Trust Certificates Program into one issuance, for $10.5 billion pesos (approximately $817 million dollars).
In the 3rd quarter, Peso Denominated debt was impacted by $14.8 million as the Peso appreciated versus the Dollar. Cash increased $22.3 million. Of the firm’s entire debt position only 2.5% of net debt is short term.
Grupo TMM (TMM - Analyst Report) is one of the largest integrated logistics and transportation companies in Mexico. The firm, through its subsidiaries provides maritime services, land transportation services, integrated logistics services, and ports and terminals management to international and domestic clients throughout Mexico. TMM’s offshore and product tanker fleet generally work with long and medium-term contracts which has the effect of predictable cash flows.
On October 28th, 2010, Grupo TMM announced results for the third quarter of fiscal year 2010 ending September 2010. Revenue for the period was $74.68 million down 0.9% sequentially from $75.42 million and up 0.3% year over year. Revenue in the 2010 periods was negatively impacted by reduced revenue at the Logistics division.
EBITDA increased 38.7% to $22.2 million compared to $16.0 million in the same period of last year. In the first nine months of 2010, EBITDA increased 39.5% to $67.4 million compared to $48.3 million in the same period of 2009.
However, the first-nine months 2009 EBITDA included a $4.4 million profit from the sale of two offshore vessels in the second quarter of 2009. Without this one-time profit, EBITDA increased 53.5%, or $23.5 million, in the 2010 first nine months, compared to the same period last year.
At Maritime, third-quarter 2010 revenue grew 3.9% compared to the 2009 third quarter, mainly due to increases at every segment except for chemical tankers, which had one less vessel in operation. Maritime's operating profit grew 6.4 percent in the 2010 third quarter compared to the same period of the previous year, mainly as a result of a 225.0 percent gross profit increase at product tankers due to higher average daily rates as well as a 66.7 percent gross profit increase at chemical tankers due to more efficient routes and reduced costs.
Improved year-over-year results at the Ports and Terminals division in the 2010 periods were mainly attributable to increased revenue and profit at Acapulco as a result of higher cruise ship calls and auto handling volumes; at shipping agencies due to higher volumes, benefitted by one new cruise line route among Mexican major ports in the third quarter; and at maintenance and repair due to continued improvement in the revenue mix and higher container volumes, specifically at Manzanillo.
This marked the fourth consecutive quarter of positive free cash flow. Management anticipates reaching its annual EBITDA goal of 90 million in 2010. Contract backlog stands at $308.9 million.
Recall at the end of the 2nd quarter the firm reopened its 20-year, non recourse, Mexican Trust Certificates Program to consolidate all tranches into one in an effort to improve the Program's credit rating.
On July 13, HR Ratings de Mexico rated the new issuance of Trust Certificates AA in the domestic scale. The transaction closed on July 29th and should allow the firm to redeploy its fleet, prepay certain dollar-denominated debt and fund new projects. The new issuance rate is TIIE +245 basis points and was rated AA (domestic) by HR Ratings de México.
The company’s shareholders approved this new issuance on April 30, 2010, at the company’s Annual Ordinary Shareholders Meeting. The TIIE is Mexico’s Interbank Equilibrium Interest Rate. The firm consolidated the three tranches of its 20-year, non recourse Mexican Trust Certificates Program into one issuance, for $10.5 billion pesos (approximately $817 million dollars).
In the 3rd quarter, Peso Denominated debt was impacted by $14.8 million as the Peso appreciated versus the Dollar. Cash increased $22.3 million. Of the firm’s entire debt position only 2.5% of net debt is short term.
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