Grupo TMM Reports Improved Revenue in the Second Quarter and First Six Months; TFM, Ports and Terminals, Specialized Maritime and Logistics See Improved Revenues.Business Editors MEXICO Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. CITY--(BUSINESS WIRE)--July 26, 2002 Grupo TMM TMM The ISO 4217 currency code for the Turkmenistan Manet. , S.A. de C.V. (NYSE NYSE See: New York Stock Exchange : TMM and TMM/L), the largest Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of multi-modal See multimodal. transportation and logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. company and owner of the controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Mexico's busiest railway, TFM TFM Traffic Flow Management TFM TeX Font Metrics TFM Transportacion Ferroviaria Mexicana TFM Trusted Facility Manual TFM Testicular Feminization TFM Total Facility Management TFM Tentative Final Monograph TFM Transaction Flow Manager TFM Thermally Fused Melamine , reported second quarter 2002 revenues from consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operations of $261.9 million, compared to $253.7 million for the same period of 2001, an increase of 3.2 percent. Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (Earnings Before Income, Taxes and Depreciation) was $83.1 million for the quarter, compared to EBITDA of $80.2 million in the second quarter of 2001, a 3.6 percent increase. Grupo TMM's consolidated second quarter 2002 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased $2.5 million, quarter-over-quarter, from $53.0 million in 2001 to $55.5 million in 2002. Net income for the quarter decreased $6.1 million from last year's results, from $2.5 million in 2001 to $(3.6) million in 2002. This quarterly decrease was primarily affected by a devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the peso, which impacted both revenues on a monthly basis and receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed in the form of exchange loss during the quarter, amounting to $12.4 million. Grupo TMM reported revenues from unconsolidated operations of $80.5 million for the second quarter of 2002, compared to $69.8 million for the same period of 2001, an increase of 15.3 percent. (Unconsolidated Grupo TMM includes its Specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. Maritime INTEREST, MARITIME. By maritime interest is understood the profit of money lent on bottomry or respondentia, which is allowed to be greater than simple interest because the capital of the lender is put in jeopardy. , Logistics, Port and Terminal operations The reception, processing, and staging of passengers; thereceipt, transit, storage, and marshalling of cargo; the loadingand unloading of modes of transport conveyances; and themanifesting and forwarding of cargo and passengers todestination. See also operation; terminal. and now excludes Mex Rail statistics.) Unconsolidated EBITDA was $14.7 million for the quarter, compared to $16.7 million (excluding Mex Rail) in the second quarter of 2001, a 12 percent decrease. The revenue increases noted above reflect supply ship contract growth in Specialized Maritime (17 percent), port services expansion (8.5 percent) and new logistics product offerings (19 percent) at the border and within Mexico. Grupo TMM's unconsolidated second quarter 2002 operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. decreased $1.3 million, quarter-over-quarter, from $9.5 million in 2001 to $8.2 million in 2002. Net income for the quarter decreased $6.1 million from last year's results, from $2.5 million in 2001 to $(3.6) million in 2002. The decrease in operating profit quarter-over-quarter was impacted by a reduction in port storage revenue, as the Manzanillo Manzanillo, city, Cuba Manzanillo (mänsänē`yō), city (1994 est. pop. 98,000), Granma prov., SE Cuba, a port on the Guacanayabo Gulf of the Caribbean Sea. port became more tied to transpacific trans·pa·cif·ic adj. 1. Situated on or coming from the other side of the Pacific Ocean. 2. Spanning or crossing the Pacific Ocean. shipments and less tied to South American destinations, which traditionally required more storage; an increase in costs at ports to prepare for contract volume expansion announced in May at Manzanillo and an increase in costs for logistics product offerings as revenues continue to increase. First Six Months Results Grupo TMM reported revenues from consolidated operations of $505.6 million in the first six months of 2002, compared to $491.4 million for the same period of 2001, an increase of 2.9 percent. Consolidated EBITDA was $152.8 million for the period, compared to EBITDA of $145.4 million in the same period of 2001, a 5.1 percent increase. Grupo TMM's consolidated operating income during the first half of 2002 increased $5.6 million quarter-over-quarter, from $91.7 million in 2001 to $97.3 million in 2002. Net income for the first half of the year increased $1.4 million from last year's results, from $7.0 million in 2001 to $8.4 million in 2002. The first six months of 2002 were impacted by a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain on the sale of Mex Rail and Tex Mex TEX MEX Texas Mexican Railway to TFM. Grupo TMM reported revenues from unconsolidated operations of $170.1 million (excludes Mex Rail) for the first six months of 2002, compared to $138.3 million for the same period of 2001, an increase of 23 percent. Unconsolidated EBITDA was $27.4 million for the period, compared to $30 million in the first half of 2001, a 8.7 percent decrease. First half results reflect clear improvement in Grupo TMM's revenues not related to its rail investments. As compared with 2001, Grupo TMM's unconsolidated operating profit decreased $2.3 million in the first six months of 2002, from $16.6 million in 2001, to $14.3 million in 2002. Net income for the period increased $1.4 million from last year's results, from $7.0 million in 2001 to $8.4 million in 2002. As noted earlier, the first six months of 2002 were impacted by a one-time gain on the sale of Mex Rail and Tex Mex to TFM. Share Reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. A special shareholders meeting to receive consent for the reclassification of the two classes of stock will be held on August 28, 2002. If the share reclassification is approved by the shareholders, the conversion should become effective during the first few days of September September: see month. 2002. The conversion ratio is one for one. Additional Equity at TFM The company also reported that during the quarter, TFM has exercised a call option to purchase an additional 24.6 percent of equity interest in Grupo TFM from the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum government. The company anticipates the transaction to close by the end of July July: see month. . Business Outlook Jose JOSE Jealous One's Still Envy (song) JOSE Joint Optics Structures Experiment Serrano ser·ra·no n. pl. ser·ra·nos A cultivar of the tropical pepper Capsicum annuum having small, blunt, highly pungent red or green fruit used in cooking. , chairman of Grupo TMM, said, "As we have said in the past, strengthening the balance sheet and matching financial capabilities with the opportunities in our various operations is a top priority. Once we do that, TMM's stock will become a currency that reflects the economic potential of these franchises. To that end, we placed a convertible issue during the quarter, which reduced our commercial paper obligations, extended the debt maturity profile of the company and raised the liquidity necessary to address the 2003 obligation. The convertible gives us flexibility to repay the issue in stock or cash, based upon management's view of market conditions. To this point, we have repaid the issue in cash due to the depressed price Depressed price In the context of stocks, stock whose market price is low in comparison to stocks in its sector. of our stock and will continue to pay cash going forward, as long the stock price remains depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. . "We had multiple financing issues to accomplish for TMM and TFM during the first half of this year, such as raising capital to exercise the call option on the government's stake at Grupo TFM, extending the maturities of TFM's commercial paper, which we anticipate will be completed by mid August, receiving additional commitments to increase TMM's securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program and addressing TMM's debt maturity profile at a reasonable cost far in advance of maturities. The above actions demonstrate that TMM is committed to improving its balance sheet and will allow us to build a solid financial base to produce the capital that will be needed to fund our growth. "We have transformed this company from a container (1) Software that acts as a parent program to hold and execute a set of commands or to run other software routines. (2) A data structure that holds one or more different types of data. See metafile and OLE. shipping liner liner /lin·er/ (lin´er) material applied to the inside of the walls of a cavity or container for protection or insulation of the surface. liner see teat cup liner. business to an integrated logistics company in a very short time, and we remain confident that the asset-based franchises we have built and developed will fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. the vision we have described to our investors," Serrano concluded. "The continued growth of our assets and customer base, and the resulting improved revenue base in this difficult economic environment, emphasizes that we are continuing to make solid progress in building the fundamental value of the company. The assets we possess are priceless price·less adj. 1. Of inestimable worth; invaluable. 2. Highly amusing, absurd, or odd: a priceless remark. , irreplaceable, produce exceptional cashflow and serve as the ultimate security for TMM's financial obligations and its future interest as an investment. We continue to assure the fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of the company's financial commitments, as our asset values far exceed the financial commitments and equity value that we experience today." Javier Javier (also Xabier) may refer to:
Segovia, city (1990 pop. 55,188), capital of Segovia prov., central Spain, in Castile-León, on the Eresma River. It stands on a rocky hill (3,297 ft/1,005 m high) crowned by the cathedral and the turreted alcazar (fortified , president of Grupo TMM, commented, "There are several key measures we are taking in the second half of 2002 that will fulfill many of the commitments we made to our investors in the beginning of the year. These measures will focus on shareholder interests, mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. financial risk without extraordinary events, pursuing the VAT VAT See: Value-added tax VAT See value-added tax (VAT). settlement and pursuing PEMEX Pemex officially Petróleos Mexicanos Mexico's state-owned oil company. In 1938 Pres. Lázaro Cárdenas nationalized 17 foreign oil companies to create Pemex, the largest Latin American petroleum company and a major world exporter of fossil fuel. opportunities. "We expect that the remainder of the year will continue to show revenue growth not only at Ports, Specialized Maritime and Logistics, but at TFM, as the ground work has been laid with PEMEX, automotive and intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. customers to rapidly expand their market share. These revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. , joined with continued cost reductions, lead us to believe that our 2002 outlook remains stable." 2002 OUTLOOK The company anticipates Grupo TMM to reach a consolidated EBITDA of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $345 million in 2002 and a consolidated operating profit of approximately $240 million. In addition, corporate overhead and interest charges are projected to continue to decline compared with 2001. All projections include consolidated financials from TFM.
CONSOLIDATED GRUPO TMM(a)
-All numbers in thousands-
Grupo TMM - Second Quarter 2002 vs. 2001
Second Quarter 2002
Specialized
TFM Tex-Mex Ports Maritime Logistics
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Revenue 173,507 12,805 28,099 32,508 19,973
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Costs 126,292 12,043 17,338 27,127 17,833
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Gross Result 762 10,761 5,381 2,140
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Gross Margin 6.0% 38.3% 16.6% 10.7%
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SG & A (Estimate) 661 2,115 2,466 1,385
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Operating Results 47,215 101 8,646 2,915 755
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Operating Margin 27.2% 0.8% 30.8% 9.0% 3.8%
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2002
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Other Total
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Revenue (4,990) 261,902
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Costs (4,980) 195,653
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Gross Result (10) n.a.
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Gross Margin (0.2%) n.a.
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SG & A (Estimate) 4,120 10,747
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Operating Results (4,130) 55,502
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Operating Margin 21.2%
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Second Quarter 2001
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Specialized
TFM Tex-Mex Ports Maritime Logistics
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Revenue 171,862 14,530 25,891 27,820 16,797
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Costs 128,287 13,897 12,540 23,289 13,582
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Gross Result 633 13,351 4,531 3,215
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Gross Margin 4.4% 51.6% 16.3% 19.1%
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SG & A (Estimate) 1,150 2,689 2,582 1,891
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Operating Results 43,575 (517) 10,663 1,949 1,324
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Operating Margin 25.4% (3.6)% 41.2% 7.0% 7.9%
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2001
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Other Total
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Revenue (3,242) 253,658
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Costs (3,234) 188,361
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Gross Result (8) n.a.
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Gross Margin (0.2%) n.a.
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SG & A (Estimate) 3,955 12,266
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Operating Results (3,963) 53,031
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Operating Margin 20.9%
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Grupo TMM - First Six Months 2002 vs. 2001
First Six Months 2002
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Specialized
TFM Tex-Mex Ports Maritime Logistics
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Revenue 330,979 26,116 52,290 65,645 39,081
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Costs 248,029 23,989 33,876 54,146 34,599
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Gross Result 2,127 18,414 11,499 4,482
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Gross Margin 8.1% 35.2% 17.5% 11.5%
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SG & A (Estimate) 1,834 4,229 4,733 2,658
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Operating Results 82,950 293 14,185 6,766 1,824
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Operating Margin 25.1% 1.1% 27.1% 10.3% 4.7%
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2002
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Other Total
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Revenue (8,561) 505,550
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Costs (8,446) 386,193
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Gross Result (115) n.a.
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Gross Margin (1.3%) n.a.
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SG & A (Estimate) 8,569 22,023
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Operating Results (8,684) 97,334
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Operating Margin 19.3%
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First Six Months 2001
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Specialized
TFM Tex-Mex Ports Maritime Logistics
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Revenue 327,947 29,144 49,024 57,776 32,872
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Costs 252,814 27,865 25,012 50,057 24,589
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Gross Result 1,279 24,012 7,719 8,283
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Gross Margin 4.4% 49.0% 13.4% 25.2%
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SG & A (Estimate) 2,356 5,379 5,170 3,759
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Operating Results 75,133 (1,077) 18,633 2,549 4,524
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Operating Margin 22.9% (3.7)% 38.0% 4.4% 13.8%
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2001
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Other Total
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Revenue (5,321) 491,442
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Costs (5,335) 375,002
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Gross Result 14 n.a.
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Gross Margin 0.3% n.a.
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SG & A (Estimate) 8,060 24,724
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Operating Results (8,046) 91,717
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Operating Margin 18.7%
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FIRST SIX MONTHS ACCOMPLISHMENTS POSITION GRUPO TMM FOR GROWTH AND IMPROVING CASH RETURNS -- Grupo TMM agreed with Kansas City Southern to sell Mex Rail and Tex Mex to TFM. The two companies are working together to better coordinate TFM's shipments over the two lines. -- A proposed rail merger between Ferro Sur and Ferro Mex was defeated. -- TFM has broken ground in Toluca for a new 80-acre auto-mixing center, which will change the face of automotive transportation in Mexico, both in-bound and out-bound. Phase I is expected to be completed in late 2002, and the entire facility by early 2003. This facility, which will include an automotive terminal yard, intermodal terminal, integrated logistics center and materials warehouse, will be used by most major automotive manufacturers, including Chrysler, General Motors, Nissan, Toyota, BMW and Peugeot. -- Ports and Terminals signed a contract with Mediterranean Shipping and extended relationships with CP Ships, APL and Maersk to increase volume by at least 66 percent over the next 18 months. A major expansion of the port at Manzanillo, now approved by the government, will double capacity by the end of 2003. -- TFM initiated a new four-year program with PEMEX to ship oil related products, representing $30 million per year of additional revenue, beginning in the second half of 2002. TFM is upgrading PEMEX rail facilities to handle these products. -- TFM exercised the call to acquire an additional 24.6 percent of Grupo TFM equity from the Mexican government. -- Grupo TMM raised $32.5 million through a non-mandatory convertible note offering, which allowed the company to eliminate $32.5 million of its outstanding commercial paper. The note is being repaid in cash, but can be repaid in stock, depending on market conditions. -- Grupo TMM has received a $20 million commitment to increase its securitization of receivables program, allowing the company to raise additional liquidity. -- Grupo TMM has set a date for a special shareholder meeting to approve the reclassification of its share classes. Segment Results Grupo TMM's Mexican-based business components include: 1) multi-modal logistics facilities throughout the country; 2) the TFM Railroad railroad or railway, form of transportation most commonly consisting of steel rails, called tracks, on which freight cars, passenger cars, and other rolling stock are drawn by one locomotive or more. ; 3) the Texas Mexican Railway The Texas Mexican Railway Company is a Class II railroad (formerly a Class I railroad) that operates as a subsidiary of Kansas City Southern Railway in Texas.[1] It is often referred to as the Tex-Mex, or TexMex, Railway. ; 4) ownership and management of key Mexican port facilities; 5) diverse trucking operations; 6) a specialized marine transport division and 7) the continuation continuation - continuation passing style of alliances with leading transportation and distribution companies. These units collectively allow Grupo TMM to continue to market a full range of non-owned alliance assets. Grupo TFM TFM's carload carload In commodities trading, a railroad car or truckload of grain that ranges from 1,400 to 2,500 bushels. volume for the second quarter of 2002 increased by 8.3 percent, and net revenue increased by 1 percent, or $1.6 million over the same period of last year. Revenue was affected by mix and length of haul changes. TFM attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. EBITDA of $67.9 million for the quarter, and operating profit increased 8.4 percent in the quarter versus 2001. The quarter produced an operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: of 72.8 percent (operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 27.2 percent), an improvement of 1.8 percentage points compared to the second quarter of 2001. During the quarter at TFM, revenues by division were as follows: chemicals increased by 17 percent; automotive increased by 2 percent; agroindustrial ag·ro·in·dus·tri·al adj. Of or relating to the production or supply of various needs, such as water or power, for agriculture and industry. declined by 13 percent, due to a record grain harvest (tool, networking) Harvest - A highly scalable, customisable system for discovering resources on the Internet. Version: 1.3. http://tardis.ed.ac.uk/harvest/. in northwestern north·west n. 1. Abbr. NW The direction or point on the mariner's compass halfway between due north and due west, or 45° west of due north. 2. An area or region lying in the northwest. 3. Mexico which reduced the need for imports; industrials declined by 8 percent; cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder. and minerals increased by 11 percent and intermodal increased by 13 percent. Intermodal, which now receives 79 percent of its volume from the automotive segment, continued to grow from all types of truck to rail conversions, allowing for expansion of this segment. TFM's net revenue increased $3.0 million in the first six months of 2002 over the same period of last year, and EBITDA of $125.4 million in the period was 98.2 percent of plan for the first half of the year. Operating profit increased 10.5 percent in the period versus 2001. The first six months produced an operating ratio of 74.9 percent (operating margin of 25.1 percent), an improvement of 2.2 percentage points compared to the same period of 2001. Because of improving volume, expected recovery of the Mexican economy, foreign trade growth and continued cost reductions, TFM continued to affirm its EBITDA target of $280 million and an operating ratio for the year in the low 70's. TexMex In the second quarter of 2002, the railroad's net revenue decreased 11.9 percent over the same period of last year. Operating profit increased, however, by $618,000 in the quarter versus 2001. The quarter produced a positive operating ratio, an improvement of 4.4 percentage points compared to the second quarter of 2001. Most significantly, costs at TexMex have been reduced by $4.7 million since last year, or 15.4 percent of costs. EBITDA for the quarter was $533,000. In the first half of 2002, the railroad's net revenue decreased 10.4 percent over the same period of last year. Operating profit turned to a profit position, an improvement of 4.8 percentage points in operating ratio compared to the same period of 2001. EBITDA for the first six months was $1.3 million, an improvement of $1 million over the same period last year. Ports and Terminals The division's revenues grew 8.5 percent in the second quarter of 2002 compared to 2001, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a corridor mix change, which reduced storage revenue. Due to recently signed customer agreements and governmental approval of port facilities in Manzanillo, the division has increased expenditures in the first half of 2002 to prepare for this volume growth. In the second quarter, the division further reduced SG&A by an annual run rate of $500,000 at Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi corporate headquarters. Grupo TMM believes that port and terminal volume will expand, as the current Manzanillo terminal is operating at 95 percent of capacity. Within the year, construction of the yard for the new berth should be completed. Additionally, the division reported an overall increase in the number of containers moved per crane crane, in zoology crane, large wading bird found in marshes in the Northern Hemisphere and in Africa. Although sometimes confused with herons, cranes are more closely related to rails and limpkins. , per hour, of 25 percent. Finally, passenger activity at Cozumel Cozumel (kōzə`mel), resort island, c.190 sq mi (490 sq km), Quintana Roo state, Mexico, in the Caribbean Sea off the E coast of the Yucatán peninsula. It is famed for its beaches and coral reef (declared a national park in 1996). and Progreso Progreso or Progresso could refer to any of several things:
Specialized Maritime In its Specialized Maritime division, the company reported that the application of the new Mexican New Mexico Abbr. NM or N.M. or N.Mex. A state of the southwest United States on the Mexican border. It was admitted as the 47th state in 1912. Maritime law maritime law, system of law concerning navigation and overseas commerce. Because ships sail from nation to nation over seas no nation owns, nations need to seek agreement over customs related to shipping. , which gives preference to Mexican owned, Mexican flagged vessels Vessels are a post-rock band from Leeds, UK. Vessels were born from the ashes of A Day Left in September 2005. In 2006 they self-released a 5 track eponymous ep, and played many gigs including the unsigned stage at Leeds Festival. , and the elimination of previously unprofitable car carrier and bulk routes in 2001, produced an increase of 52.6 percent in operating profit in the second quarter, to $2.9 million in 2002, from $1.9 million in 2001. For the first six months of 2002, the division produced an increase of 172 percent in operating profit over the same period of 2001, to $6.8 million from $2.5 million. Supply ship revenue in the second quarter of 2002 increased 80.1 percent compared to the same period of 2001, indicative indicative: see mood. of the development of PEMEX oil production. Additionally, tugboat tugboat, small, strongly built vessel, used to guide large oceangoing ships into and out of port and to tow barges, dredging and salvage equipment, and disabled vessels. revenue continues to grow and remains highly profitable. Finally, the company has renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. two of its three oil tanker contracts with PEMEX and should renew the third vessel VESSEL, mar. law. A ship, brig, sloop or other craft used in navigation. 1 Boul. Paty, tit. 1, p. 100. See sup. 2. By an act of congress, approved July 29, 1850, it is provided that any person, not being an owner, who shall on the high seas, willfully, with. in the near term. Logistics The company reported an increase in revenue for its logistics division of 19 percent, or $3.2 million, in the second quarter of 2002 compared to the same period in 2001, due to new logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation products at the border and within Mexico. Operating profit in the quarter decreased due to extraordinary costs in maintenance and leasing of equipment. In the first six months of 2002, revenue increased 18.8 percent, or $6.2 million, compared to the same period in 2001. Grupo TMM will broadcast its second quarter conference call and presentation for investors over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.firstcallevents.com/service/ajwz361667702gf12.html on Monday Monday: see week. , July 29, 2002, at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To listen to the live call, please go to the site early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software, or dial 800-218-9073 (domestic) or 303-262-2130 (international). A replay will also be available for 90 days after the conclusion of the call at this web site. Headquartered in Mexico City, Grupo TMM is Latin America's largest multimodal Two or more modes of operation. The term is used to refer to a myriad of functions and conditions in which two or more different methods, processes or forms of delivery are used. On the Web, it refers to asking for something one way and receiving the answer another; for example requesting transportation company. Through its branch offices and network of subsidiary companies, Grupo TMM provides a dynamic combination of ocean and land transportation services. Grupo TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. railway and carries over 40 percent of the country's rail cargo. Visit Grupo TMM's web site at www.grupotmm.com.mx and TFM's web site at www.gtfm.com.mx. Both sites offer Spanish/English language options. Included in this report are certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on the beliefs of the company's management, as well as on assumptions made by and information currently available to the company at the time such statements were made. The words "believe", "expect" and "anticipate" and similar expressions identify some of these forward-looking statements. Statements looking forward in time involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors include, among others, global, U.S. and Mexican economic and social conditions; the effect of the North American Free Trade Agreement North American Free Trade Agreement (NAFTA), accord establishing a free-trade zone in North America; it was signed in 1992 by Canada, Mexico, and the United States and took effect on Jan. 1, 1994. ("NAFTA NAFTA in full North American Free Trade Agreement Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's ") on the level of U.S. -Mexico trade; the company's ability to convert customers from using trucking services to rail transport services The collective functions of layers 1 through 4 of the OSI model. ; competition from other rail carriers and trucking companies in Mexico; the company's ability to control expenses; and the effect of the company's employee training, technological improvements and capital expenditures on labor productivity, operating efficiencies and service reliability. Actual results could differ materially from those included in such forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of their respective dates. The company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These risk factors and additional information are included in the company's reports on Forms 6K and 20-F on file with the Securities and Exchange Commission.
Financial Tables to Follow...
Grupo TMM, S.A. de C.V. and subsidiaries
(a) Consolidated Statement of Income
- millions of dollars -
Three months ended Six months ended
June, 30 June, 30
2002 2001 2002 2001
----------------------------------------------------------------------
Revenue from freight
and services 261.902 253.658 505.550 491.442
----------------------------------------------------------------------
Cost & expenses of
operation (172.363) (165.760) (339.533) (330.005)
----------------------------------------------------------------------
Depreciation &
amortization of vessels
and operating equipment (23.290) (22.601) (46.660) (44.997)
----------------------------------------------------------------------
66.249 65.297 119.357 116.440
----------------------------------------------------------------------
Administrative expenses (10.747) (12.266) (22.023) (24.723)
----------------------------------------------------------------------
Operating income 55.502 53.031 97.334 91.717
======================================================================
Financial (expenses)
income,net (34.967) (32.645) (68.262) (66.292)
----------------------------------------------------------------------
Exchange (loss)
gain - Net (12.425) 0.814 (10.917) 3.567
----------------------------------------------------------------------
(47.392) (31.831) (79.179) (62.725)
----------------------------------------------------------------------
Other income (expense)
- Net (1.736) (1.206) 0.488 51.360
----------------------------------------------------------------------
Income before taxes 6.374 19.994 18.643 80.352
======================================================================
Provision for taxes 2.833 16.059 17.262 (13.654)
----------------------------------------------------------------------
Income before minority
interest 9.207 36.053 35.905 66.698
======================================================================
Minority interest (12.786) (33.586) (27.539) (59.670)
----------------------------------------------------------------------
Net income (3.579) 2.467 8.366 7.028
----------------------------------------------------------------------
Weighted average
outstanding shares
(millions) 56.963 56.698 56.963 56.698
Earnings per share
(dollars / share) (0.06) 0.04 0.15 0.12
Outstanding shares
at end of period
(millions) 56.963 56.698 56.963 56.698
Earnings per share
(dollars / share) (0.06) 0.04 0.15 0.12
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
Grupo TMM, S.A. de C.V. and subsidiaries
(a) Consolidated Balance Sheet
- millions of dollars -
June 30, December 31,
2002 2001
----------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents 254.049 87.628
----------------------------------------------------------------------
Accounts receivable
Customers 154.556 151.610
----------------------------------------------------------------------
Other accounts receivable 166.110 154.846
----------------------------------------------------------------------
Prepaid expenses 38.094 42.072
----------------------------------------------------------------------
Total current assets 612.809 436.156
======================================================================
ACCOUNTS RECEIVABLE (LONG-TERM) 82.141 81.892
======================================================================
VESSELS, EQUIPMENT AND PROPERTY 1,955.951 1968.289
======================================================================
OTHER ASSETS 125.059 99.426
======================================================================
DEFERRED TAXES 280.924 267.549
======================================================================
ASSETS OF DISCONTINUING BUSINESS 0.500 0.500
======================================================================
3,057.384 2,853.812
----------------------------------------------------------------------
CURRENT LIABILITIES
Bank loans and current maturities of
long term liabilities 507.734 332.957
----------------------------------------------------------------------
Suppliers 42.834 77.454
----------------------------------------------------------------------
Other accounts payable and
accrued expenses 154.489 133.814
----------------------------------------------------------------------
Total current liabilities 705.057 544.225
======================================================================
REVENUE AND COSTS OF VOYAGES
IN PROCESS-NET 0.188 0.008
======================================================================
DEFERRED TAXES 24.260 28.798
======================================================================
CONVERTIBLE NOTES 32.500
======================================================================
LONG-TERM LIABILITIES
Bank loans and other obligations 978.411 953.171
----------------------------------------------------------------------
Other long-term liabilities 77.379 61.282
----------------------------------------------------------------------
Total long-term liabilities 1,055.790 1,014.453
======================================================================
1,817.795 1,587.484
----------------------------------------------------------------------
MINORITY INTEREST 1,058.824 1,089.397
======================================================================
STOCKHOLDER'S EQUITY
Capital stock 121.158 121.158
----------------------------------------------------------------------
Retained earnings 77.364 73.530
----------------------------------------------------------------------
Initial translation loss (17.757) (17.757)
----------------------------------------------------------------------
180.765 176.931
----------------------------------------------------------------------
3,057.384 2,853.812
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
Grupo TMM, S.A. de C.V. and subsidiaries
(a) Consolidated Statement of Cash Flow
- millions of dollars -
----------------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
----------------------------------------------------------------------
OPERATIONS
Income before results (3.579) 2.467 8.366 7.028
----------------------------------------------------------------------
Charges (credits) to
income not affecting
resources:
Depreciation &
amortization 28.256 27.177 55.724 53.650
----------------------------------------------------------------------
Minority interest 12.786 33.586 27.539 59.670
----------------------------------------------------------------------
Results on sale of
assets (5.796) 0.008 (4.161) (60.746)
----------------------------------------------------------------------
Deferred income taxes (3.214) (16.807) (17.914) 12.838
----------------------------------------------------------------------
Other non-cash items 22.042 (0.666) 26.549 16.919
----------------------------------------------------------------------
Total non-cash items 54.074 43.298 87.737 82.331
----------------------------------------------------------------------
Changes in assets &
liabilities (68.839) (28.477) (59.003) (39.696)
----------------------------------------------------------------------
Total adjustments (14.765) 14.821 28.734 42.635
----------------------------------------------------------------------
Net cash (used in)
provided by
operating activities (18.344) 17.288 37.100 49.663
======================================================================
INVESTMENT
Proceeds from sales
of assets (net) 0.498 7.761 0.900 9.217
----------------------------------------------------------------------
Payments for purchases
of assets (19.814) (23.446) (74.172) (50.990)
----------------------------------------------------------------------
Sale of subsidiary,
net of cash sold 2.440 2.440
----------------------------------------------------------------------
Dividends paid to
minority shareholders (0.022) (0.673) (0.022)
----------------------------------------------------------------------
Dividends from
non-consolidates
subsidiaries 1.173
----------------------------------------------------------------------
Purchase & sale of
marketable securities
(net) 0.275 0.275
----------------------------------------------------------------------
Net cash (used in)
provided by investment
activities (19.316) (12.992) (72.772) (39.080)
======================================================================
FINANCING
Short-term
borrowings (net) (24.608) (1.882) 3.725 (3.668)
----------------------------------------------------------------------
Principal payments
under capital lease
obligations (0.034) (0.016) (0.406) (4.791)
----------------------------------------------------------------------
(Repurchase) sale of
accounts receivable
(net) (1.070) (1.070)
----------------------------------------------------------------------
Repayment of long-term
debt (10.248) (10.495) (10.981)
----------------------------------------------------------------------
Proceeds from issuance
of long-term debt 177.491 0.099 177.491 8.899
----------------------------------------------------------------------
New capital lease
obligations 0.348 2.980
----------------------------------------------------------------------
Proceeds from
convertible notes 32.500 32.500
----------------------------------------------------------------------
Net cash (used in)
provided by
financing activities 174.031 (1.799) 202.093 (7.561)
======================================================================
Net increase
(decrease) in cash 136.371 2.497 166.421 3.022
----------------------------------------------------------------------
Cash at beginning
of period 117.678 87.772 87.628 87.247
----------------------------------------------------------------------
Cash at end of period 254.049 90.269 254.049 90.269
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
Grupo TMM, S.A. de C.V. and subsidiaries
Statement of Income (without Railroad)
- millions of dollars -
----------------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
----------------------------------------------------------------------
Revenue from freight
and services 80.488 84.299 170.080 167.464
----------------------------------------------------------------------
Cost of freight
and services (59.445) (59.147) (128.183) (119.425)
----------------------------------------------------------------------
Depreciation of
vessels and operating
equipment (2.771) (3.430) (6.251) (6.732)
----------------------------------------------------------------------
18.272 21.722 35.646 41.307
----------------------------------------------------------------------
Administrative expenses (10.086) (12.266) (21.362) (24.723)
----------------------------------------------------------------------
Operating income 8.186 9.456 14.284 16.584
======================================================================
Financial (expenses)
income, net (13.787) (11.856) (27.092) (23.498)
----------------------------------------------------------------------
Exchange (loss)
gain - Net (0.298) (0.296) 0.395 (0.589)
----------------------------------------------------------------------
(14.085) (12.152) (26.697) (24.087)
----------------------------------------------------------------------
Other income (expense)
- Net 0.234 2.089 8.230 1.613
----------------------------------------------------------------------
Income before taxes (5.665) (0.607) (4.183) (5.890)
======================================================================
Provision for taxes 3.352 (0.894) 14.717 4.291
----------------------------------------------------------------------
Income before minority
interest (2.313) (1.501) 10.534 (1.599)
======================================================================
Minority interest (4.968) (7.499) (10.066) (12.410)
----------------------------------------------------------------------
Net income before results
for investment in TFM (7.281) (9.000) 0.468 (14.009)
======================================================================
Interest in TFM 3.702 11.467 7.898 21.037
----------------------------------------------------------------------
Net income (3.579) 2.467 8.366 7.028
----------------------------------------------------------------------
Weighted average
outstanding shares
(millions) 56.963 56.698 56.963 56.698
Earnings per share
(dollars / share) (0.06) 0.04 0.15 0.12
Outstanding shares at
end of period
(millions) 56.963 56.698 56.963 56.698
Earnings per share
(dollars / share) (0.06) 0.04 0.15 0.12
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
Grupo TMM, S.A. de C.V. and subsidiaries
Balance Sheet (without Railroad)
- millions of dollars -
----------------------------------------------------------------------
June 30, December 31,
2002 2001
----------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents 30.813 34.842
----------------------------------------------------------------------
Accounts receivable
Customers 54.219 63.837
----------------------------------------------------------------------
Other accounts receivable 77.984 76.357
----------------------------------------------------------------------
Prepaid expenses 9.746 10.165
----------------------------------------------------------------------
Total current assets 172.762 185.201
======================================================================
VESSELS, EQUIPMENT AND PROPERTY 139.250 201.566
======================================================================
INVESTMENT IN TFM 401.346 406.309
======================================================================
OTHER ASSETS 44.660 43.134
======================================================================
DEFERRED TAXES 144.883 134.062
======================================================================
ASSETS OF DISCONTINUING BUSINESS 0.500 0.500
======================================================================
903.401 970.772
----------------------------------------------------------------------
CURRENT LIABILITIES
Bank loans and current maturities of
long term liabilities 212.684 68.021
----------------------------------------------------------------------
Suppliers 16.091 34.916
----------------------------------------------------------------------
Other accounts payable and accrued
expenses 106.696 135.295
----------------------------------------------------------------------
Total current liabilities 335.471 238.232
======================================================================
REVENUE AND COSTS OF VOYAGES
IN PROCESS-NET. 0.188 0.008
======================================================================
DEFERRED TAXES 20.933 28.798
======================================================================
CONVERTIBLE NOTES 32.500
======================================================================
LONG-TERM LIABILITIES
Bank loans and other obligations 202.776 380.096
----------------------------------------------------------------------
Other long-term liabilities 43.526 39.123
----------------------------------------------------------------------
Total long-term liabilities 246.302 419.219
======================================================================
635.394 686.257
----------------------------------------------------------------------
MINORITY INTEREST 87.242 107.584
======================================================================
STOCKHOLDER'S EQUITY
Capital stock 121.158 121.158
----------------------------------------------------------------------
Retained earnings 77.364 73.530
----------------------------------------------------------------------
Initial translation loss (17.757) (17.757)
----------------------------------------------------------------------
180.765 176.931
----------------------------------------------------------------------
903.401 970.772
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
Grupo TMM, S.A. de C.V. and subsidiaries
Statement of Cash Flow (without Railroad)
- millions of dollars -
----------------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
----------------------------------------------------------------------
OPERATIONS
Income before results
from discontinuing
business (3.579) 2.467 8.366 7.028
----------------------------------------------------------------------
Charges (credits) to
income not affecting
resources:
Depreciation &
amortization 6.556 6.970 13.092 13.319
----------------------------------------------------------------------
Interest in TFM (3.702) (11.467) (7.898) (21.037)
----------------------------------------------------------------------
Minority interest 4.968 7.499 10.066 12.410
----------------------------------------------------------------------
Results on sale of
assets (0.483) (8.209) (0.479)
----------------------------------------------------------------------
Deferred income
taxes (3.733) 0.146 (15.369) (5.107)
----------------------------------------------------------------------
Other non-cash items 1.934 2.410 3.809 4.666
----------------------------------------------------------------------
Total non-cash items 6.023 5.075 (4.509) 3.772
----------------------------------------------------------------------
Changes in assets
& liabilities (6.641) (24.460) (6.997) (22.704)
----------------------------------------------------------------------
Total adjustments (0.618) (19.385) (11.506) (18.932)
----------------------------------------------------------------------
Net cash (used in)
provided by
operating activities (4.197) (16.918) (3.140) (11.904)
======================================================================
INVESTMENT
Proceeds from sales
of assets (net) 0.367 8.094 0.677 9.089
----------------------------------------------------------------------
Payments for purchases
of assets (2.957) (11.479) (8.758) (24.587)
----------------------------------------------------------------------
Proceeds from
discontinued business
(net) 2.440 31.996 2.440
----------------------------------------------------------------------
Dividends paid to
minority shareholders (0.022) (0.673) (0.022)
----------------------------------------------------------------------
Dividends from
non-consolidates
subsidiaries 1.173
----------------------------------------------------------------------
Refound Dividends
and tax to Gtfm (20.000)
----------------------------------------------------------------------
Purchase & sale of
marketable securities
(net) 0.275 0.275
----------------------------------------------------------------------
Net cash (used in)
provided by investment
activities (2.590) (0.692) 4.415 (12.805)
======================================================================
FINANCING
Short-term borrowings
(net) (34.591) (1.882) (36.203) (3.668)
----------------------------------------------------------------------
Principal payments
under capital lease
obligations (0.018) (0.016) (0.036) (0.032)
----------------------------------------------------------------------
(Repurchase) sale of
accounts receivable
(net) (1.070) (1.070)
----------------------------------------------------------------------
Repayment of long-term
debt (0.248) (0.495) (0.438)
----------------------------------------------------------------------
Proceeds from convertible
notes 32.500 32.500
----------------------------------------------------------------------
Net cash (used in)
provided by financing
activities (3.427) (1.898) (5.304) (4.138)
======================================================================
Net increase (decrease)
in cash (10.214) (19.508) (4.029) (28.847)
----------------------------------------------------------------------
Cash at beginning of
period 41.027 44.870 34.842 54.209
----------------------------------------------------------------------
Cash at end of period 30.813 25.362 30.813 25.362
----------------------------------------------------------------------
(a) Prepared in accordance with International Accounting Standards
GRUPO TFM REPORTS OPERATIONAL RESULTS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2002 Grupo TFM's consolidated net revenues for the three months ended June June: see month. 30, 2002 were $186.3 million, which represents an increase of $14.5 million, or 8.4 percent, from revenues of $171.9 million for the same period in 2001. This figure includes $12.8 million from Mexrail operations, which are consolidated for the first time with TFM in the second quarter. Second quarter 2002 consolidated revenues were the highest recorded in any quarter during TFM's operating history despite the impact of the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of the Mexican economy and foreign trade with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . TFM's growth in the second quarter was primarily due to revenue increases in the chemical segment, where plastics and fertilizing products were converted from truck to rail, and in spite of industry deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. and restricted imports of grain attributed to record crops in northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. Mexico. This segment also benefited from the improvement in the use of pet coke by CEMEX CEMEX Cementos Mexicanos . The metals and minerals and intermodal product segments also contributed to growth during the second quarter. Consolidated operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. during the second quarter of 2002 increased to $139.5 million, from $128.3 million for the same period in 2001. The increase was due to the consolidation of the Mexrail operations, which represented $12.7 million of additional operating expenses during the second quarter. Without the additional expense from Mexrail, TFM's operating expenses would have decreased compared with the same period of the previous year. TFM reduced operating expenses during the second quarter as a result of various cost reductions, including decreased crewmembers in secondary lines, renegotiated agreements with suppliers and improved efficiency of operations, which contributed to reduced labor and car hire. The company also benefited from a decrease in fuel prices. Consolidated operating profit for the second quarter of 2002 was $46.8 million, representing an increase of $3.2 million from the operating profit for the second quarter of 2001; this increase includes $0.1 million from Mexrail operations. The operating ratio (operating expenses as a percentage of revenues) for the second quarter of 2002 was 74.9 percent including Mexrail operations; the consolidated operating ratio for the second quarter of 2002 without Mexrail was 72.8 percent. First Six Months Consolidated net revenues for the six months ended June 30, 2002 were $343.8 million, which represents an increase of $15.8 million, or 4.8 percent, from the six months ended June 30, 2001, including the $12.8 million from Mexrail operations mentioned above. Consolidated operating expenses were $261.2 million for the period, which represents an increase of $8.4 million, or 3.3 percent, from the six months ended June 30, 2001, including the $12.7 million from Mexrail operations during the second quarter of 2002. The increase in operating expenses for the first six months of 2002 is due primarily to the consolidation of Mexrail during the second quarter of 2002. Accordingly, consolidated operating profit for the six months ended June 30, 2002 was $82.5 million, resulting in an operating ratio of 76.0 percent. The consolidated operating ratio without Mexrail was 74.9 percent. Financial Expenses Net financial expenses incurred in the six months ended June 30, 2002 were $41.2 million, including $22.6 million from the amortization of discount debentures. TFM recognized an $11.3 million foreign exchange loss resulting from the depreciation of the Mexican peso relative to the U.S. dollar during the period. Net financial expenses included $1.1 million of interest expenses from the new $180.0 million bond maturing in June 15, 2012. Net Income Net income for the six months ended June 30, 2002 was $20.5 million, reflecting a deferred income tax credit of $2.5 million. This credit is mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the variation in the peso-dollar change rate used by TFM for tax purposes during this period. EBITDA EBITDA for the six months ended June 30, 2002 was $125.5 million, which represents an increase of $9.0 million or 7.7 percent from the first half of 2001. From this figure, Mexrail's EBITDA was $0.5 million. EBITDA margin (EBITDA as a percentage of revenues) for the six months ended June 30, 2002 was 36.5 percent. Acquisition Of Mexrail During March 2002, TFM acquired the Mexrail Company that includes the Texmex railroad and the Laredo Laredo (lərā`dō), city (1990 pop. 122,899), seat of Webb co., S Tex., on the Rio Grande; founded 1755, inc. 1852. It is a port of entry on the U.S.-Mexican border, with a thriving export-import trade and a tourist industry. railroad-bridge. The balance sheet shown in this release includes the consolidation of Mexrail into TFM. Liquidity And Capital Resources As of June 30, 2002, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying decreased 14.2 percent to $188.7 million, from $ 219.9 million at December December: see month. 31, 2001. This decrease is a result of the recovery of a large interline in·ter·line 1 tr.v. in·ter·lined, in·ter·lin·ing, in·ter·lines To insert between printed or written lines. in account for $17.5 million, tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. and the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of the dividend that was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. null A character that is all 0 bits. Also written as "NUL," it is the first character in the ASCII and EBCDIC data codes. In hex, it displays and prints as 00; in decimal, it may appear as a single zero in a chart of codes, but displays and prints as a blank space. . Outstanding trade receivables were below 30 days, which meets TFM's objectives in the management of working capital. Accounts receivable balance includes, among other items, VAT (value-added tax value-added tax (VAT), levy imposed on business at all levels of the manufacture and production of a good or service and based on the increase in price, or value, provided by each level. ) and IEPS IEPS International Education Programs Service (US) IEPS Institute for Education Policy Studies IEPS Institute for Environmental Policy and Stewardship (Canada) (fuel tax) credits from ongoing business transactions. As of June 30, 2002, accounts payable and accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. were $82.8 million, a decrease of $13.3 million or 13.9 percent from December 31, 2001. TFM made capital expenditures of $20.6 million during the second quarter of 2002. Gross capital expenditures for the first six months of 2002 were $34.2 million and were invested in the improvement of TFM lines, the addition of operating capacity, intermodal terminals and ongoing investments. As of June 30, 2002, TFM had an outstanding net debt balance of $840.8 million, including $295 million of U.S. commercial paper, and $229.9 million of cash and cash equivalents. TFM refinanced its Senior Secured Credit Facility through a U.S. Commercial Paper Program backed by letter of credit in September 2000, resulting in a substantial reduction in debt service. During June 2002, TFM issued $180 million of 12.50 percent senior notes due 2012. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from this new debt will be used during July 2002, to acquire the shares of Grupo TFM consisting of 24.6 percent of the total capital stock, held by Ferrocarriles Nacionales de Mexico. This report may contain historical information and forward-looking statements regarding the current belief or expectations of the company concerning the company's future financial condition and results of operations. The words "believe", "expect" and "anticipate" and similar expressions identify some of these forward-looking statements. Statements looking forward in time involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the company's high degree of leverage and its potential need for and ability to obtain additional financing; global, U.S. and Mexican economic and social conditions; the effect of the North American Free Trade Agreement ("NAFTA") on the level of U.S.-Mexico trade; the company's ability to convert customers from using trucking services to rail transport services; competition from other rail carriers and trucking companies in Mexico; the company's ability to control expenses; the effect of the company's employee training, technological improvements and capital expenditures on labor productivity, operating efficiencies and service reliability; and changes in governmental regulation and policy. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of their respective dates. The company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, reference should be made to the company's filings with the Securities and Exchange Commission, including the company's most recent Annual Report on Form 20-F.
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiaries
Consolidated Statement of Income
( Amounts expressed in thousands of US dollars )
( Unaudited )
Three months ended Six months ended
June 30, June 30,
--------------------------------------------
2002 (1) 2001 2002 (1) 2001
--------------------------------------------
Transportation revenues 186,315 $171,861 343,787 $327,946
-------- -------- -------- --------
Operating expenses (118,977) (109,115) (220,825) (214,548)
Depreciation and
amortization (20,518) (19,171) (40,408) (38,265)
-------- -------- -------- --------
(139,495) (128,286) (261,233) (252,813)
-------- -------- -------- --------
Operating profit 46,820 43,575 82,554 75,133
-------- -------- -------- --------
Other (expenses) income -
net (1,488) (3,295) (7,260) 49,747
-------- -------- -------- --------
Financial expenses - net (21,181) (20,789) (41,171) (42,794)
Exchange profit (loss) -
net (12,127) 1,110 (11,312) 4,156
-------- -------- -------- --------
Net comprehensive
financing cost (33,308) (19,679) (52,483) (38,638)
-------- -------- -------- --------
Income before taxes
and minority interest 12,024 20,601 22,811 86,242
Deferred income tax (519) 16,953 2,545 (17,945)
-------- -------- -------- --------
Income before minority
interest 11,505 37,554 25,356 68,297
Minority interest (1,888) (7,724) (4,823) (13,870)
-------- -------- -------- --------
Net income for the period $9,617 $29,830 $20,533 $54,427
-------- -------- -------- --------
(1) It includes second quarter figures of Mexrail, Inc. and
Subsidiary
The consolidated financial statements were prepared in accordance
with International Accounting Standards
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiaries
Consolidated Balance Sheet
( Amounts expressed in thousands of US dollars )
( Unaudited )
June 30, December 31,
2002 (1) 2001
-------- ------------
Assets
Current assets
Cash and cash equivalents $229,935 $52,786
Accounts receivable - net 188,726 219,939
Materials and supplies 19,511 22,262
Other current assets 8,837 9,645
---------- ----------
Total current assets 447,009 304,632
Due from Mexican Government - net 82,141 81,892
Concession, property and equipment - net 1,823,588 1,773,361
Other assets 76,343 11,942
Deferred income tax 132,714 133,487
---------- ----------
Total assets $2,561,795 $2,305,314
---------- ----------
Liabilities and stockholders' equity
Current liabilities
Commercial paper and capital
lease due within one year $295,050 $264,936
Accounts payable and accrued expenses 82,794 96,125
---------- ----------
Total current liabilities 377,844 361,061
Long-term debt and capital lease
obligation 775,635 573,075
Other non-current liabilities 32,551 20,769
---------- ----------
Total long-term liabilities 808,186 593,844
---------- ----------
Total liabilities 1,186,030 954,905
---------- ----------
Minority interest 396,412 391,589
---------- ----------
Stockholders' equity
Capital stock 807,008 807,008
Retained earnings 172,345 151,812
---------- ----------
Total stockholders' equity 979,353 958,820
---------- ----------
Total liabilities and stockholders' equity $2,561,795 $2,305,314
---------- ----------
(1) It includes Mexrail, Inc. and Subsidiary
The consolidated financial statements were prepared in accordance
with International Accounting Standards. The recording of Mexrail
acquisition is pending to be reviewed by the accountants.
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiaries
Consolidated Statement of Cash Flows
( Amounts expressed in thousands of US dollars )
( Unaudited )
Three months ended Six months ended
--------------------------------------------
June 31 June 31
--------------------------------------------
2002 (1) 2001 2002 (1) 2001
--------------------------------------------
Cash flows from operating
activities:
Net income for the period $9,617 $29,830 $20,533 $54,427
-------- -------- -------- --------
Adjustments to reconcile
net income to net cash
provided by operating
activities :
Depreciation and
amortization 20,518 19,171 40,408 38,265
Discount on senior
discount debentures 10,528 11,315 22,560 22,048
Amortization of deferred
financing costs 3,462 786 4,256 1,569
Other non cash item 3,271 (7,896) 5,044 (22,670)
Changes in working
capital (51,099) (20,420) (25,716) (33,159)
-------- -------- -------- --------
Total adjustments (13,320) 2,956 46,552 6,053
-------- -------- -------- --------
Net cash provided by
operating activities (3,703) 32,786 67,085 60,480
-------- -------- -------- --------
Cash flows from investing
activities:
Investment in Mex-Rail 0 0 (64,000) 0
Acquisitions of property
and equipment - net (20,617) (10,957) (34,224) (25,316)
Sale of equipment 128 77 224 128
-------- -------- -------- --------
Net cash used in investing
activities (20,489) (10,880) (98,000) (25,188)
-------- -------- -------- --------
Cash flows from financing
activities:
Proceeds from
(payments of) commercial
paper - net (17) 99 29,928 (1,644)
Proceeds from capital
lease obligations 0 0 0 2,980
Proceeds from revolving
credit facility - net 177,491 0 177,491 0
Principal payments under
capital lease
obligations 0 0 0 (4,759)
-------- -------- -------- --------
Net cash (used in)
provided by financing
activities 177,474 99 207,419 (3,423)
-------- -------- -------- --------
Increase in cash and cash
equivalents 153,282 22,005 176,504 31,869
Cash and cash equivalents
Beginning of period 76,008 42,902 52,786 33,038
-------- -------- -------- --------
End of period $229,290 $64,907 $229,290 $64,907
-------- -------- -------- --------
(1) It includes second quarter figures of Mexrail, Inc. and
Subsidiary
The consolidated financial statements were prepared in accordance
with International Accounting Standards. The recording of Mexrail
acquisition is pending to be reviewed by the accountants.
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