Maritime Drives Growth at Grupo TMM

Grupo TMM S.A.B. (TMM) 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.

Despite the global recession in 2009, TMM has continued to record solid EBITDA growth. The firm is committed to modernizing its fleet, which will in turn maximize margins. TMM’s offshore and product tanker fleet generally works with long and medium-term contracts, which have predictable cash flows.

Maritime’s second-quarter 2010 revenues grew 8.4% year over year, mainly due to increased revenues at offshore vessels attributable to higher average tariffs per day and more vessels in operation. Operating profit in the Maritime division grew 14.3% in the 2010 second quarter compared to the previous year’s second quarter, mainly as a result of a significant profit increases at product tankers, due primarily to higher average daily rates and to having all seven vessels working with time-charter contracts.

On the financial front, 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).
 
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