GTMAY: 2Q15 Results Show Strength in Maritime Segment
By Marla Backer Grupo TMM (GTMAY) reported second quarter 2015 results yesterday. The results show significant strength in the company’s Maritime segment. Driven primarily by a 34.4% year-over-year advance in Maritime revenue, TMM registered a 28.0% improvement in total revenue to P$836.4 million compared to P$653.2 million recorded in the second quarter of 2014. We believe TMM is well positioned to benefit from the opening of Mexico’s energy sector. However, the steep decline in oil prices could cause a longer than expected delay of the opportunities energy reform is expected to generate, in our view. Adjusted Operating Income Increased TMM’s Ports and Terminals segment has been hurt by lower revenues in the Automobile segment, as vehicle exports to South America have been constrained by an agreement between Mexico and Brazil limiting auto exports to Brazil. With lower revenue from the Ports and Terminals segment and higher overall operating costs, the company’s operating income of P$76.5 million was down slightly (-2.5%) compared to the second quarter of 2014. However, on an adjusted basis excluding the sale of vessels in the Maritime segment, consolidated operating income would have been P$140.1 million and P$59.5 million in 2Q15 and 2Q14 respectively, representing a 135.5% year-over-year improvement. Consolidated EBITDA of P$257.5 million was up 12.7%, while free cash flow of P$75.2 million more than doubled (+108%). Strengthening the Balance Sheet At the end of June 2015, the company’s net debt stood at P$9,606.4 million, down from P$10,245.2 million at the end of December 2014. TMM expects to complete a recapitalization in 2H 2015, designed to strengthen its balance sheet and enhance its financial flexibility as it prepares to leverage the opportunities that Mexico’s energy reforms are expected to generate. READ THE LATEST FULL RESEARCH REPORT HERE SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR and to view our disclaimer.
