TMM RESULTS ARE STRONG FOR 2ND STRAIGHT QUARTER

TMM RESULTS ARE STRONG FOR 2ND STRAIGHT QUARTER

Transportacion Maritima Mexicana (TMM) posted strong operational statistics for the second consecutive quarter of 1995, despite devaluation-related exchange losses earlier in the year.

"It was an excellent quarter," said Pedro Sanchez Mejorada, TMM's director of investor relations here.TMM, Mexico's largest steamship line and integrated transportation company, released second-quarter earnings late last week showing net consolidated

revenues of $186.1 million. That is a 3.4 percent decrease from $192.6 million in second-quarter 1994, but $12.1 million higher than first-quarter net consolidated revenue of $173.8 million.

The ship line's second-quarter report attributed the decline in quarterly net consolidated revenue figures compared with 1994 in part to decreases in its ground transportation traffic. But another factor was that last year's numbers were pumped up by folding into the books subsidiary Global Reefer Carriers and its subsidiaries.

Accordingly, consolidated gross profit for the second quarter was $30.2 million compared with $33.3 million in the same three months of 1994.

Consolidated operating income for the second quarter was $16.1 million, resulting in a operating profit margin of 8.7 percent or an increase of $3.9 million over last year's second quarter. TMM posted a $16 million operating profit in the first quarter of 1995, which was offset by exchange-rate losses of $11.9 million following December's peso crisis that carried over into January and resulted in a net loss of $4.3 million in the first quarter.

Second-quarter net income was $11.3 million, slightly over the $11 million second-quarter net income posted in the same three months of 1994.

"It seems like they are heading in the right direction," said Alvaro Shiraishi, an analyst who follows TMM for Bursamex Casa de Bolsas in Mexico City and has said the company needs stronger financial management.

Revenue derived from TMM's liner services increased in the quarter to $105.3 million, surpassing first-quarter revenue of $93.3 million. The $198.6 million in liner revenue for the first six months of 1995 is up 4.5 percent from the first half of last year. TMM attributed the increase to traffic gains in the Far East service, as well as in the Mediterranean and west coast of Latin America.

"Liner service transported 166,000 TEUs (20-foot equivalent unit containers), which was 13.4 percent higher than the volume transported in the same period in 1994," the report said of six-month tallies.

Gross profit in the liner service for the first half of 1995 amounted to $25.8 million, a 22.3 percent increase over $21.7 million in gross profit for the six-month period of 1994. Gross profit from liner services in the first quarter had been up 8.1 percent over the first quarter of 1994.

But while liner services were healthy, land transport was the big loser for the second quarter, due primarily to Mexico's economic crisis that followed the country's currency collapse. With import purchasing power reduced nearly in half, consumer goods and manufacturers' orders have nearly evaporated.