Executive Summary / Key Takeaways

• Grupo TMM is undergoing a strategic transformation, shifting its focus to high-growth maritime and maritime infrastructure sectors in Mexico, evidenced by significant investments in specialized vessels and a new floating dock.
• The company delivered strong financial performance in 2024, with consolidated revenues increasing by 43.90% and a notable swing from a transportation loss in 2023 to a profit of 156.40 million pesos, driven by maritime operations.
• Strategic digitalization initiatives, including new CRM, HelpDesk, and terminal management systems, are enhancing operational efficiency and cybersecurity, forming a critical technological backbone for future growth.
• Key risks include exposure to volatile fuel prices, U.S. trade policy shifts, and the evolving landscape of Mexican energy reforms, alongside the need to fully remediate identified material weaknesses in internal controls.
• The outlook is positive, with management focused on expanding its maritime fleet, leveraging its new infrastructure, and developing strategically located assets in Tuxpan for liquid and multipurpose terminals, underpinned by a commitment to cost control and sustainability.

A Mexican Logistics Powerhouse Reimagines its Future

Grupo TMM, S.A.B. (GTMAY), a long-standing logistics and transportation leader in Mexico, is strategically repositioning itself to capitalize on dynamic shifts within the Mexican economy and energy sector. Founded in 1958, the company has evolved from its origins in maritime transport, adapting through various economic cycles and regulatory changes, including the impact of NAFTA and its successor, the USMCA. Today, GTMAY's core business spans maritime operations, maritime infrastructure, ports, terminals, logistics, and warehousing, serving a diverse client base predominantly within Mexico.

The company's overarching strategy centers on strengthening its maritime and logistics sectors, maintaining efficient and profitable operations, and fortifying its balance sheet. This strategic pivot is particularly evident in its recent investments and operational focus. GTMAY aims to enhance its competitive standing by leveraging its deep regional expertise, integrated service offerings, and a renewed emphasis on technological advancement.

Technological Edge and Operational Modernization

Grupo TMM's commitment to technological differentiation is a foundational element of its strategy. The company has implemented a comprehensive cloud computing strategy to optimize resources and improve operational efficiency, supported by robust cybersecurity measures. This includes continuous improvements to platforms such as ARCADIA v2.0, its Customer Relationship Management (CRM) system, which is increasingly utilized by employees to streamline business relationships. The Apolo 2024 HelpDesk system provides precise control over technical support and infrastructure reports, integrating statistics and a dynamic dashboard for activity summaries.

Further enhancing its operational capabilities, the ADIRAN system for Yard and Container Terminal Management is undergoing functional testing for implementation in the first half of 2025. This upgrade is significant, replacing eight servers and multiple legacy applications that have been in operation for over 16 years. Additionally, two new systems, SYRIUS for monthly vessel activity recording and a Document Management System, are slated for implementation in the first half of 2025. These systems are designed to systematize processes, minimize data entry errors, and prevent information loss. From an infrastructure perspective, servers are being migrated to virtualized environments, reducing costs and increasing operational agility. The "so what" for investors is clear: these technological investments are designed to create a more efficient, flexible, and secure operational backbone, directly contributing to cost savings, improved service delivery, and a stronger competitive moat in a rapidly evolving digital landscape.

Strategic Expansion in Maritime and Infrastructure

GTMAY's recent operational details underscore its strategic focus. The Maritime Operations division, which represented 73.20% of consolidated revenues in 2024, saw a substantial 61.30% increase in revenues to 1,283 million pesos. This growth was primarily driven by the expansion of the "Loderos" (mud vessels) business, with two new specialized vessels commencing operations in the first quarter of 2024, bringing the total fleet of such vessels to five. These vessels are crucial for the generation, transportation, conditioning, and recovery of fluids in offshore oil wells, directly benefiting from contracts with PEMEX. The company also secured a new fuel oil transportation contract, further boosting this segment's performance.

The Maritime Infrastructure Operations segment also demonstrated robust growth, with revenues increasing by 30.80% to 262.20 million pesos in 2024. This was largely due to servicing a vessel undergoing major repairs. A significant development in January 2025 was the acquisition of a new 6,600-metric-ton floating dock, financed by Bancomext for 16.80 million dollars. This new dock expands the company's capabilities, allowing it to access 94% of the market for larger vessels and is expected to increase revenues in the medium to long term. Management plans to further increase installed capacity, potentially through additional docks or facilities, to service a wider range of vessels, including cruise ships. These investments in specialized maritime assets and infrastructure are critical for GTMAY to capitalize on opportunities within Mexico's energy sector and broader maritime trade.

Financial Performance and Liquidity Strength

Grupo TMM's financial performance in 2024 reflects the positive impact of its strategic initiatives. Consolidated transportation revenues surged by 43.90% to 1,753.60 million pesos in 2024, up from 1,218.60 million pesos in 2023. This significant revenue growth translated into a remarkable turnaround in transportation results, moving from a loss of 29.10 million pesos in 2023 to a profit of 156.40 million pesos in 2024. This improvement was largely attributable to the expanded "Loderos" fleet, new fuel oil transportation contracts, higher profits from maritime infrastructure, and optimized corporate expenses.

The company reported a net income of 114.50 million pesos for 2024, a substantial increase from 20.20 million pesos in 2023.

Cash flows from operating activities also saw a significant boost, reaching 240.60 million pesos in 2024, compared to 89.10 million pesos in 2023. This enhanced operational cash generation is crucial for funding ongoing capital expenditures and debt servicing.

As of March 31, 2025, total debt stood at 1,502 million pesos, with 87% denominated in U.S. dollars, a strategy employed to manage foreign currency risk given the U.S. dollar-denominated nature of a large proportion of its revenues. The debt-to-equity ratio as of December 31, 2024, was a manageable 0.34, and the company remained in compliance with all restrictive covenants in its financing agreements.

Competitive Landscape and Strategic Positioning

Grupo TMM operates in a highly competitive environment across its various segments. In maritime operations, particularly offshore vessels, it faces competition from established players like Tidewater de Mexico (TDW), Naviera Bourbon Tamaulipas, and Hornbeck Offshore Services de Mexico (HOS). The company's competitive advantages in this segment include the flying of the Mexican flag, which grants preferential treatment under Mexican Navigation and Maritime Trade Law, and its ability to provide and maintain logistical support for complex projects. In parcel tankers, Stolt-Nielsen Transportation Group Ltd. is a primary rival, while product tankers see competition from global entities like Scorpio Tankers (STNG) and Maersk Tankers, alongside PEMEX Refinación.

In maritime infrastructure, GTMAY's shipyard competes with Talleres Navales del Golfo and Astilleros Mexicanos JP. Here, quality, repair times, geographic location, and customer service are paramount competitive factors. The new 6,600-metric-ton floating dock significantly enhances GTMAY's capacity and market access, positioning it to capture a larger share of vessel repair services. For ports, terminals, and logistics, competitors include CICE, Hutchinson Ports (CKHUY), and SSA Mexico, with competitive factors revolving around location, customer service, experience, and operating capabilities. In logistics, the company differentiates through its integrated solutions, brand name, and state-of-the-art information technology, competing with a wide array of firms such as Car Logistics and Ceva Logistics. GTMAY's strategy of focusing on niche markets and leveraging its integrated service offerings allows it to carve out a distinct position against larger, more globally diversified competitors.

Risks and Forward Outlook

Despite a strong performance in 2024, Grupo TMM faces several pertinent risks. The company remains exposed to the volatility of fuel expenses, which represent a significant portion of its parcel tanker operating costs. Changes in U.S. trade policies, particularly following President Donald Trump's reelection in 2024, have already generated trade tensions impacting maritime logistics in Mexico, potentially affecting trade flows and increasing costs. The ongoing Mexican energy reforms, which restore CFE and Pemex to state-owned enterprise status, introduce regulatory uncertainty, although management believes these reforms could ultimately increase Mexican oil and gas production, positively impacting GTMAY's business.

A material weakness in internal control over financial reporting was identified as of December 31, 2024, related to insufficient internal accounting personnel and segregation of duties. Management has initiated a remediation plan, including enhancing the accounting team, improving segregation of duties, and implementing expanded monitoring. While this did not result in misstatements of past financial statements, its successful remediation is crucial for investor confidence.

Looking ahead, management expects to continue strengthening its maritime-related businesses by adding specialized vessels and improving the utilization of its chemical tankers. The new floating dock is anticipated to drive market expansion and client acquisition in maritime infrastructure. In logistics, ports, and terminals, the focus remains on efficient and profitable operations, particularly in the automotive sector and through the development of liquid and multipurpose terminals in Tuxpan. A "Sustainable TMM" initiative aims for energy self-sufficiency through solar panels and the potential production of green fuels, aligning with broader environmental trends. These strategic initiatives, coupled with disciplined cost control, are expected to drive financial strengthening and project implementation in the short to medium term.

Conclusion

Grupo TMM stands at a pivotal juncture, demonstrating a clear strategic direction and a compelling financial resurgence in 2024. The company's focused investments in specialized maritime assets and infrastructure, particularly the new mud vessels and floating dock, are directly translating into increased revenues and profitability within its core maritime and maritime infrastructure segments. Its ongoing digital transformation efforts are laying the groundwork for enhanced operational efficiency and a stronger competitive posture.

While challenges persist, including macroeconomic volatility, geopolitical shifts, and the need to fully address internal control weaknesses, GTMAY's management is actively pursuing a strategy of targeted growth, operational optimization, and diversification. The company's ability to leverage its deep regional expertise and integrated service model, coupled with its commitment to technological advancement and sustainability, positions it to capitalize on Mexico's evolving energy landscape and broader trade dynamics. For discerning investors, Grupo TMM represents a compelling opportunity in a specialized logistics and transportation provider poised for continued growth and value creation.