Grupo TMM Reports Fourth-Quarter and Full-Year 2004 Financial Results

Grupo TMM Reports Fourth-Quarter and Full-Year 2004 Financial Results

    Business Editors

    MEXICO CITY--(BUSINESS WIRE)--Feb. 24, 2005--Grupo TMM, S.A. (NYSE:TMM):

--	TFM reported as discontinuing operation
--	Management outlines strategic steps to enhance value

    Grupo TMM, S.A. (NYSE:TMM) (BMV:TMM A; "TMM"), a Mexican multi-modal transportation and logistics Company, reported revenues from operations of $67.8 million for the fourth quarter of 2004 compared to $59.0 million for the same period of 2003. Improved revenues were reported at Specialized Maritime, Ports and Logistics operations. Fourth-quarter 2004 operating income increased from $0.3 million in 2003 to $0.7 million in 2004. Net loss in the fourth quarter after discontinuing operations was $13.1 million in 2004, or $0.23 cents per share, compared to a net loss in 2003 of $66.3 million, or $1.16 per share. Fourth-quarter 2004 selling, general and administrative (SG&A) costs, including restructuring charges, decreased $0.3 million, or 3.6 percent, compared to the same period of last year and reflected cost savings associated with the completion of the Company's debt restructuring.
    For the 12 months of 2004, revenues from operations were $251.0 million compared to $226.9 million for the same period of 2003. Improved revenues were reported at all Grupo TMM divisions. Operating income in the period improved $6.4 million, from an operating loss of $2.3 million in 2003 to operating income of $4.1 million in 2004. Net results after discontinuing operations for the 2004 full year improved $63.3 million from the year-earlier period. SG&A costs, including restructuring charges, for the full year of 2004 decreased $7.6 million, or 23.2 percent, over the prior-year period mainly due to employee overhead reductions.

    TFM FOURTH-QUARTER AND YEAR-END RESULTS (without Tex Mex)

    Fourth-quarter revenues increased $13.5 million, or 8.4 percent, from $160.0 million in 2003 to $173.5 million in 2004, primarily impacted by revenue expansions in all business categories with the exception of intermodal. Auto revenues in the fourth quarter improved primarily due to the expansion of intra-Mexican movement caused by truck-to-rail conversion. For the full year, revenues improved 3.7 percent, or $24.0 million. Operating profit during the 2004 fourth quarter increased $2.0 million as compared to last year, impacted primarily by $9.7 million in additional fuel costs (a 52.0 percent increase).
    The following chart reflects the rail division's segment results, comparing the fourth quarter and the full year of 2004 with the same periods of 2003:

Fourth-Quarter Percent Full-Year Percent Revenues Change Revenues Change ---------------------------------------------------------------------- Chemical 13.1% 12.0% ---------------------------------------------------------------------- Industrial 14.7% 6.7% ---------------------------------------------------------------------- Cement, Metals and Minerals 13.8% 10.2% ---------------------------------------------------------------------- Agroindustrial 1.8% 0.3% ---------------------------------------------------------------------- Intermodal (8.1%) (3.7%) ---------------------------------------------------------------------- Automobile 14.0% (3.8%) ----------------------------------------------------------------------

    GRUPO TMM NON-RAILROAD ASSET PERFORMANCE

    Specialized Maritime provides international and coastal maritime transportation services for liquid cargoes, harbor towing, and logistical support to the oil production and exploration sectors. During the fourth quarter, revenue in the division increased 1.5 percent, and operating profit increased 13.8 percent compared to the previous period of last year. On an annualized basis, revenues increased 10.1 percent, and operating profit increased 80.6 percent. These divisional results were influenced by supply ships, which serve ever-expanding Mexican oil exploration, and experienced revenue growth in the quarter of 10.2 percent and full-year revenue growth of 23.6 percent. Gross profit for this division increased 19.7 percent in the fourth quarter as contracts continued to grow. Additionally, parcel tankers revenue improved 23 percent year over year, and gross profit improved 46 percent quarter over quarter and 25.5 percent year over year, due to better chemical cargo mix and higher tariffs. Product tankers, which represent tanker opportunities to haul clean petroleum products, experienced improved revenue of 20.6 percent quarter over quarter and 12.9 percent year over year. All contracts for 2004 were renewed at higher rates, and gross profits continued to increase in spite of some off-hire time between the renewals of these contracts. In the tugboat segment, gross profit increased 10.6 percent in 2004 compared to last year.
    In the Ports and Terminals division revenues improved 42.1 percent quarter over quarter and 24.0 percent year over year. For the full year, Acapulco booked 109 cruise ship calls, 55 of which occurred in the fourth quarter. The port has 155 cruise ship calls already scheduled for 2005. Revenues in the cruise ship segment increased 79.4 percent quarter over quarter and 23.9 percent year over year. Additionally, in 2004, the division handled approximately 68 percent more automobile exports for Volkswagen, Chrysler and Nissan to South America and Asia than in 2003, increasing revenues by 45.5 percent. In the fourth quarter of 2004, car-handling revenues increased 80.4 percent compared to the same quarter of last year.
    In the Logistics division, revenues increased substantially during the fourth quarter, improving 27.7 percent due primarily to start-up services related to the movement of Ford vehicles within Mexico. Significant start-up costs were incurred in the quarter, but should come in line with expectations during the first and second quarters of 2005. The Ford contract represents the first of many anticipated "total supply chain outsourced conversions" for TMM Logistics.

    MANAGEMENT ASSESSMENT OF TFM SALE

    Javier Segovia, president of Grupo TMM, described elements of the Company's Strategic Program for Enhancing and Accelerating Value for 2005. Focusing on the first step of that plan, the sale of Grupo TFM to Kansas City Southern, Mr. Segovia stated, "We accomplished several important steps in the fourth quarter of 2004 and the first month of 2005, and I believe we have much to be proud of. As of today, the sale of TFM to KCS is worth approximately $707 million, which includes $200 million in cash, $47 million in a five percent promissory note that will be paid to TMM in June 2007, 18 million shares of KCS common stock now valued at over $350 million, and an additional $110 million in cash and stock upon completion of a settlement involving the VAT and Put lawsuits. Through this sale, TMM will be the largest individual shareholder of KCS. KCS shareholders are expected to approve the purchase in late March. Although we do not anticipate nor desire at this time to sell any portion of our KCS stock, stock sales could occur through registrations, which would be enacted by KCS upon the request of TMM.
    "By monetizing our ownership interest in TFM through the sale to KCS," Segovia continued, "TMM's balance sheet will improve dramatically, we will have much greater flexibility than we have had in the last several years to focus on opportunities to enhance TMM's operations, and we will free the Company from litigation, allowing management to focus all of its efforts on value enhancement for stakeholders. With debt at a predictable level because of our recent bond refinancing, the proceeds of the asset sale will provide the Company with not only real debt reduction, but with access to working and growth capital, as well as alternative methods for acquiring additional capital to purchase operating entities, enhance cash flow, or to grow existing TMM businesses.
    "As you can see from the news released earlier this week, we are awaiting the Mexican Federal government's compliance with the decisions of the court system, and we expect that a VAT-Put settlement will take place in the near term. Once a settlement is completed and announced, TMM will receive a payment from KCS of $35 million in cash, an additional payment of $35 million in stock, and the remaining $40 million held as a tax contingency note payable within five years. We do not anticipate any tax liability issues, nor do we expect any transitional issues during due diligence."

    IMPROVED BALANCE SHEET

    As a result of the sale of TFM to KCS, the Company's equity value will improve by $263 million, and its financial obligations will be reduced by $160 million. Interest costs under the terms of its remaining debt will be managed with cash flow from existing operations and from new cash flows anticipated in 2005 from expanded operations. The Company intends to grow its existing operations with capital raised through the use of long-term bankable contracts at Special Maritime and at Ports, which will allow for the refinancing of existing assets, and which can, in turn, immediately improve operating results. Segovia commented, "Our current objective is to defend the potential accretive value of the KCS shares and to grow existing businesses in order to exceed interest coverage demands and operating profit expectations."

GRUPO TMM, S. A. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET As of December 31, 2004 (Unaudited) (amount in thousands of U.S. dollars) ----------------------------------------------------------------------

Actual Pro Forma --------- --------- Asset: ------ Cash and cash equivalents $53,227 $53,227 Others current assets 99,779 99,779 Assets available for sale 367,613 - Investment in KCS(a) - 417,000 Total non current assets 211,143 264,917 --------- --------- Total assets $731,762 $834,922 ========= =========

Liabilities and stockholders' equity: ------------------------------------- Financial obligations $540,351 $391,349 Other liabilities 121,401 121,401 --------- --------- Total liabilities 661,752 512,750 --------- ---------

Minority interest 40,184 29,417 Total stockholders' equity 29,826 292,755 --------- --------- Total liabilities and stockholders' equity $731,762 $834,922 ========= =========

Net debt: $487,124 $338,122 Net debt / Total stockholders' equity 16.33 X 1.15 X

(a) Assumption $19.00 per share of KCS stock and full receipt of the VAT/Put settlement.

    EXISTING AND ACCRETIVE OPPORTUNITIES FOR GROWTH

    TMM announced that, following the sale of TFM to KCS, it will continue to use railroad services through a contract with KCS. These services, combined with existing Ports, Logistics and Specialized Maritime operations, supply chain logistics solutions, and the Company's information platforms, provide exceptional value to customers within and to and from Mexico. Without expansion of existing operations, 2005 EBITDA is expected to reach $22 million. During the first and second quarters of 2005, the Company will provide additional details on plans to improve performance and enhance interest coverage.
    Describing opportunities to expand operations, Mr. Segovia commented, "During the past several months, we have researched extensively the impact of long-term bankable contracts as alternative methods for financing expansions of our operations. For example, Specialized Maritime has developed a consistent and reliable reputation, holding a 70 percent share of contractual revenues with chemical commodities moved via parcel tankers between Mexico and the United States. The division also holds several options to purchase currently leased vessels at competitive prices. Using future revenue streams from its significant petrochemical customers, in 2005 the Company will seek to finance the exercising of these options, thereby shifting charter expenses to lower depreciation costs and boosting EBITDA performance. By purchasing instead of leasing these vessels, EBITDA in this division could increase by approximately $24 million.
    "At Ports, the use of similar long-term bankable contracts will provide for expanded operations at Tuxpan, which is exceptionally well-positioned land for liquid transport, container ship handling, and general cargo. The opportunity to compete with other Gulf of Mexico ports by creating similar infrastructures as the Company built in 1995 at Manzanillo is a very real possibility. This expansion project could increase EBITDA by $26 million. Additional details on all of these potential opportunities will be provided during the first half of 2005."

    OVERALL VISION

    Jose F. Serrano, chairman and CEO of TMM, concluded, "The goals we stated in early 2004 were to restructure our debt, finalize the sale of TFM to Kansas City Southern and settle the VAT-Put issue. We are proud that we have accomplished the first two of these goals and are close to completing the third one. For 2005, a new company is taking shape, one with a portfolio holding the largest individual percentage of outstanding KCS shares, which continue to appreciate, and a new balance sheet, with increased equity, lower debt, and most importantly, with greater financial flexibility. We see a company capable of managing its interest costs, growing its operations in niches that are unique and profitable, and improving its operating profits in excess of its financial obligations. As all of these programs come together, our Company's value will continue to increase for both our stockholders and bondholders."

DIVISIONAL RESULTS (Under Continuing Operations) (All numbers in thousands) ----------------------------------------------------------------

Fourth Quarter 2004 ---------------------------------------------------------------------- Ports Specialized Logistics Others Total Maritime ---------------------------------------------------------------------- Revenues 7,639 31,807 28,463 (137) 67,772 ---------------------------------------------------------------------- Costs 5,838 26,824 26,975 (134) 59,503 ---------------------------------------------------------------------- Gross Result 1,801 4,983 1,488 (3) 8,269 ---------------------------------------------------------------------- Gross Margin 23.6% 15.7% 5.2% (2.2%) 12.2% ---------------------------------------------------------------------- SG & A (Estimate) 956 1,166 1,408 4,058 7,588 ---------------------------------------------------------------------- Operating Results 845 3,817 80 (4,061) 681 ---------------------------------------------------------------------- Operating Margin 11.1% 12.0% 0.3% n.a. 1.0% ----------------------------------------------------------------------

(a)Fourth Quarter 2003 ---------------------------------------------------------------------- Ports Specialized Logistics Others Total Maritime ---------------------------------------------------------------------- Revenues 5,376 31,339 22,286 (12) 58,989 ---------------------------------------------------------------------- Costs 4,291 26,306 20,239 (12) 50,824 ---------------------------------------------------------------------- Gross Result 1,085 5,033 2,047 n.a. 8,165 ---------------------------------------------------------------------- Gross Margin 20.2% 16.1% 9.2% 0.0% 13.8% ---------------------------------------------------------------------- SG & A (Estimate) 915 1,678 1,315 3,968 7,875 ---------------------------------------------------------------------- Operating Results 170 3,355 732 (3,968) 290 ---------------------------------------------------------------------- Operating Margin 3.2% 10.7% 3.3% n.a. 0.5% ----------------------------------------------------------------------

Full Year 2004 ---------------------------------------------------------------------- Ports Specialized Logistics Others Total Maritime ---------------------------------------------------------------------- Revenues 26,637 127,756 97,584 (985)250,992 ---------------------------------------------------------------------- Costs 22,740 108,660 87,131 (942)217,589 ---------------------------------------------------------------------- Gross Result 3,897 19,096 10,453 (43) 33,403 ---------------------------------------------------------------------- Gross Margin 14.6% 14.9% 10.7% (4.4%) 13.3% ---------------------------------------------------------------------- SG & A (Estimate) 3,515 4,437 5,385 15,912 29,249 ---------------------------------------------------------------------- Operating Results 382 14,659 5,068 (15,955) 4,154 ---------------------------------------------------------------------- Operating Margin 1.4% 11.5% 5.2% n.a. 1.7% ----------------------------------------------------------------------

(a)Full Year 2003 ---------------------------------------------------------------------- Ports Specialized Logistics Others Total Maritime ---------------------------------------------------------------------- Revenues 21,490 116,000 89,531 (124)226,897 ---------------------------------------------------------------------- Costs 17,302 98,853 80,443 (277)196,321 ---------------------------------------------------------------------- Gross Result 4,188 17,147 9,088 153 30,576 ---------------------------------------------------------------------- Gross Margin 19.5% 14.8% 10.2% 123.4% 13.5% ---------------------------------------------------------------------- SG & A (Estimate) 3,069 9,029 4,567 16,199 32,864 ---------------------------------------------------------------------- Operating Results 1,119 8,118 4,521 (16,046) (2,288) ---------------------------------------------------------------------- Operating Margin 5.2% 7.0% 5.0% n.a. (1.0%) ----------------------------------------------------------------------

(a) Discontinued and restated operations

    STATUS OF VALUE ADDED TAX (VAT) LAWSUIT AND MEXICAN GOVERNMENT PUT

    VAT LAWSUIT

    On November 24, 2004, the Federal Court of the First Circuit stated that it had found merit to the claim made by the Company's subsidiary, Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (TFM), regarding the form in which the Federal Treasury had issued the Special VAT Certificate. On January 26, 2005, the Mexican Fiscal Court issued a favorable bench decision upholding TFM's claim for inflation and interest.
    On February 18, 2005, TFM was served with the favorable written decision of the Fiscal Court carrying out the mandate of the Federal Court of the First Circuit dated November 24, 2004, which recognized TFM's legal right to receive the original VAT refund adjusted for inflation and interests since 1997. The Fiscal Court ordered the federal tax authorities to make the VAT refund to TFM through a single certificate issued in TFM's name, and to refund through that certificate the original amount of the VAT refund due, increased for inflation and interest since the date the tax authorities should have made the refund in 1997, until the date the refund is actually delivered to TFM. The Fiscal Court also vacated its prior decisions in this matter. Under the terms of the law, the government has 120 days to deliver the certificate, or could settle the matter through negotiation.

    GRUPO TFM PUT

    As previously stated Grupo TFM also asked for and received from a federal judge an injunction, which prevented the government from exercising its Put option. The ability of the Mexican government to exercise its Put option has been suspended indefinitely until the lawsuit is resolved.

    SALE OF TFM

    On December 15, 2004, TMM and Kansas City Southern, (KCS) entered into an amended acquisition agreement for the sale of TMM's 51 percent voting interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM") to KCS for $200 million in cash, 18 million shares of KCS common stock, $47 million in a two-year promissory note, and up to $110 million payable in a combination of cash and KCS common stock upon successful resolution of the current proceedings related to the VAT Claim and the Put with the Mexican Government. The $47 million promissory note and a portion of the $110 million contingent payment will be subject to certain escrow arrangements to cover potential indemnification claims. The boards of directors of both companies had approved the transaction.
    Consummation of the transaction was subject to the satisfaction of certain conditions, including KCS shareholder approval, TMM shareholder approval, Hart Scott Rodino waiting period, approval by the Mexican Foreign Investment Commission and the Mexican Federal Competition Commission.
    TMM shareholder approval was granted on January 11, 2005. Both the Mexican Foreign Investment Commission and the Mexican Federal Competition Commission have approved the acquisition. On January 25, 2005, the companies announced that the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act had expired without a formal request from the U.S. Department of Justice.
    TMM's management will discuss earnings and provide a corporate update on Friday, February 25, 2005, at 11:00 a.m. Eastern Time. To participate in the call, please dial 800-257-2101 (domestic) or 303-205-0044 (international) at least five minutes prior to the start of the call. A simultaneous Webcast of the meeting will be available at http://www.actioncast.acttel.com, Event ID: 25304. The Company suggests that Internet participants access the site at least five minutes prior to the start of the conference call to download and install any software required to run the presentation. A replay of the conference call will be available through November 5 at 11:59 p.m. EDT, by dialing 800-405-2236 or 303-590-3000, and entering conference ID 11011935. On the Internet a replay will be available for 30 days at http://www.actioncast.acttel.com, Event ID: 25304.
    Headquartered in Mexico City, TMM is a Latin American multimodal transportation Company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Visit TMM's web site at www.grupotmm.com and TFM's web site at www.tfm.com.mx. Both sites offer Spanish/English language options.

    Included in this press release are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements speak only as of the date they are made and are based on the beliefs of the Company's management as well as on assumptions made. Actual results could differ materially from those included in such forward-looking statements. Readers are cautioned that all forward-looking statements involve risks and uncertainty. The following factors could cause actual results to differ materially from such forward-looking statements: global, US and Mexican economic and social conditions; the effect of the North American Free Trade Agreement on the level of US-Mexico trade; the condition of the world shipping market; the success of the Company's investment in TFM, S.A. de C.V. and other new businesses; risks associated with the Company's reorganization and restructuring; the outcome of pending litigation and arbitration with Kansas City Southern; the timing of the receipt of any amounts in respect of TFM's pending claim for a refund of certain value added taxes; the outcome of pending litigation relating to the obligation to repurchase shares of TFM owned by the Mexican Government and the ability of the Company or its subsidiaries to fund any such purchase if required to do so; the ability of the Company to reduce corporate overhead costs; the ability of management to manage growth and successfully compete in new businesses; and the ability of the Company to complete the proposed restructuring or otherwise repay, restructure or refinance its indebtedness. These risk factors and additional information are included in the Company's reports on Form 6-K and 20-F on file with the United States Securities and Exchange Commission.

    Financial tables to follow....

Grupo TMM, S.A. and subsidiaries (a)Statement of Income (discontinuing of railroad operations) - millions of dollars -

Three months ended Year ended December 31, December 31, 2004 2003 2004 2003 ----------------------------------------------------------------------

Revenue from freight and services 67.772 58.989 250.992 226.897 ----------------------------------------------------------------------

Cost of freight and services (58.190) (49.130) (212.159)(188.972) ---------------------------------------------------------------------- Depreciation of vessels and operating equipment (1.313) (1.694) (5.430) (7.349) ----------------------------------------------------------------------

8.269 8.165 33.403 30.576 ----------------------------------------------------------------------

Administrative expenses (7.578) (7.475) (28.429) (29.686) ---------------------------------------------------------------------- Corporate restructuring expenses (0.010) (0.400) (0.820) (3.178) ----------------------------------------------------------------------

Operating income (loss) 0.681 0.290 4.154 (2.288) ======================================================================

Other (expenses) income - Net (6.473) (44.843) 14.428 (61.507) ----------------------------------------------------------------------

Financial (expenses) income - Net (18.756) (10.239) (67.446) (52.596) ---------------------------------------------------------------------- Exchange gain (loss) - Net 2.460 (1.512) 2.466 (4.039) ----------------------------------------------------------------------

Net financial cost (16.296) (11.751) (64.980) (56.635) ----------------------------------------------------------------------

Loss before taxes (22.088) (56.304) (46.398)(120.430) ======================================================================

Benefit (provision) for taxes 9.994 (8.109) 19.739 (6.121) ----------------------------------------------------------------------

Loss before minority interest (12.094) (64.413) (26.659)(126.551) ======================================================================

Minority interest (1.788) (0.101) (4.519) (2.042) ----------------------------------------------------------------------

Net loss before discontinuing operations (13.882) (64.514) (31.178)(128.593) ======================================================================

Discontinuing operations 0.804 (1.739) 7.815 41.931 ----------------------------------------------------------------------

Net loss for the period (13.078) (66.253) (23.363) (86.662) ----------------------------------------------------------------------

Weighted average outstanding shares (millions) 56.963 56.963 56.963 56.963 Loss earnings per share (dollars / share) (0.23) (1.16) (0.41) (1.52)

Outstanding shares at end of period (millions) 56.963 56.963 56.963 56.963 Loss earnings per share (dollars / share) (0.23) (1.16) (0.41) (1.52) ----------------------------------------------------------------------

(a) Prepared in accordance with International Financial Reporting Standards.

Note: In accordance with International Financial Reporting Standard # 5 (IFRS 5) "Non-current assets held for sale and discontinued operations" Grupo TMM, S. A. shows the effect of the applications of our Financial Statements.

Grupo TMM, S.A. and subsidiaries (a)Balance Sheet (discontinuing of railroad operations) - millions of dollars -

December 31, December 31, 2004 2003 ----------------------------------------------------------------------

Current assets: --------------- Cash and cash equivalents 53.227 71.030 ---------------------------------------------------------------------- Accounts receivable Accounts receivable - Net 38.236 33.105 ---------------------------------------------------------------------- Other accounts receivable 52.993 44.649 ---------------------------------------------------------------------- Prepaid expenses and others current assets 8.550 6.592 ---------------------------------------------------------------------- Total current assets 153.006 155.376 ======================================================================

Property, machinery and equipment - Net 77.701 76.358 ====================================================================== Assets disposed of by sale 367.613 360.502 ====================================================================== Other assets 45.198 35.618 ====================================================================== Deferred taxes 88.244 67.201 ====================================================================== Total assets 731.762 695.055 ----------------------------------------------------------------------

Current liabilities: -------------------- Bank loans and current maturities of long- term liabilities 1.740 373.792 ---------------------------------------------------------------------- Suppliers 24.443 25.335 ---------------------------------------------------------------------- Other accounts payable and accrued expenses 92.451 118.350 ---------------------------------------------------------------------- Total current liabilities 118.634 517.477 ====================================================================== Long-term liabilities: ---------------------- Bank loans and other obligations 469.532 1.470 ---------------------------------------------------------------------- Other long-term liabilities 73.586 87.255 ---------------------------------------------------------------------- Total long-term liabilities 543.118 88.725 ======================================================================

Total liabilities 661.752 606.202 ----------------------------------------------------------------------

Minority interest 40.184 35.665 ======================================================================

Stockholders' equity Common stock 121.158 121.158 ---------------------------------------------------------------------- Retained earnings (73.575) (50.213) ---------------------------------------------------------------------- Initial accumulated translation loss (17.757) (17.757) ---------------------------------------------------------------------- Total stockholders' equity 29.826 53.188 ----------------------------------------------------------------------

Total liabilities and stockholders' equity 731.762 695.055 ----------------------------------------------------------------------

(a) Prepared in accordance with International Financial Reporting Standards.

Note: In accordance with International Financial Reporting Standard # 5 (IFRS 5) "Non-current assets held for sale and discontinued operations" Grupo TMM, S. A. shows the effect of the applications of our Financial Statements.

Grupo TMM, S.A. and subsidiaries (a)Statement of Cash Flow (discontinuing of railroad operations) millions of dollars -

Three months ended Year ended December 31, December 31, 2004 2003 2004 2003 ----------------------------------------------------------------------

Cash flow from operation activities: ------------------------ Net loss for the period (13.078) (66.253) (23.363) (86.662) ----------------------------------------------------------------------

Charges (credits) to income not affecting resources: Depreciation & amortization 3.167 3.366 13.621 16.797 ---------------------------------------------------------------------- Interest in TFM (0.804) 1.739 (7.815) (41.931) ---------------------------------------------------------------------- Minority interest 1.788 0.101 4.519 2.042 ---------------------------------------------------------------------- Deferred income taxes (4.890) 9.354 (21.043) 5.027 ---------------------------------------------------------------------- Other non-cash items 1.010 37.655 1.870 55.560 ---------------------------------------------------------------------- Total non-cash items 0.271 52.215 (8.848) 37.495 ---------------------------------------------------------------------- Changes in assets & liabilities 26.682 29.543 27.960 10.499 ---------------------------------------------------------------------- Total adjustments 26.953 81.758 19.112 47.994 ----------------------------------------------------------------------

13.875 15.505 (4.251) (38.668) ======================================================================

Cash flow from investing activities: ------------------------ Proceeds from sales of assets (net) 0.022 0.641 1.374 7.570 ---------------------------------------------------------------------- Payments for purchases of assets (3.575) (4.206) (11.968) (7.887) ---------------------------------------------------------------------- Sale of subsidiaries, net of cash sold 0.288 128.693 ---------------------------------------------------------------------- Dividends paid to minority partners (8.000) ----------------------------------------------------------------------

Net cash (used in) provided by investment activities (3.553) (3.277) (10.594) 120.376 ======================================================================

Cash flow provided by financing activities: -------------------------------- Short-term borrowings (net) 1.341 (0.300) (16.749) ---------------------------------------------------------------------- Principal payments under capital lease obligations (0.025) (0.022) (0.094) (0.833) ---------------------------------------------------------------------- (Repurchase) sale of accounts receivable (net) (4.998) 22.300 (1.328) (10.419) ---------------------------------------------------------------------- Repayment of long-term debt (0.247) (0.247) (1.236) (0.989) ---------------------------------------------------------------------- (Paid) Proceeds from convertible notes (13.295) ----------------------------------------------------------------------

Net cash (used in) provided by financing activities (5.270) 23.372 (2.958) (42.285) ======================================================================

Net (decrease) increase in cash 5.052 35.600 (17.803) 39.423 ---------------------------------------------------------------------- Cash at beginning of period 48.175 35.430 71.030 31.607 ---------------------------------------------------------------------- Cash at end of period 53.227 71.030 53.227 71.030 ----------------------------------------------------------------------

(a) Prepared in accordance with International Financial Reporting Standards.

Note: In accordance with International Financial Reporting Standard # 5 (IFRS 5) "Non-current assets held for sale and discontinued operations" Grupo TMM, S. A. shows the effect of the applications of our Financial Statements.

--30--YM/cg*

CONTACT: Grupo TMM Juan Fernandez, 011-525-55-629-8778 juan.fernandez@tmm.com.mx Brad Skinner, 011-525-55-629-8725 (Investor Relations) 203-247-2420 brad.skinner@tmm.com.mx or Dresner Corporate Services Kristine Walczak, 312-726-3600 (investors, analysts, media) kwalczak@dresnerco.com or Proa Structura Marco Provencio, 011-525-55-629-8708 011-525-55-442-4948 mp@proa.structura.com.mx

KEYWORD: MEXICO INTERNATIONAL LATIN AMERICA INDUSTRY KEYWORD: AIRLINES TRANSPORTATION EARNINGS CONFERENCE CALLS SOURCE: Grupo TMM

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