quarterly earnings release 3q19 · 2019-10-28 · 7 means costs incurred per driven kilometer:...

Quarterly Earnings Release

3Q19

Mexico City, October 28, 2019

Quarterly Earnings Release

3Q19

Mexico City, October 28, 2019

Grupo Traxion | 3Q19 Quarterly Earnings Release 1

Relevant Information for the Quarter

TRAXION REPORTS FINANCIAL AND OPERATING RESULTS FOR THE THIRD QUARTER OF 2019

REVENUES GREW 29.8% AND EBITDA INCREASED 40.5% IN 3Q19

AVERAGE FLEET REACHED 8,158 POWER UNITS

The figures presented in this report have been prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in nominal million Mexican Pesos (MXN), unless otherwise stated.

➢ Consolidated revenue for the quarter totaled 3,134 million pesos, a 29.8% growth compared to 3Q18, mainly driven by an increase of 31.3% in revenues of cargo and logistics, and 27.8% in the personnel and student transportation segment.

➢ Consolidated EBITDA1 totaled 696 million pesos that stems from an increase in revenues and efficiencies in costs and expenses.

➢ EBITDA margin was 22.2%, a 169 basis-point expansion compares to 3Q18.

➢ Cost-to-revenue ratio was 69.2%, a 30 basis-point decrease compared to 3Q18, due to efficient cost control and fleet profitability.

➢ General expenses grew 27.0% compared to 3Q18, mainly due to an increase in the Company’s operations.

➢ Net income reached 139 million pesos, a 14.7% growth compared to 121 million pesos in the same period of 2018, attributable to improvements in costs and expenses

➢ Cash flow from operating activities reached 384 million pesos, a 12.2% growth compared to 3Q18.

➢ Investment in fleet and equipment was 428 million pesos during the quarter, compared to 465 million pesos in 3Q18.

➢ Net debt reached 5,399 million pesos, while the net-debt-to-EBITDA ratio was 2.16x.

➢ Average fleet in the quarter was 8,158 power units2, a growth of 16.6% compared to 3Q18.

➢ Kilometers driven reached 140.1 million kilometers, a 26.4% growth compared to 3Q18.

1 EBITDA is operating income, plus depreciation and amortization. 2 Includes Redpack’s last-mile fleet units consisting of 86 trucks, 327 light trucks, 28 cars and 159 motorcycles.


TRAXION Updates its Expected Full-Year 2019 Figures

The Company updates its estimated figures for 2019 based on accumulated results from the first nine months of the year.

TRAXION expects total revenues of approximately 12 billion pesos, with an EBITDA margin of approximately 21%.

The above implies increases to the Company’s guidance released in February 2019.

These estimates are due to increases in the Company’s organic operations, better cost control, efficiencies in expenses and adoption of IFRS-16.


Message from the Executive President

Dear fellow shareholders.

It is a great privilege to present our third quarter financial and operating results. TRAXION celebrated its second-year anniversary of being a publicly traded company this quarter. We are very proud to have become the most important transportation company in the country that provides integrated solutions in mobility and logistics in Mexico and serves as a benchmark for the sector.

Aside from our excellent quarterly results, the first nine months of the year have been outstanding, to that extent that we revised upwards our estimated earnings for 2019. TRAXION expects to close the year with revenues of around 12 billion pesos, and an EBITDA margin of about 21%. This outcome driven by best-in-class execution capabilities, and the excellent long-term relationships with our clients. We provide them with high-level service solutions, and they entrust us with their logistics, staff and merchandise mobility.

Since its IPO, TRAXION has invested more than 5.2 billion pesos in organic fleet growth, and more than 1.6 billion pesos in strategic acquisitions. This capital deployment has expanded the Company’s service offering and driven operating consolidation, and enabled TRAXION to enter several business niches via acquisitions. In addition, the capital deployment helped boost the development of other segments organically, while we expand and improve our financial and operating results.

Today, TRAXION is a more robust and profitable company, with an integrated service offering in freight, logistics, and personal mobility. We have expanded to different niches such as refrigerated freight, petrochemicals and other materials transportation, last-mile, courier and packaging. We have expanded in e-commerce and other logistics channels, which can be developed internally by TRAXION so we can become a more relevant player in this high-growth market in Mexico.

During the third quarter, TRAXION recorded consolidated revenues of 3.13 billion pesos, a 29.8% growth compared to the same period last year. The Company’s EBITDA reached 696 million pesos; a 40.5% increase compared to the same quarter in 2018. Net income reported a growth of 14.7% to reach 139 million pesos in the quarter. As you can see, these financial figures reflect the stability and growth of our business since its IPO.

On the operational side, our average fleet grew 1,162 power units. Kilometers driven reached 140.1 million, which represents a 26.4% increase. In terms of pricing, revenue per kilometer grew 10.6% and 9.0% in cargo and passenger transportation, respectively. Not only is TRAXION becoming more efficient in utilizing its fleet, but it is also selling a larger kilometer volume at higher prices, which translates in improved profitability and capacity.

I would like to highlight some details I consider especially relevant. Based on the 2019 nine-month accumulated figures, EBITDA grew by 58.7% and the margin expanded 265 basis points. Net income increased 32.0%, whereas operating cash flow grew more than 80.0%. These figures speak for themselves.

Finally, I want to thank all our investors, and the great Traxion family, as without their support, effort and dedication, the Company would not be where it is today.

Sincerely, Aby Lijtszain Chernizky

Co-Founder and Executive President


Operating and Financial Indicators Figures in million MXN except for per share and per kilometer information

Third Quarter Nine Months Ended

Financial Indicators 2019 2018 ∆ 2019 2018 ∆

Consolidated revenue 3,134 2,415 29.8% 9,038 6,510 38.8%

Consolidated operating income 384 278 37.9% 928 685 35.4%

Consolidated EBITDA 696 496 40.5% 1,914 1,206 58.7%

EBITDA margin 22.2% 20.5% 169 bps 21.2% 18.5% 265 bps

Consolidated net income 139 121 14.7% 294 222 32.0%

Earnings per share3 0.26 0.22 16.6% 0.55 0.41 33.2%

Operating Indicators4

Kilometers driven (million) 140.1 110.8 26.4% 411.1 311.7 31.9%

Cargo 61.5 44.9 36.9% 185.6 130.4 42.3%

Contracted personnel and student transportation 78.6 65.9 19.3% 225.5 181.3 24.3%

Average fleet size (power units) 8,158 6,996 16.6% 8,142 6,472 25.8%

Cargo 2,185 1,546 41.3% 2,190 1,345 62.8%

Contracted personnel and student transportation 5,373 4,776 12.5% 5,339 4,453 19.9%

Last mile5 600 674 (11.0)% 613 674 (9.1)%

Avg. revenue per kilometer6 (Ps./km.)

Cargo 23.42 21.18 10.6% 22.51 20.97 7.4%


Avg. cost per kilometer7 (Ps./km.)

Cargo 16.01 15.72 1.9% 16.41 15.60 5.2%


3 To calculate earnings per share, a weighted average of shares, excluding share repurchases, was used: 3Q19: 535,491,553 shares; 9M19: 538,016,250; and for 2018: 3Q18: 542,795,049; 9M18: 543,248,021 shares. 4 Includes cargo; does not include either logistics or last-mile fleet. Unconsolidated figures including inter-company transactions. 5 Last-mile fleet units include the Redpack fleet consisting of 86 trucks, 327 vans, 28 cars and 159 motorcycles. 6 Does not include Redpack’s fleet (last-mile). 7 Means costs incurred per driven kilometer: wages, net fuel, maintenance, net tolls, and other costs, including depreciation and excluding warehousing costs.


Quarterly MD&A Figures in million MXN

Consolidated Revenues


2019 2018 ∆ 2019 2018 ∆

Cargo and logistics 1,814 1,382 31.3% 5,336 3,685 44.8%

Contracted personnel and student transportation 1,320 1,033 27.8% 3,702 2,825 31.0%

Total consolidated revenues 3,134 2,415 29.8% 9,038 6,510 38.8%

Consolidates revenues in the quarter grew 719 million pesos, a 29.8% increase compared to 3Q18. This growth is due to:

▪ An increase of 432 million pesos in revenue from the cargo and logistics segment, which contributed 57.9% to consolidated revenues; and

▪ An increase of 287 million pesos in revenue from the personnel and student transportation segment, which contributed 42.1% to consolidated revenues.

Total Costs Third Quarter Nine Months Ended

2019 2018 ∆ 2019 2018 ∆

Fuel (diesel and gasoline) 591 435 35.9% 1,754 1,187 47.8%

% of revenue 18.9% 18.0% 19.4% 18.2%

Labor costs 430 363 18.4% 1,237 996 24.2%

% of revenue 13.7% 15.0% 13.7% 15.3%

Tolls 133 102 30.5% 395 287 37.9%

% of revenue 4.2% 4.2% 4.4% 4.4%

Fleet maintenance 172 137 25.0% 516 405 27.6%

% of revenue 5.5% 5.7% 5.7% 6.2%

Facilities, utilities and supplies8 624 531 17.5% 1,809 1,335 35.5%

% of revenue 19.9% 22.0% 20.0% 20.5%

Depreciation and amortization 217 109 100.0% 714 344 107.2%

% of revenue 6.9% 4.5% 7.9% 5.3%

Total costs 2,167 1,677 29.2% 6,425 4,554 41.1%

% of revenue 69.2% 69.5% 71.1% 70.0%

Total costs reached 2,167 million pesos, an increase of 29.2% compared to 3Q18. The main changes in operating costs were:

8 From 3Q17 to 1Q19 this line was named “Other costs (ex-D&A).” Starting on 2Q19, the Company decided to rename this line to “Facilities, utilities and supplies,” and includes costs such as rent (terminals, yards, depots, offices, shops, points of sale, etc.), communications, utilities, supplies, maneuvers, security and systems, among other, as well as other operating costs directly related to the business.


▪ Fuel cost totaled 591 million pesos, a 35.9% growth, explained by a fuel price increase of 6.9%, and by the expansion in kilometer volume.

▪ Fleet maintenance cost increased 25.0%, mainly because of fleet growth both organically and inorganically, and by the expansion in kilometer volume, compared to 3Q18.

▪ Costo of Facilities, utilities and supplies increased 17.5%, showing a 210 basis-point reduction as a percentage of revenues.

▪ Depreciation and amortization cost grew 100%. This increase was mainly due to:

o Organic fleet growth of approximately 600 units in the personnel and student transportation segment compared to 3Q18.

o The integration of the assets of the companies acquired in 2018, which added approximately 561 freight units, and 600 last-mile units; and

o Organic and inorganic growth in trailing equipment such as dry vans, refrigerated trailers, hopper trailers, platforms and other.

General Expenses9 Third Quarter Nine Months Ended

2019 2018 ∆ 2019 2018 ∆

SG&A 583 459 27.0% 1,685 1,270 32.7%

% of revenue 18.6% 19.0% (40) bps 18.6% 19.5% (90) bps

General expenses totaled 583 million pesos, an increase of 27.0%, and is below the increase in consolidated revenues.

Excluding the contribution of Bisonte, the company acquired in 2018, to general expenses, growth in this item was 21.6%.

EBITDA Reconciliation Third Quarter Nine Months Ended

2019 2018 ∆ 2019 2018 ∆

Operating income 384 278 37.9% 928 685 35.4%

Depreciation and amortization 313 174 79.7% 940 477 97.1%

Non-recurring expenses10 - 44 46 44 4.9%

EBITDA 696 496 40.5% 1,914 1,206 58.7%

EBITDA Margin 22.2% 20.5% 169 bps 21.2% 18.5% 265 bps

EBITDA totaled 696 million pesos, a 40.5% increase compared to 3Q18. EBITDA margin was 22.2%, an increase of 169 basis points compared to the same period of last year.

9 Includes general expenses net of other income, other expenses and allowance for doubtful accounts. 10 Expenses incurred in the restructurings of subsidiaries.


Comprehensive Financial Result Third Quarter Nine Months Ended

2019 2018 2019 2018

Interest expense (218) (70) (536) (262)

Foreign exchange gain (loss) 6 (13) 1 (57)

Effect of financial instruments (5) 1 14 (13)

Interest income 40 5 49 40

Other (8) (10) (26) (31)

Comprehensive Financial Result (186) (87) (498) (324)

Comprehensive financial result was a 186 million pesos expense, mainly due to a growth in interest expense derived from increased leverage, compared to 3Q18.

Net Income Third Quarter Nine Months Ended

2019 2018 ∆ 2019 2018 ∆

Net income 139 121 14.7% 294 222 32.0%

Net income grew 14.7% compared to 3Q18 and reach 139 million pesos, is mainly caused by a growth in consolidated revenues and better control in costs and expenses.

Likewise, accumulated net income in the first nine months of 2019 grew 32.0% compared to the same period in 2018.


Cash Flows from Operating Activities Third Quarter Nine Months Ended

2019 2018 ∆$ ∆% 2019 2018 ∆$ ∆%

Consolidated net income 139 121 18 14.7% 294 222 71 32.0%

Income taxes 59 70 (11) (15.4)% 136 139 (2) (1.6)%

Depreciation and amortization 313 174 139 79.7% 940 477 463 97.1%

Interest expense 218 70 148 212.5% 536 262 274 104.5%

Other financial costs (34) (5) (29) 537.1% (63) (26) (37) 140.9%

Loss (gain) of transportation equipment and machinery 10 (28) 38 (135.3)% 1 (30) 31 (102.7)%

Cash flow before working capital 704 401 303 75.6% 1,885 1,045 840 80.5%

Working capital (321) (59) (261) 441.2% (715) (470) (245) 52.1%

Net cash flows from operating activities 384 342 42 12.2% 1,170 574 596 103.7%

Net cash flow from operating activities totaled 384 million pesos, a 12.2% growth compared to 3Q18, which stems from the increase in net income and changes in working capital.

Shareholders’ Equity

Shareholders’ equity totaled 10,112 million pesos compared to 10,049 million pesos as of December 31, 2018. This growth is due to net income generated in the first nine months of 2019 minus the effect of share repurchases.

CapEx


Segment Expansion Renovation Total % Expansion Renovation Total %

Cargo and logistics11 35 74 110 25.6% 123 138 261 17.5%

Personnel and student transportation 318 - 318 74.4% 1,234 - 1,234 82.5%

Total 354 74 428 1,358 138 1,496

11 Includes investment in power units, and diverse trailing equipment such as dry, refrigerated, and hopper trailers, among other equipment.


Operating Results by Business Segment The following figures do not include inter-company eliminations

Cargo and Logistics



Cargo and logistics revenue 1,814 1,382 31.3% 5,336 3,685 44.8%

Revenue excluding acquisitions12 1,479 1,382 7.0% 4,368 3,685 18.5%

Total costs 1,296 996 30.1% 3,946 2,677 47.4%

General expenses13 345 261 32.2% 980 699 40.3%


EBITDA 350 268 30.7% 1,037 623 66.3%

EBITDA margin 19.3% 19.4% (10) bps 19.4% 16.9% 250 bps


Operating Indicators 2019 2018 ∆ 2019 2018 ∆



Last-mile fleet14 (units) 600 674 (11.0)% 613 674 (9.1)%

Average fleet age (years) 4.2 5.2 4.4 5.2

Average revenue per kilometer15 (Ps.) 23.42 21.18 10.6% 22.51 20.97 7.4%

Average cost per kilometer14 (Ps.) 16.01 15.72 1.9% 16.41 15.60 5.2%

Warehouse space (m2) 427,658 373,600 14.5% 416,227 373,600 11.4%

Average revenue per m2 (Ps.) 144.18 170.18 (15.3)% 151.82 156.98 (3.3)%

Average cost per m2 (Ps.) 131.77 112.81 16.8% 131.86 156.98 (16.0)%

Revenues of the cargo and logistics segment grew 31.3% compared to 3Q18. This increase of 432 million pesos is due to:

o Increases of 36.9% in kilometer volume and 10.6% in revenue per kilometer, which stem from a more efficient fleet allocation resulting from our client optimization strategy; and

o A 335 million pesos contribution of revenues from Bisonte.

Total costs increased 30.1% as a result of both growth in kilometer volume and the 6.9% hike in fuel prices, compared to 3Q18. Cost per kilometer grew 1.9%.

General expenses grew 32.2%, in line with that of revenues of the segment.

12 Excludes revenues of Bisonte only. 13 Includes general expenses net of other income, other expenses and allowance for doubtful accounts. 14 Last-mile fleet units include Redpack’s fleet consisting of 86 trucks, 327 light trucks, 28 cars and 159 motorcycles. 15 Includes cargo; does not include either logistics or last-mile fleet.


EBITDA recorded an increase of 30.7% to reach 350 million pesos. This implies a 19.3% margin. Moreover, during the first nine months of 2019 EBITDA of the segment has registered an expansion of 250 basis points compared to the same period in 2018.

Contracted Personnel and Student Transportation



Personnel and student transportation revenue 1,320 1,033 27.8% 3,703 2,825 31.1%

Total costs 872 681 27.9% 2,479 1,877 32.1%

Operating expenses16 223 205 8.7% 686 567 21.0%


EBITDA 347 221 57.3% 889 592 50.2%

EBITDA margin 26.3% 21.4% 493 bps 24.0% 21.0% 305 bps


Operating Indicators 2019 2018 ∆ 2019 2018 ∆



Average fleet age (years) 3.9 4.9 4.3 4.9

Average revenue per km. (Ps.) 16.80 15.42 9.0% 16.42 15.77 4.1%

Average cost per km. (Ps.) 11.09 10.34 7.3% 11.00 10.35 6.2%

Revenues from the personnel and student transportation segment grew 27.8%, mainly due to organic growth and a more efficient fleet allocation, which resulted in increases of 19.3% in kilometer volume and of 9.0% in revenue per kilometer.

Total costs increased 27.9% stemming from growth in kilometer volume and the 6.9% hike in fuel prices, compared to 3Q18.

General expenses increased 8.7%, which is significantly below the growth in revenues of this segment. This translates in economies of scale through which TRAXION generates more revenues in the segment while experiencing a marginal increase in operating expenses.

EBITDA of the segment grew 57.3% to reach 347 million pesos, which represents a margin of 26.3%, implying an expansion of 493 basis points compared to 3Q18. This is mainly due to an increase in revenues, kilometer volume, pricing, cost control and economies of scale.

16 Includes general expenses and allowance for doubtful accounts.


Debt Profile

Debt Breakdown 3Q19 3Q18 ∆$ ∆%

Short-term debt 1,037 399 638 159.9%

Short-term capital leases 214 74 140 187.8%

Long-term debt 3,883 1,814 2,069 114.0%

Long-term capital leases 844 314 530 169.1%

Total debt 5,978 2,601 3,377 129.8%

Cash 579 475 104 22.0%

Net debt 5,399 2,126 3,273 153.9%

17 Pro-forma, last-twelve months EBITDA

Leverage Ratios 3Q19

Total debt / LTM EBITDA17 2.39x

Net debt / LTM EBITDA 2.16x

Total debt / Equity 0.60x


3Q19 Earnings Call Invitation

Grupo TRAXION cordially invites you to join its 2Q19 earnings call, during which senior management will discuss financial results for the quarter and first six months of the year.

***Please note the change in time to 12:00 pm Eastern Time (New York), 10:00 am Central Time (Mexico City) ***


Research Coverage

Actinver Ramon Ortiz [email protected]

Barclays Pablo Monsiváis [email protected]

Citi Stephen Trent [email protected]

Morgan Stanley Josh Milberg, CFA [email protected]

Santander Pedro Bruno [email protected]

UBS Rogerio Araujo [email protected]

About TRAXION

TRAXION is the leading transportation and logistics company in Mexico. It offers a one-stop solution through the broadest and most diverse service portfolio in the country. TRAXION’s

platform operates two main business segments: cargo & logistics, and personnel and student transportation. The Company has 7 highly-recognized brands for their leadership in

different niches of the sector. TRAXION was founded in 2011 and ended 3Q19 with an average fleet of 8,1587 power units, 427,658 square meters of warehousing space, national

footprint, more than 1,000 clients, and more than 14,900 employees. TRAXION’s most important competitive advantages are an experienced and committed management team, only

consolidator in a highly-fragmented industry, only institutional company in a sector dominated by family-owned companies, a diversified, premium service portfolio, strong and long-

lasting relationships with clients and suppliers, and first-mover advantage.

Cargo and Logistics This segment provides solutions in cargo and logistics throughout the supply chains. Amongst the services rendered are dedicated freight, truckload, less-than-truckload, intermodal, refrigerated freight, petrochemicals and specialized transportation, border transfers, warehouse management, last-mile logistics solutions, moving and relocations services, packaging and courier. TRAXION operated 6 leading and recognized brands as Transportadora EGOBA, Muebles y Mudanzas MYM, Grupo SID, Auto Express Frontera Norte, Autotransportes El Bisonte, and Redpack. The Company operates one of the youngest, most modern, and flexible fleets in the industry with an average age of 4.2 years and an average of 2,185 power units, including 600 units of the last-mile fleet, at the end of 3Q19. Personnel and Student Transportation This segment provides personnel transportation services to corporates, industrial parks, and hotels, student transportation to schools and colleges, and complementary tourism services for private groups. Through its subsidiary LIPU, TRAXION operated a centralized platform under dedicated and sport contracts and the largest and most modern fleet of busses in Mexico with an average of 5,373 power units and the end of 3Q19. Disclaimer The information disclosed in this press release may contain statements with estimates regarding the future of Grupo Traxión, S.A.B. of C.V. and its subsidiaries (collectively "Traxión" or the "Company"),

which are not historical facts and represent the current opinion of the Traxión administration based on the information available to the Company. Such statements are subject to certain risks and factors made

based on assumptions. The words "anticipated", "believe", "estimate", "expect", "plan", and other similar expressions, related or not with the Company, seek to give estimates or forecasts. Different factors

may cause the results implicit in the statements to be materially different with respect to any future result or event of, or related to, Traxión that may be included expressly or implicitly within said statements.

Also, if the assumptions used in the statements turn out to be incorrect, the actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Traxión assumes

no obligation to update the statements or information presented within this release.

mailto:[email protected]







Financial Statements – Balance Sheet Thousand Pesos (MXN)

Assets 2019 2018 Liabilities and shareholders’ equity 2019 2018

Current assets: Current liabilities:

Cash & equivalents 579,418 501,130 Current installment of long-term debt 1,036,724 686,477

Receivables, net 2,222,037 2,003,735 Obligations under capital leases 214,180 152,057

Related parties 3,261 21,756 Short-term leasing obligations of IFRS 16 77,057 -

Other receivables, net 816,704 968,686 Suppliers 555,148 528,199

Inventory, net 86,002 96,555 Creditors 63,797 286,546

Prepayments 184,966 82,767 Other taxes 485,743 474,461

Total current assets 3,892,388 3,674,629 Provisions 533,994 426,179

Income taxes 54,563 26,599 Employee statutory profit sharing 79,417 46,491 Related parties 2,897 6,821

Non-current assets: Advancements from clients 56,906 83,562

Long-term prepayments - 11,600 Total current liabilities 3,160,426 2,717,392

Transportation equipment and machinery, net 8,586,566 7,924,695

Assets under right of use, net 658,429 - Non-current liabilities:

Permanent investments 3,017 3,365 Long-term debt, excluding current installments 3,883,097 3,528,873

Goodwill 4,270,498 4,289,608 Long-term obligations under capital leases, excluding current installments

844,159 490,842

Intangibles and other assets, net 1,440,854 1,507,278 Long-term leasing obligations of IFRS 16 300,100 -

Deferred income taxes 348,490 217,857 Financial instruments 60,747 -

Financial instruments - 41,201 Employee benefits 66,752 60,886

Total non-current assets 15,307,854 13,995,604 Deferred income taxes 772,808 823,013

Total non-current liabilities 5,927,663 4,903,614

Total liabilities 9,088,089 7,621,006

Shareholders’ equity:

Equity 8,671,506 8,855,224 Share subscription 135,944 135,944 Legal reserve 39,200 34,169 Actuarial losses 1,942 1,224 Gains from financial instruments (73,107) 28,841 Other equity accounts 303,015 248,707 Retained earnings 1,033,653 745,118

Total shareholders’ equity 10,112,153 10,049,227

Total assets 19,200,242 17,670,233 Total liabilities and shareholders’ equity 19,200,242 17,670,233


Financial Statements – Income Statement Thousand Pesos (MXN)

3Q19 3Q18 ∆ 9M19 9M18 ∆

Service revenue:

Cargo 1,450,216 978,451 48.2% 4,217,770 2,782,761 51.6%

Logistics services 212,023 209,026 1.4% 634,731 576,688 10.1%

Courier and packaging 156,217 190,623 (18.0)% 474,031 315,172 50.4%

Contracted personnel and student transportation 1,319,961 1,032,748 27.8% 3,701,641 2,824,792 31.0%

Other revenue (4,521) 3,677 9,907 10,478

Total operating revenue 3,133,896 2,414,525 29.8% 9,038,080 6,509,891 38.8%

Total costs 2,167,210 1,677,140 6,424,977 4,554,402

Gross profit 966,686 737,385 2,613,103 1,955,489

General expenses 566,524 485,930 1,676,697 1,316,364

Allowance for doubtful accounts 18,579 1,305 48,434 8,880

Other (income) expense, net (2,042) (28,064) (39,733) (55,111)

Operating income 383,625 278,214 37.9% 927,705 685,356 35.4%

Comprehensive financial result:

Interest expense (217,942) (69,742) (536,333) (262,311)

Financial cost of the defined benefit plan (253) 222 (761) (612)

Other financial cost (7,632) (10,398) (24,844) (30,407)

Foreign exchange (loss) gain, net 5,978 (12,665) 958 (57,218)

Effect of valuation of financial instruments (5,329) 675 13,953 (13,390)

Interest income 39,633 4,709 49,214 39,608

Comprehensive financial result (185,545) (87,199) (497,813) (324,330)

Profit before income taxes 198,080 191,015 429,892 361,026

Income taxes:

Fiscal basis 114,272 48,456 290,239 144,575

Deferred (55,322) 21,250 (153,913) (6,030)

Total income tax 58,950 69,706 136,326 138,545

Consolidarted net income (loss) 139,130 121,309 293,566 222,481


Financial Statements – Cash Flows Thousand Pesos (MXN)

Cash flows 3Q19 3Q18 9M19 9M18

Cash flows from operating activities

Consolidated net income 139,130 121,309 293,566 222,481

Depreciation and amortization 312,539 173,931 940,345 477,191

Income taxes 58,950 69,706 136,326 138,545

Interest expense, net 178,309 65,033 487,119 222,703

Effect of deconsolidation - - 39,993 -

Other virtual items 15,434 (28,840) (12,377) (16,352)

Cash flow before variations in working capital 704,363 401,139 1,884,972 1,044,568

Receivables 13,983 16,889 (218,302) (272,123)

Related-party receivables 399 9,020 (3,158) 43,630

Other current assets (40,070) (55,326) (16,880) (60,583)

Creditable taxes (121,184) (64,194) (289,508) (171,674)

Suppliers (199) (123,020) 26,949 (345,957)

Accrued liabilities (172,420) 139,820 (195,015) 255,529

Accounts payable to related parties 698 (12,656) (3,924) (11,516)

Advancements from clients 10,316 7,398 (26,656) (9,182)

Income taxes (12,222) 22,808 11,281 101,567

Net cash flows from operating activities 383,664 341,878 1,169,759 574,258

Cash flows from investing activities

Acquisition of transportation equipment & machinery (428,163) (465,311) (1,569,982) (1,741,533)

Other assets and liabilities, net 356,398 (27,962) 817,602 (495,600)

Interest income 39,633 1,151 49,214 27,153

Net cash flows from investing activities (32,132) (492,123) (703,166) (2,209,979)

Cash flows from financing activities

Debt payments (1,071,098) (22,405) (2,611,191) (1,040,790)

Share repurchases (54,048) (34,052) (183,718) (34,052)

Payments of capital leases (53,013) (21,791) (137,696) (64,306)

Payments of financial instruments (5,329) 675 13,953 14,373

Bank loans 1,097,766 220,000 3,293,654 273,900

Return of contributions for future capital increases (70,541) - (273,343) -

Interest expense (196,611) (54,353) (489,964) (310,507)

Net cash flows from financing activities (352,874) 88,074 (388,305) (1,161,382)

(Decrease) Increase in cash and equivalents, net (1,342) (62,171) 78,288 (2,797,104)

Cash and equivalents at beginning of period 580,760 537,229 501,130 3,272,162

Cash and equivalents at end of period 579,418 475,058 579,418 475,058

quarterly earnings release 3q19 · 2019-10-28 · 7 means costs incurred per driven kilometer:...

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