GRUPO TMM SAB [GTMAY] Filings

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 20-F

(Mark One)

 

OR

For the fiscal year ended December 31, 2023

OR

 

OR

 

 

Date of event requiring this shell company report ________________

 

For the transition period from _________to_____________

 

Commission file number 333-14194

 

GRUPO TMM, S.A.B.

(Exact name of Registrant as specified in its charter)

 

TMM GROUP

(Translation of Registrant’s name into English)

 

United Mexican States

(Jurisdiction of incorporation or organization)

 

Lago Alberto No. 442, P.5.

Colonia Anáhuac,

11320 México City, Mexico

(Address of principal executive offices)

 

Verónica Tego Sánchez

(5255) 5629 8866

veronica.tego@tmm.com.mx

Lago Alberto No. 442, P.5.

Colonia Anáhuac,

11320 México City, Mexico

 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

---

---

None

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

 

174,553,127 Shares outstanding as of December 31, 2023.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

☐ Yes           No ☒

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 

☐ Yes           No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

☒ Yes           No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

☒ Yes           No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

 

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒
		Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

 

If  “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

 

Item 17 ☐    Item 18 ☐

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐    No ☒

 

		PAGE
PART I		5
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	5
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	5
ITEM 3.	KEY INFORMATION	5
ITEM 4.	INFORMATION ON THE COMPANY	25
ITEM 4A.	UNRESOLVED STAFF COMMENTS	47
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	47
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	61
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	66
ITEM 8.	FINANCIAL INFORMATION	67
ITEM 9.	THE OFFER AND LISTING	69
ITEM 10.	ADDITIONAL INFORMATION	70
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	83
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	85
PART II		86
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	86
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	86
ITEM 15.	CONTROLS AND PROCEDURES	86
ITEM 16.	[RESERVED]	87
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	87
ITEM 16B.	CODE OF ETHICS	87
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	87
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	88
ITEM 16E.	PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	88
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	88
ITEM 16G.	CORPORATE GOVERNANCE	88
ITEM 16H.	MINE SAFETY DISCLOSURES	88
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	88
ITEM 16J.	INSIDER TRADING POLICIES	88
ITEM 16K.	CYBERSECURITY	88
PART III		90
ITEM 17.	FINANCIAL STATEMENTS	90
ITEM 18.	FINANCIAL STATEMENTS	91
ITEM 19.	EXHIBITS	92

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our ability to generate sufficient cash from operations to meet our obligations, including the ability of our subsidiaries to generate sufficient distributable cash flow and to distribute such cash flow in accordance with our existing agreements with our lenders and strategic partners and applicable law;

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Mexican, U.S. and global economic, political and social conditions;

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uncertainties related to the ongoing conflict between Russia and Ukraine, including the extent and duration of shortages in the supply of key raw materials, commodities and products;

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conditions affecting the international shipping and transportation markets or the oil and gas industry;

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uncertainties concerning the continuing COVID-19 pandemic and related governmental responses;

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conditions resulting from future pandemics, epidemics or other outbreaks of infectious diseases and governmental responses thereto;

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our ability to reduce corporate overhead costs;

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the availability of capital to fund our expansion plans;

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our ability to utilize a portion of our current and future tax loss carryforwards (“Net Operating Losses” or “NOLs”);

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changes in fuel prices;

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changes in legal or regulatory requirements in Mexico or the United States;

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market and interest rate fluctuations;

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competition in geographic and business areas in which we conduct our operations;

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the adverse resolution of litigation and other contingencies;

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the ability of management to manage growth and successfully compete in new businesses;

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the ability of the Company to diversify its customer base; and

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the ability of the Company to repay, restructure or refinance its indebtedness.

ITEM 1

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3

KEY INFORMATION

•

Our business has been, and may continue to be, adversely affected by pandemics, epidemics or other outbreaks of infectious diseases and governmental responses thereto.

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Uncertainties relating to our financial condition in our recent past and other factors raised substantial doubt about our ability to continue as a going concern and could have resulted in our dissolution under Mexican corporate law.

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If the time charter arrangements for the vessels we operate are terminated or expire, our business could be adversely affected.

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Our results from operations are dependent on fuel expenses.

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We may be unable to successfully expand our businesses.

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Significant competition could adversely affect our future financial performance.

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Downturns in certain cyclical industries in which our customers operate could have adverse effects on our results of operations.

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Grupo TMM is a party to contracts with other parties as joint investors in subsidiaries with a joint venture.

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Over time, asset values may fluctuate substantially and, if these values are lower at a time when we are attempting to dispose of an asset, we may incur a loss.

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Our future success depends upon the continued growth of and demand for the maritime, ports and terminals, and logistics industries which may have already achieved the peak of their upward growth trend and for which rates may have already been at or near historical highs. These factors may lead to reductions and volatility in rates and profitability.

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Our growth depends on our ability to expand relationships with existing charterers and other customers and to obtain new charterers and customers, for which we will face substantial competition.

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The aging of the vessels we operate may result in increased operating costs in the future, which could adversely affect our earnings.

•

Our results of operations may be adversely affected by operational risks inherent in the transportation and logistics industry.

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Our operations are subject to extensive environmental and safety laws and regulations and we may incur costs that have a material adverse effect on our financial condition as a result of our liabilities under or potential violations of environmental and safety laws and regulations.

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Potential labor disruptions could adversely affect our financial condition and our ability to meet our obligations under our financing arrangements.

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The conflict between Russia and Ukraine may have a material adverse effect on our business, financial condition, liquidity and results of operation.

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Continuing world tensions, including as the result of wars, armed conflicts, terrorist attacks, pandemics and trade disputes could have a material adverse effect on our business.

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Our information technology systems, as those of any company, may be subject to security incidents or interruptions in network connectivity which could have an material adverse effect on our business.

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Our customers may take actions that may reduce our revenues.

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Our financial statements may not provide you the same information as financial statements prepared under United States accounting rules.

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Our substantial indebtedness could adversely affect our financial condition and impair our ability to operate our business, and we may not be able to pay the interest on and principal amount of our indebtedness.

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Grupo TMM is primarily a holding company and depends upon funds received from its operating subsidiaries to make payments on its indebtedness.

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Restrictive covenants in our financing agreements may restrict our ability to pursue our business strategies.

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We have to service our debt with revenues mostly generated in U.S. Dollars. This could adversely affect our ability to service our debt in the event of a devaluation or depreciation in the value of the Mexican peso against the dollar.

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Our variable rate debt subjects us to risks associated with an increase in interest rates, which could increase the amount of our debt service obligations.

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Economic, political, social and public health conditions may adversely affect our business.

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Mexico is an emerging market economy, with attendant risks to our results of operations and financial condition.

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Currency fluctuations or the devaluation and depreciation of the Peso could limit the ability of the Company and others to convert Pesos into U.S. dollars or other currencies which could adversely affect our business, financial condition and results of operations.

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High interest rates in Mexico could increase our financing costs.

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Developments in other emerging market countries or in the United States may affect us and the prices of our securities.

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Mexico may experience high levels of inflation in the future, which could adversely affect our results of operations.

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Political events and declines in the level of oil production in Mexico could affect the Mexican economy and our business, financial condition and results of operations.

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Political events in the United States could have a material adverse effect on our business, financial condition and results of operations.

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Any decrease in oil prices could result in our clients reducing their spending on exploration and production projects, resulting in a decrease in demand for our services.

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Mexican antitrust laws may limit our ability to expand through acquisitions or joint ventures.

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Investors may not be able to enforce judgments against the Company.

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The protection afforded to minority shareholders in Mexico is different from that afforded to minority shareholders in the United States.

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Holders of ADSs may not be entitled to participate in any future preemptive rights offering, which may result in a dilution of such holders equity interest in our company.

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The Company is controlled by the Serrano Segovia family.

•

A change in control may adversely affect us.

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Our ADSs trade on the over-the-counter (“OTC”) market, which may limit the liquidity and price of our ADSs more than if the ADSs were quoted or listed on a national securities exchange.

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We have identified material weaknesses in our internal control over financial reporting. If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

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the continued identification, evaluation and participation in niche markets;

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the identification of joint venture opportunities or acquisition candidates;

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our ability to enter into acquisitions on favorable terms;

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our ability to finance any expansion of our business;

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our ability to hire and train qualified personnel, and to maintain our existing managerial base;

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the successful integration of any acquired businesses with our existing operations; and

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our ability to manage expansion effectively and to obtain required financing.

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prevailing economic conditions in the market;

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a substantial or extended decline in world trade;

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increases in the supply of vessel capacity;

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increased port and terminal capacity;

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prevailing charter rates;

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restrictions arising from emergency public health measures; and

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the cost of retrofitting or modifying existing ships and other assets, as a result of technological advances, changes in applicable environmental or other regulations or standards, or otherwise.

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supply and demand for products suitable for shipping, ports and terminals, and logistics services;

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changes in global production of products transported by vessels or for which we render other services;

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the distance cargo products are to be moved by sea or land;

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the globalization of manufacturing;

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global and regional economic and political conditions;

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changes in seaborne and other transportation patterns, including changes in the distances over which cargoes are transported;

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environmental and other regulatory developments;

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technological advancements;

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currency exchange rates;

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weather and natural disasters; and

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global and regional public health developments.

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the number of newbuilding vessel deliveries and the scrapping rate of similar vessels;

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the Mexican foreign trade balance;

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the price of steel and other raw materials;

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changes in environmental and other regulations that may limit the useful life of vessels and other assets;

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the number of vessels or other assets that are out of service;

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port congestion; and

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the existence of emergency public health measures that may require us to suspend or curtail some of our businesses.

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industry relationships and reputation for customer service and safety;

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experience and quality operations (including cost effectiveness);

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quality and experience of operating personnel;

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the ability to finance vessels and other assets at competitive rates and financial stability in general;

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relationships with shipyards and the ability to get suitable facilities;

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relationships with ship owners and the ability to obtain suitable second-hand vessels and equipment;

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construction management experience, including the ability to obtain on-time delivery of new ships and other assets according to customer specifications;

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willingness to accept operational risks pursuant to the charter or other services, as well as allowing termination for force majeure events, among others; and

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competitiveness of the bid in terms of overall price.

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limiting cash flow available for capital expenditures, acquisitions, working capital and other general corporate purposes because a substantial portion of our cash flow from operations must be dedicated to servicing debt;

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increasing our vulnerability to a downturn in economic or industry conditions;

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exposing us to risks inherent in interest rate fluctuations because future borrowings may be at interest rates that are higher than current rates, which could result in higher interest expenses;

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limiting our flexibility in planning for, or reacting to, competitive and other changes in our business;

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placing us at a competitive disadvantage compared to our competitors that have less debt and greater operating and financing flexibility than we do;

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limiting our ability to engage in activities that may be in our long-term best interest; and

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limiting our ability to borrow additional money to fund our working capital and capital expenditures or to refinance our existing indebtedness, or to enable us to fund the acquisitions contemplated in our business plan.

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incur additional indebtedness;

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create or suffer to exist liens;

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prepay certain debt;

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make certain restricted payments, including the payment of dividends;

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carry out certain investments;

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engage in certain transactions with shareholders and affiliates;

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Table of Contents

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use assets as security in other transactions;

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issue guarantees to third parties;

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sell assets; and

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engage in certain mergers and consolidations or in sale-leaseback transactions.

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significant governmental influence over local economies;

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substantial fluctuations in economic growth;

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high levels of inflation;

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changes in currency values;

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exchange controls or restrictions on expatriation of earnings;

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high domestic interest rates;

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wage and price controls;

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changes in governmental economic or tax policies;

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imposition of trade barriers;

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unexpected changes in regulation; and

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overall economic, political, social and public health instability.

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2019			2.83	%
2020			3.15	%
2021			7.36	%
2022			7.82	%
2023			4.66	%
2024 (annualized as of March)			4.42	%

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our revenues, cash flows and profitability;

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the fair market value and profitability of our vessels;

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our ability to maintain or increase our borrowing capacity;

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or ability to obtain additional capital to finance our business and make acquisitions, and the cost of that capital;

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the collectability of our receivables; and

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our ability to retain skilled personnel whom we would need in the event of an upturn in the demand for our services.

		Spot price of Mexican crude oil
Year Ended December 31,		High(1)				Low(1)				Average(1)				End of Year(2)
2019			65.83				43.65				56.13				56.14
2020			59.35				(2.37	)			35.70				47.16
2021			79.22				47.12				64.66				71.29
2022			119.62				60.42				89.49				69.71
2023			89.43				57.12				71.27				67.65

		Spot price of Mexican crude oil
Year 2024		High(3)				Low(3)				Average(3)				End of Year(4)
January			73.37				66.11				69.31				71.55
February			74.27				67.78				72.07				73.40
March			77.87				72.42				74.86				76.25
April(5)			80.17				75.82				77.86				76.25

(1)	The highest, lowest and average spot price of Mexican crude oil in U.S. dollars reported by Banco de México during the relevant year.

(2)	The spot price on the last day of each relevant year.

(3)	The highest, lowest and average spot price in the relevant month.

(4)	The spot price on the last day of each relevant month.

(5)	As of April 30, 2024.

ITEM 4

INFORMATION ON THE COMPANY

		Consolidated Transportation Revenues
		(in millions of Pesos)
		for the Years Ended December 31,
		2023				2022				2021
Maritime Operations		$	795.5			$	1,231.1			$	835.2
Maritime infrastructure operations			200.5				118.5				139.2
Ports, terminals and logistics Operations			73.1				161.0				223.8
Warehousing Operations			149.5				172.5				153.5
Total		$	1,218.6			$	1,683.1			$	1,351.7

		Foreign Trade 2020-2022(a)
		As of December 31, (in millions of Dollars)
		2023				2022				2021
Total Exports		$	593,005			$	577,698			$	494,949
Total Imports		$	598,475			$	604,615			$	505,703
Total Trade Flows		$	1,191,481			$	1,182,312			$	1,000,652
Growth Rate—Exports			2.6	%			16.7	%			18.6	%
Growth Rate—Imports			(1.0	)%			19.6	%			32.0	%
Growth Rate—Total			0.8	%			18.2	%			25.1	%
Growth Rate—GDP(b)			3.2	%			3.7	%			6.0	%

(a)	The figures include the in-bound (maquiladora) industry.

(b)	The methodology for calculating Growth Rate-GDP was modified by the Instituto Nacional de Estadistica, Geografia e Informatica (INEGI) and is based on 2018 prices.

•

We have adopted the following actions as a permanent part of our strategies, which focus, among others, on  offsetting recent financial instability resulting from pandemics such as the COVID-19 pandemic and the downturn in the oil industry: (i) reducing our overhead costs and selling, general and administrative (“SG&A”) expenses, (ii) working with Nacional Financiera, S.N.C. to maintain our early payment program to reduce our liquidity risk and mitigate payment delays resulting from changes in the payment policies of PEMEX and other key customers, (iii) diversifying our customer base, and (iv) negotiating with our lenders to delay our payment obligations and extend the applicable maturity date under various loans and financing agreements.

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With respect to helping ensure our financial reporting and auditing processes remain robust and as timely as possible, permanent actions we have implemented include, among others, (i) the implementation of new controls for emergency procedures, (ii) close monitoring of IT access controls to enable our employees to work remotely where possible, (iii) controls to mitigate the potential increase in cybersecurity risks arising from a higher level of remote work, and (iv) where existing controls are unable to be performed safely or effectively, identifying and implementing appropriate alternative controls to compensate for the lack of information.

•

We increased the number of ships for our Offshore Maritime Sector related businesses through the addition of five specialized vessels under a time charter contract with Pemex. These vessels, known as “mud vessels”, are used in the generation, transportation, conditioning and recovery of fluids during the drilling, completion and repair of offshore oil wells.

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To focus on strengthening our maritime-related businesses, we sold our warehousing business at the new Mexico City airport (Felipe Ángeles International Airport - AIFA), along with TMM Almacenadora S.A.P.I. de CV, the holder of the concession granted by AIFA. Additionally, to maintain efficient and profitable operations, we closed certain container maintenance and repair workshops.

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A capital increase amounting to $151,977,600.60 was undertaken by the principal shareholders of the Company. This capital increase will enable us to consolidate our projects, create value for our shareholders, and generate confidence among investors.

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Strengthen our business related to the Maritime Sector;

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Increasing the installed capacity in our Maritime Infrastructure operations;

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Maintaining efficient and profitable operations in Ports and Terminals, Logistics and Storage;

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Diversification and expansion of services;

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Business development with the assets strategically located in Tuxpan, Veracruz; and

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Disciplined and continuous control of expenses.

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We are one of the largest and leading Mexican owned and operated maritime and logistics companies in Mexico.

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We have extensive and proven experience in ports, terminals and integrated services, such as yards operations, vessels and intermodal equipment maintenance, repair and warehousing in Mexico.

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We have a demonstrated ability to contract vessels with limited disruptions.

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The Mexican Navigation Law requires that Mexican flag carriers receive preferential treatment.

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We are poised to capitalize on future growth in the Mexican energy sector.

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We are certified by the Institute of International Container Lessors (“IICL”) for our maintenance and repair of containers.

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Our operations in Tuxpan, Veracruz are in a prime location to capitalize on the growth of trade via the Gulf of Mexico.

Vessel Type		Number of Vessels				Total Dead Weight Tons (in thousands)				Total Cubic Meter Capacity (in thousands)				BHP(*)
Offshore vessels			5				**				**				8,748
Parcel tankers			1				14.4				16.5				**
Total			6				14.4.5				16.5				—

*	Average Brake Horse Power.

**	Not applicable.

Vessel	Year	Flag		DWT(1)				LOA(2) (m)(3)				Beam (m)				BHP			Charterer(s)
+ Redfish 4	2012	Mexico			2,435				67.40				16.00				8,000		PEP
+ Beluga 2	2012	Mexico			2,436				67.40				16.00				7,369		PEP
+ Go Canopus	2009	Mexico			2,278				67.00				16.00				10,876		PEP
+ Aurora Pearl	2013	Liberia			3,514				80.3				16.20				6,193		PEP
+ World Peridot	2013	Liberia			3,514				80.3				16.20				6,193		PEP

(1)	Dead weight tons.

(2)	Overall length.

(3)

Meters.

Vessel

Year

Flag

Length (m)(1)

Beam (m)

Draft (m)

DWT(2)

Capacity M3 Total

Oriental Marguerite

2008

Panama

134.2

20.5

8.81

14,367

16,232

(1)

Meters.

(2)	Dead weight tons.

•

expectations as to future oil and gas commodity prices;

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customer assessments of offshore drilling prospects compared to land-based opportunities;

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customer assessments of cost, geological opportunity and political stability in host countries;

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worldwide demand for oil and natural gas;

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the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;

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the level of production of non-OPEC countries;

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the relative exchange rates for the U.S. dollar; and

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various government policies regarding exploration and development of their oil and gas reserves.

Port	Concession/Permit	Date Awarded	Duration
Tuxpan	Stevedoring services	August 4, 1999	20 years (with the possibility of successive 10-year extensions, which were exercised in 2009 and 2019, respectively).

Business		Partner
Commercialization of Petroleum Products		Petrosoluciones en Firme, S.A.P.I de C.V.
Energy Infrastructure		EGI Oil & Gas, S.A. de C.V.

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customary provisions enabling authorities to carry out inspections of vessels and investigations of incidents;

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regulations concerning registration of vessels and waivers allowing Mexican companies to operate foreign flag vessels in otherwise reserved domains;

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foreign vessels are obliged to designate a shipping agent in order to call at Mexican ports;

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Mexican flag vessels are required to operate with Mexican crews only and cabotage is in principle reserved for Mexican vessels;

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when a foreign vessel is abandoned by the owners with cargo on board, provisions of the legislation coordinate repatriation and temporary maintenance of the crew which the law deems ultimately to be the joint and several liability of the owner and agent;

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the carriage of passengers, cargo and towage in ports and pilotage are also regulated;

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captains are responsible for damage and loss caused to vessels or ports due to negligence, lack of proper qualification, carelessness or bad faith, but are not responsible for damages caused by an act of God or force majeure;

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companies providing towage services must carry insurance to cover their liabilities to the satisfaction of the authorities;

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pollution is regulated by international treaties; however this only covers CLC-type liabilities. Pollution in respect of other substances is dealt with under local legislation which has no limitation. This is irrespective of any criminal proceedings or sanctions against the party responsible for the incident; and

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maritime privileges are also considered within the law.

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bareboat charter;

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time charter;

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voyage charter;

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carriage of goods;

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passengers;

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salvage; and

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towage.

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general provisions (definitions, guarantees, and maritime insurance);

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extraordinary specialization of vessels, registration, national maritime registry, maritime agents and nautical education;

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temporary navigation permits and permits for permanent stay, maneuver, nautical tourism and pollution prevention; and

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revisions to conform hydrocarbons terminology to the new Hydrocarbons Law.

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providing for PEMEX and CFE to become state-owned, for-profit companies (empresas productivas del estado, 100% Mexican);

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establishing a contractual regime to allow the Ministry of Energy (Secretaría de Energía or SENER), with the technical assistance of the new National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos or CNH), to award to PEMEX and private entities the right to participate in upstream oil and gas operations through the use of service contracts, profit-sharing agreements, production sharing agreements and license agreements, with the Ministry of Energy authorized to determine the best contractual form in each case so as to maximize revenue to the Mexican government;

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allowing private entities that have entered into a contract with PEMEX or the Mexican government to report, for accounting and financial purposes, the awarding of the contract, the related oil and gas reserves and the contract’s forecasted benefits, provided the private entities affirm that all oil and gas within the subsoil remains the property of Mexico;

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requiring PEMEX to participate in a “round zero” and submit to SENER for consideration a list of the areas where it intends to continue conducting exploration or production operations pursuant to the new contractual regime, establish that it has the technical, financial and execution capabilities needed to explore for and develop the oil and gas from those areas in an efficient and competitive manner, and provide a work program and budget for those areas;

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allowing PEMEX to transfer its rights to explore for and develop oil and gas resources to private entities upon application to SENER;

•

allowing the Energy Regulatory Comission (Comisión Reguladora de Energia or CRE) to grant permits for the storage, transport and distribution of oil and gas through pipelines as well as for the generation and commercialization of electricity;

•

creating the Mexican Petroleum Fund for Stabilization and Development (Fondo Mexicano del Petróleo para la Estabilización y el Desarollo) to act as a government trust fund for the collection and administration of income received by the Mexican government from contracts with PEMEX and private entities; and

•

creating the National Agency of Industrial Security and Environmental Protection of the Hydrocarbon Sector (Agencia Nacional de Seguridad Industrial y de Proteccion al Medio Ambiente del Sector de Hidrocarburos) to regulate and supervise matters concerning operational security and environmental protection in the oil and gas industry.

•

requires that companies applying for a permit to conduct midstream or downstream activities first demonstrate that they meet certain minimum storage requirements established by SENER;

•

modifies the procedure for the approval of applications to assign a permit, moving from the current “deemed approval” system under which an assignment application is deemed approved if the authorities fail to respond within the relevant time period, to one in which the failure of the authorities to respond within such period will result in denial of the application;

•

establishes new grounds for the revocation of permits, including where CRE or SENER determine that the permit holder (i) has committed the crime of hydrocarbons, fuels and petrochemicals smuggling or (ii) is otherwise in breach of the permit conditions or the provisions of the Hydrocarbons Law;

•

expands the discretionary authority of CRE and SENER, allowing them to suspend permits on a temporary basis or revoke them permanently, including for reasons of national security, energy security or to protect the national economy, and giving them the power to assume control of the permit holder’s administration and operations (or transfer such control to PEMEX) to ensure the continuous operation of the permit holder’s activities;

•

allows CRE or SENER to determine the length of any permit suspension, hire a new operator, use (or authorize PEMEX to use) the personnel of the permit holder to continue the permit holder’s operations, or use a combination of the foregoing;

•

allows CRE or SENER to revoke permits for storage activities in cases where the holder has failed to meet and comply with the authorized storage capacity; and

•

provides that where a permit holder has failed to exercise their rights or perform their duties within the time period specified in the permit, or within 365 days if no period is specified, CRE or SENER may declare the permit to have expired and be of no further legal validity.

Name		Country of Incorporation		Ownership Interest				Voting Interest
Autotransportación y Distribución Logística, S.A. de C.V. (Logistics)		Mexico			100	%			100	%
TMM Logistics, S.A. de C.V. (Logistics)		Mexico			100	%			100	%
Transportación Marítima Mexicana, S.A. de C.V. (Parcel tankers, and offshore vessels)		Mexico			100	%			100	%
Prestadora de Servicios MTR, S.A. de C.V. (Ports)		Mexico			100	%			100	%
Bimonte, S.A. de C.V. (Ports)		Mexico			100	%			100	%
Services and Solutions Optimus, S. de R.L. de C.V. (Ports)		Mexico			100	%			100	%
Administradora Marítima TMM, S.A.P.I. de C.V. (Shipping agencies)		Mexico			100	%			100	%
TMM Parcel Tankers, S. A. de C. V. (Parcel vessels)		Mexico			100	%			100	%
Almacenadora de Deposito Moderno, S. A. de C. V. (Warehousing)		Mexico			100	%			100	%
Saricogui Logística, S.A.P.I. de C.V. (Warehousing)		Mexico			100	%			100	%
Inmobiliaria Dos Naciones, S. R. L. de C. V. (Shipyard)		Mexico			100	%			100	%
Operadora Portuaria de Tuxpan, S.A. de C.V. (Ports)		Mexico			100	%			100	%

		Years Ended December 31,
		2023				2022				Estimated Total Useful Lives (Years)
		(in thousands of Pesos)
Shipyard		$	84			$	114				40
Drydocks (major vessel repairs / mud vessels refurbished in 2021)			42,845				68,161			2.5 and 3
Buildings and installations			101,033				103,815			20 and 25
Warehousing equipment			32				601				10
Computer equipment			151				182			3 and 4
Terminal equipment			18,863				20,996				10
Ground transportation equipment			4,330				3,132			4, 5 and 10
Other equipment			8,714				10,101
		$	176,052			$	207,102
Land			1,419,674				1,147,174
Construction in progress			230,406				136,495
Total Property, Vessels and Equipment-net		$	1,826,132			$	1,490,771

ITEM 4A.

UNRESOLVED STAFF COMMENTS

ITEM 5

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

•

COVID-19 crisis actions: In response to the recent financial instability resulting from the COVID-19 pandemic, we have taken a number of actions to strengthen our business, ensure the integrity of our financial reporting and audit processes, and protect the health and safety of our employees and the communities in which we operate. See Item 4. “Information on the Company - Recent Developments - COVID-19 Pandemic” and “Information on the Company - Business Strategy.”

•

Changes in management: We have recently made various changes to our senior management team. Effective September 1, 2020, Mrs. Vanessa Serrano Cuevas assumed the role of Chief Executive Officer. In 2021, Mr. Axel Xavier Vera de Castillo assumed the role of Chief Information Officer. As of 2022, Luis Manuel Ocejo Rodríguez, Christian Venus Vázquez Coria, Gerardo Meza Vázquez, Alejandro Romero Rodríguez and Víctor Velázquez Romo, assumed the positions of Deputy General Director, Legal Director, Internal Audit Manager, Director of Maritime Operations and Director of Maritime Infrastructure, respectively. Finally, in February 2023, Maricela González Méndez joined the Company as Commercial Director. Lastly, in September 2023, Verónica Tego Sánchez assumed the role of Chief Financial Officer, replacing Luis Rodolfo Capitanachi Dagdug, who served from 2021 through September 2023.

•

Updating our digital technology platforms: We continue to improve our technology and information systems capabilities through continued our Digitalization strategy. With the implementation of integrated cloud-based platforms, we have developed general systems for corporate use and specific software applications for each business unit, as well as optimize our telecommunications connectivity and internet speed across all locations where Group TMM operates. The efforts of our information technology partners have been fundamental to this transformation and operating continuity, working in close collaboration with our business partners to keep our applications running. As a result of these efforts, today our companies are aligned in a digital information platform that enables them to operate efficiently, effectively, flexibly and with an eye toward being prepared to adapt to any change impacting our businesses and our customers. Furthermore, we are continuously improving our financial systems according to system updates in accordance with the updates in the technological operating models of the authorities of the Government of Mexico, such as the Tax Administration System that updated the CFDI and the Payment Complement and implemented the Carta Porte, as well as to the operational changes of the business, in order to obtain operational and consolidated reports in a faster and more reliable manner.. See Item 4. “Information on the Company - Systems and Technology.”

•

Expanding our Maritime Operations: We have strengthened and streamlined our Maritime Operations in recent years, developing the business into our most profitable segment. We remain focused on expanding our Maritime Operations to add specialized vessels to our fleet in order to meet market requirements for new generation vessels with higher-rated and deeper-water capabilities. As part of this strategy, in August 2021, we entered into a long-term contract with PEMEX to operate three specialized vessels known as “mud vessels”, and in 2024 began operating 2 additional mud vessels with PEMEX. In addition, we have continued our efforts to diversify our customer base, as well as implemented a strategic cost reduction plan to offset some of the instability in the oil industry. See Item 4. “Information on the Company - Business Strategy - Expansion and Improvement of our Maritime Operations.”

•

Maintaining efficient and profitable operations: As part of the business segment analysis, in December 2022, the Company concluded its steel transportation operations to South America. Further, at the end of 2023 and beginning of 2024, the Company closed certain Container Maintenance and Repair locations.

•

Development of Maritime Infrastructure operations: In order to strengthen this segment, in 2022, the Shipyard business became a Business Division. The shipyard, located in the port of Tampico, provides ship repair and dry dock services to more than 30 vessels per year. We are working to incorporate a new floating dock during 2024, replacing one of the two existing floating docks that have reached their useful life, which will allow us to increase the current capacity. See ITEM 4 “Information on the Company - Business Strategies - Expansion of our Marine Operations”.

•

Reducing our corporate overhead: Over the last few years, we have significantly reduced our operating costs by reducing our corporate executive headcount through the identification and elimination of redundant functions and the transfer of certain employees to other business areas within the Company. We also relocated our corporate headquarters to a new location in Mexico City, reducing our lease expenses and other corporate overhead costs. We aim to optimize the size of our corporate staff as necessary to implement our business strategy.

•

Sale of certain subsidiaries: In recent years we have sold certain non-strategic subsidiaries in an effort to streamline our operations and reduce operating costs. During fiscal year 2023, two companies were sold, TMM Almacenadora, S.A.P.I. of C.V. (including the AIFA concession) and Servicios Tecnológico ST, S.A. of C.V. to an unrelated party.

•

Termination of port and terminal operations at the Port of Acapulco: Since 1996, we have operated the port of Acapulco in association with SSA Mexico through a concession granted by the Mexican government. The concession was subject to renewal in June 2021, at which time the López Obrador administration decided that the public interest would be best served by transitioning Mexican port operations to the oversight and control of SEMAR. As a result, we terminated our port and terminal operations in Acapulco concurrently with the expiration of our concession on June 21, 2021.

		For the years ended December 31
		2023				2022				2021
		(In millions of pesos)
Consolidated Transportation Revenues
Maritime operations		$	795.5			$	1,231.1			$	835.2
Maritime infrastructure operations			200.5				118.5				139.2
Port, terminal and logistics operations			73.1				161.0				223.8
Warehousing operations			149.5				172.5				153.5
Total		$	1,218.6			$	1,683.1			$	1,351.7
(Loss) Transportation Profit
Maritime operations		$	55.1			$	91.5			$	23.7
Maritime infrastructure operations			51.7				31.0				48.7
Port, terminal and logistics operations			(35.8	)			5.7				(18.8	)
Warehousing operations			(36.3	)			(1.0	)			(16.0	)
Shared corporate costs			(63.8	)			(84.3	)			(78.3	)
Total		$	(29.1	)		$	42.9			$	(40.7	)

		Transportation Revenues
		(In millions of pesos)
		For the years ended December 31
		2023				% Revenues				2022				% Revenues				A2023 vs. A2022 % of change
Maritime operations		$	795.5				65.3	%		$	1,231.1				73.2	%			(35.4	)%
Maritime infrastructure operations			200.5				16.5	%			118.5				7.0	%			69.2	%
Port, terminal and logistics operations			73.1				6.0	%			161.0				9.5	%			(54.6	)%
Warehousing operations			149.5				12.3	%			172.5				10.3	%			(13.3	)%
Total		$	1,218.6				100.0	%		$	1,683.1				100.0	%			(27.6	)%