TMM Consolidated Revenues Up 2.5 Times yoy in 2006

TMM Real Estate Development (TR61 GR: BUY) released its 2006 consolidated financials. The company posted revenues of USD 95.8 mln, an increase of 2.5 times yoy. Its EBITDA amounted to USD 17.0 mln, a margin of 17.7%, and net income attributable to participants of the parent company was USD 23.0 mln, a margin of 24.0%. The audit of TMM’s financials was performed by KPMG. Andriy Gostik: TMM’s reported sales were 18.9% higher than our estimates, primarily due to higher than expected revenues from construction contracts. Consequently, the company’s 2006 EBITDA was 51% higher than our projection. Given higher than expected sales and EBITDA, one would also expect a much higher net income. Yet, net earnings were largely in line with our forecasts, up only 4.5%, which we attribute mainly to a smaller than projected revaluation gain. We stick to our previous projections for 2007 and 2008 in which we do not explicitly account for TMM’s ongoing construction contracts.