Grupo Mexico rail operations earnings plunge as volume drops

Automotive and minerals traffic were off more than 20% in Q1

Ferromex is the largest of Grupo Mexico's railroads. (Image: Ferromex)

Grupo Mexico’s transportation division — which includes Ferromex, Ferrosur, Florida East Coast Railway and Texas Pacifico — reported sharply lower first-quarter revenue and profits as a plunge in automotive and minerals traffic drove an overall volume decline.

For the quarter, GMXT’s operating income declined 18.5%, to $225 million, as revenue declined 12.1%, to $778 million, the company reported recently. Net income sank 21%, to $112 million. The operating ratio was 76.4%.

Volume fell 6.1% when measured by carloads, or 14.2% on the basis of tons per kilometer. A 21% decline in automotive traffic and a 20% drop in minerals traffic led the volume decline.

Intermodal volume grew 4.9%, however, as cross-border traffic rose and demand recovered on the FEC.

GMXT’s key operational metrics all improved for the quarter, with train speeds up, terminal dwell down, and train length and weight both increasing.

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