Grupo Mexico profit drops on financial costs, lower revenue

Mexican mining, rail and infrastructure company Grupo Mexico said on Tuesday its second-quarter profit fell 35 percent, hit by lower revenue and higher financial costs.

Grupo Mexico posted a profit of US$364.8 million for the April to June period, down from US$558.6 million in the same quarter a year earlier.

Revenue for the period dropped 7.7 percent to US$2.179 billion. The company had a net financial cost of US$62.7 million, compared with a net gain of US$99.4 million a year earlier.

The company, which has come to rely more on its rail division as metals prices have fallen in recent years, decided earlier this year to postpone an initial public offering of its rail unit ITM that was planned for June.

It is not clear when it will now take place.

Grupo Mexico had hoped to make more than a US$1 billion from the IPO, which would give investors a way to invest in Mexico's booming auto sector. Many of the cars Mexico produces head north to the United States by rail, and new auto factory openings have helped drive expectations for the sector.