ICTSI earnings up 21% in H1

MANILA, Philippines - Earnings of port giant International Container Terminal Service Inc. (ICTSI) jumped 21 percent in the first half of the year on the back of strong revenues from port operations overseas.

ICTSI reported that its net income amounted to $105.6 million from January to June or $18.2 million higher compared to $87.4 million a year ago mainly due to strong operating income from its three geographic segments and gains recognized on the sale of a non-operating subsidiary in Cebu.

The increase was attributed to the termination of management contract in Kattupalli in India as well as the settlement of the insurance claims in Guayaquil, Ecuador.

Excluding the non-recurring items, ICTSI said its recurring net income would have been three percent higher at $85.1 million.

The port operator owned by port and gaming mogul Enrique Razon reported a 23 percent increase in revenues to $510.3 million in the first half of the year compared to $413.7 million.

“The increase in revenues was mainly due to the revenue contribution from the new terminals in Puerto Cortes, Honduras and Manzanillo, Mexico, favorable volume mix, stronger revenues from ancillary services and tariff increase in certain key terminals,” the port operator said.

Consolidated volume handled by the port operator grew 18 percent to 3.566 million twenty-foot equivalent units (TEU) for the first six months from 3.027 million TEUs in the same period in 2013.

According to the company, the increase in volume was mainly due to the continued growth in international and domestic trade in most of the Company’s terminals and the volume generated by Contecon Manzanillo S.A. (CMSA) and Operadora Portuaria Centroamericana, S.A. de C.V (OPC), the Company’s new container terminals in Manzanillo, Mexico and Puerto Cortes, Honduras.

ICTSI’s seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan accounted for 70 percent of the Group’s consolidated volume in the first half.

Consolidated cash operating expenses jumped 29 percent to $221 million from $171.9 million driven by higher volume-related expenses including on-call labor, fuel, power and repairs and maintenance, government-mandated and contracted salary rate increases in certain terminals, increased business development activities, cessation of ICTSI Oregon’s rent rebate program beginning January and cash operating expenses and start-up costs of new terminals.

ICTSI said capital expenditures amounted to $104.5 million in the first half of the year or approximately 34 percent of the full-year capital expenditure budget of $310 million.

The established budget is mainly allocated for the completion of phase one development in the company’s new container terminals in Mexico and Argentina, and to start the development of the terminals in Honduras and Democratic Republic of Congo.

In addition, ICTSI invested $23.9 million in the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia.  Its expected share for 2014 is approximately $120million.

ICTSI is a leading global developer, manager and operator of container terminals in the 50,000 to 2.5 million TEU per year range.