ICTSI earnings up 22% to $221 million in 2018

MANILA, Philippines — Port operator International Container Terminal Services Inc. (ICTSI) reported a 22 percent rise in its net income in 2018 due to strong operating income from organic terminals and lower net loss in one of its investments.

In a disclosure to the Philippine Stock Exchange ICTSI said its net income attributable to equity holders jumped to $221.5 million from $182.1 million in 2017.

The company attributed the increase to strong operating income from organic terminals;a decrease in the company’s share in the net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA); and a $2.8 million non-recurring gain from the pre-termination of interest rate swap related to its terminal in Manzanillo, Mexico in May 2018.

SPIA is joint venture container terminal project with PSA International Pte Ltd. (in Buenaventura, Colombia. ICTSI’s share in the net loss of the project decreased from $36.8 million in 2017 to $23.4 million for 2018 as the company continued to ramp-up container volume.

ICTSI said, however, the increase was tempered by higher fixed port lease expense at Melbourne, Australia; a $5.8 million non-recurring impairment charge on the goodwill at its terminal in Davao in 2018; and a $7.5 million non-recurring gain on the termination of the sub-concession agreement in Nigeria in the second quarter of 2017.

“Excluding the impact of the interest rate swap pre-termination, impairment charge and termination of the sub-concession  agreement, consolidated net income attributable to equity holders would have increased by 29 percent,” the company said.

Meanwhile, gross revenues from port operations in 2018 increased 11 percent to $1.4 billion from $1.2 billion in 2017.

The increase in revenues was mainly due to volume growth; new contracts with shipping lines and services; increase in revenues from non-containerized cargoes, storage and ancillary services; tariff adjustments; and the contribution of the company’s new terminals in Lae and Motukea in Papua New Guinea and Melbourne, Australia.

“Excluding the new terminals, consolidated gross revenues would have increased by seven percent,” ICTSI said.

In 2018,ICTSI handled consolidated volume of 9,736,621 twenty-foot equivalent units (TEUs), six percent higher than the 9,153,458 TEUs handled in 2017.

The company attributed the  increase in volume to continuous improvement in trade activities; new contracts with shipping lines and services; and the contribution of new terminals in Papua New Guinea and Australia.

Excluding new terminals, consolidated volume would have increased by three percent in 2018.

Moreover, capital expenditures for 2018, excluding capitalized borrowing costs and payment of concession rights in Lae and Motukea in Papua New Guinea, amounted to $261.3 million.

This was mainly allocated for the capacity expansion in its terminal operations in Manila, Mexico and Iraq; continuing rehabilitation and development of the company’s container terminal in Honduras; procurement of additional equipment and minor infrastructure works in its newly acquired terminal operations in Papua New Guinea; and the completion of its new barge terminal project in Cavite City.

For this year, the company expects $380 million in capital expenditures.

“The estimated capital expenditure budget will be utilized mainly for the ongoing expansion projects in Manila, Mexico and Iraq; equipment acquisitions and upgrades; and for maintenance requirement,”ICTSI said.

ICTSI is a leading global developer, manager and operator of container terminals. It has experience record that spans six continents and continues to pursue container terminal opportunities around the world.