ICTSI profit surges 77% to $72.4 million in Q1

MANILA, Philippines — Port operator International Container Terminal Services Inc. (ICTSI) reported a 77 percent surge in its net income in the first three months of the year on the back of higher volume growth due to the opening of new ports.

In a disclosure to the Philippine Stock Exchange, ICTSI said its net income attributable to equity holders in the first quarter of the year soared to $72.4 million from $40.9 million earned in the same period last year.

The company attributed the growth to the strong operational and financial performance of VICT in Melbourne, Australia and a significant improvement in the operations at Sociedad Puerto Industrial Aguadulce S.A. (SPIA).

SPIA is joint venture container terminal project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia. ICTSI’s share in the net loss of the project decreased to $6.3 million in the first quarter of 2019 compared to $8.9 million in the same period in 2018 as the company continued to ramp-up container volume lifting SPIA’s EBITDA to positive level for the quarter.

Revenues from port operations in the first quarter also jumped 18 percent to $383.8 million from the $325.4 million reported in the same period last year.

“ICTSI has continued to grow and delivered a strong first quarter financial performance underpinned by operational improvements and higher contributions from our new ports including VICT in Melbourne Australia, Lae and Motukea in Papua New Guinea. While we remain very mindful of the economic backdrop, we remain confident about the future prospects of the business as we build on this positive momentum,” ICTSI chairman and president Enrique Razon said.

The company handled a consolidated volume of 2,478,672 twenty-foot equivalent units (TEUs) for the first three months of the year, a seven percent rise from the 2,325,540 TEUs handled in the same period last year.

“The increase in volume was primarily due to improvement in trade activities, new shipping lines and services and continuous volume ramp-up at certain terminals,” the company said.

Meanwhile, gross revenues from port operations for the period increased 18 percent to $383.8 million from the $325.4 million reported in the same period last year.

“The increase in revenues was mainly due to volume growth; tariff adjustments at certain terminals; new contracts with shipping lines and services; increased in revenues from noncontainerized cargoes, storage and ancillary services; and the contribution from the company’s new terminals in Lae and Motukea in Papua New Guinea,” ICTSI said.

Consolidated cash operating expenses increased five percent to $112 million from $106.2 million in the same period a year ago.

ICTSI attributed the increase in cash operating expenses to government-mandated and contracted salary rate adjustments at certain terminals; increase in information technology-related expenses; and full quarter cost contribution of the two terminals in Papua New Guinea.

The increase, however, was partially offset by the continuing cost optimization meassures implemented and the favorable translation impact of peso expenses at Philippine terminals, rupee expenses at Karachi, Pakistan, dollar expenses at Melbourne, Australia and reais based expenses at Suape, Brazil.

Moreover, capital expenditures excluding capitalized borrowing costs for the first quarter of 2019 amounted to $59.6 million, approximately 16 percent of the $380 million capital expenditures budget for the full year 2019.

“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 requirements,” the company said.

ICTSI is a leading global developer, manager and operator of container terminals in the 50,000 to three million TEU/year range. ICTSI operates in six continents and continues to pursue container terminal opportunities around the world.