ICTSI posts strong H1 despite geopolitical headwinds

MANILA, Philippines — Ports operator giant International Container Terminal Services Inc. (ICTSI) finished the first semester relatively unscathed by ongoing geopolitical headwinds, with earnings rising by 42 percent year-on-year to $128.5 million.

ICTSI attributed its profit growth during the six-month period to improved operating income contribution from the terminals in Iraq, Australia and Subic in the Philippines, the continuing ramp-up at the new terminals in Papua New Guinea, and a decrease in equity in net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA) in Colombia. 

The increase, however, was partially tapered by a non-recurring gain from the interest rate swap related to the pre-payment of the project finance loan at its terminal operations in Manzanillo, Mexico in 2018.

For the second quarter alone, ICTSI’s net income attributable to equity holders went up by 14 percent to $56.1 million from $49.4 million in the same period last year.

ICTSI said its consolidated net income attributable to equity would have increased by 20 percent for the quarter if the non-recurring pre-termination gain from the interest rate swap at CMSA in Manzanillo, Mexico in 2018 would be excluded.

 “ICTSI’s performance in the first half of 2019 has been very positive. The group’s focus on generating high quality earnings from our ports, ramping up activities at our newer terminals and strong cost control has enabled us to continue to deliver on our strategic objectives,” ICTSI chairman and president Enrique Razon said.

“Our business remains relatively unscathed by current geopolitical headwinds, but we remain vigilant and continue to monitor the situation closely. ICTSI is a robust business, strongly placed for the second half and the Board remains confident of the future,” Razon said.

Gross revenues from port operations for the first half jumped by 14 percent year-on-year to $751.8 million, driven by volume growth, tariff adjustments for certain services at multiple terminals, and new contracts with shipping lines and services, among others.

ICTSI handled consolidated volume of 5.041 million twenty-foot equivalent units (TEUs) in the first semester, seven percent more than the 4.714 million TEUs recorded in the same period in 2018. 

The increase in volume was attributed mainly to continuing ramp-up at ICTSI’s operations in Australia and Mexico, improvement in trade activities in Subic and Croatia, new shipping lines and services in Poland, and the new terminals in Lae and Motukea in Papua New Guinea.

In the first half, ICTSI has spent approximately 32 percent of the $380 million capital expenditures budget for 2019.

ICTSI’s capex budget for this year will be utilized mainly for the ongoing expansion projects in Manila, Mexico and Iraq as well as equipment acquisitions, upgrades, and for maintenance requirements.

ICTSI is global developer, manager and operator of container terminals in 19 countries across six continents.