ICTSI books 4% income hike in Q1

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Manila International Container Terminal, flagship terminal of ICTSI. Photo courtesy of ICTSI.
Manila International Container Terminal, flagship terminal of ICTSI. Photo courtesy of ICTSI.
Manila International Container Terminal, flagship terminal of International Container Terminal Services, Inc. Photo courtesy of ICTSI.

International Container Terminal Services, Inc. (ICTSI) reported a 4% increase in net income for the first quarter of 2015 mainly due to higher volume handled and the contribution of new terminals.

In a disclosure to the Philippine Stock Exchange, ICTSI said its net income for January to March 2015 reached US$56.802 million from $54.660 in the same period in 2014.

Continued margin improvement at two container terminals—Contecon Manzanillo S.A. (CMSA) in Manzanillo, Mexico, and Operadora Portuaria Centroamericana, S.A. de C.V (OPC) in Puerto Cortes, Honduras—largely drove the positive performance as the two entered their second full year of commercial operations, the company said.

Excluding the one-time gain in January 2014 when ICTSI booked $13.2 million from divesting its holdings in Cebu International Container Terminal, Inc., recurring net income would have climbed 38% in the first quarter of 2015.

Gross revenues from port operations in the first quarter of the year surged 19% to $296.1 million from the $248.9 million reported in the same period in 2014.

ICTSI said the increase was mainly due to volume growth; higher ancillary services; tariff rate adjustments at certain terminals; new contracts with shipping lines and forwarders; and the favorable impact of consolidating terminal operations at Yantai, China.

Adding to the volume growth, too, were the continuing ramp-up at the terminals in Puerto Cortes, Honduras and Manzanillo, Mexico which posted increases of 67% and 49%, respectively; and the revenue contribution of the group’s new terminal in Basra, Iraq.

Excluding the new terminal in Iraq, organic revenue growth would be 17%. The group’s eight key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador, Pakistan, and Honduras accounted for 82% of consolidated revenues in the first quarter of 2015.

Volume-wise, the port operator reported a 13% hike to 1.983 million twenty-foot equivalent units (TEUs) for the first quarter of 2015 from 1.757 million TEUs handled in the same period in 2014.

ICTSI traced the increase to improved international and domestic trade in most of its terminals; new shipping lines and services; continuing volume ramp-up in terminal operations in Mexico and Honduras; favorable impact of terminal consolidation at Yantai, China; and the contribution of the new terminal in Basra, Iraq.

If the terminal in Iraq is excluded, organic volume growth would be 11%. ICTSI’s eight key terminal operations, which accounted for 77% of the group’s consolidated volume in the first quarter of 2015, grew 8% compared with the volume in same period last year.

In a media release, ICTSI said capital spent in the first quarter amounted to $64.2 million, about 12% of the $530-million budget for capital expenditure for the full year 2015. The established budget is mainly for completing developments at new container terminals in Mexico and Iraq, expanding capacity in Manila, and developing new terminals in the Democratic Republic of Congo and Australia.

In addition, ICTSI invested $16 million in SPIA, its joint venture container terminal project with PSA International Pte Ltd. in Buenaventura, Colombia. For 2015, the group’s share to complete phase one of the project is about $140 million.

ICTSI is currently involved in 29 terminal concessions and port development projects in 20 countries worldwide, which include 24 operating terminals in eight key ports; inland container terminals; four ongoing port development projects in Colombia, Argentina, Australia and DR Congo; and a sub-concession agreement to develop, manage, and operate a port in Nigeria.