ICTSI net income up 6% in 2014

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

International Container Terminal Services, Inc. (ICTSI) reported a net income of $182 million in 2014, up 6% compared with the previous year’s $172.4 million.

The port operator attributed the improvement to strong consolidated revenue as well as growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) driven by increased contributions from newer operations in Manzanillo, Mexico and Puerto Cortes, Honduras; consolidation of terminal operations in Yantai, China; and improved performance at Subic Bay, Philippines.

But net income was also negatively impacted by start-up costs and higher levels of operating expenses in Mexico, Honduras, and China; higher levels of depreciation expense; and increased interest expense driven by lower levels of capitalized interest during construction.

For the same period in review, EBITDA increased 17% to $443 million from $377.3 million.

Revenue reached $1.1 billion, 24% higher than the $852.4 million logged in 2013 and attributed to improved performance from several of its terminals.

In 2014, ICTSI handled consolidated volumes of 7.439 million twenty-foot equivalent units (TEUs), up 18% from 6.31 million TEUs handled in 2013. The increase was mainly due to the volume generated by Contecon Manzanillo S.A., Operadora Portuaria Centroamericana, S.A. de C.V, and ICTSI Iraq; new container terminals in Manzanillo, Puerto Cortes, and Umm Qasr, Iraq; positive impact of consolidation of terminal operations at the Port of Yantai in China; and 20% volume growth at the Baltic Container Terminal in Gdynia, Poland. Excluding the volume from the three new terminals, organic volume increase was only more than 2%, ICTSI said.

The port operator’s seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador, and Pakistan grew by 5% to account for 70% of consolidated volume in 2014.

Its Asia operations, which comprised terminals in the Philippines, China, Indonesia, and Pakistan, handled 3.821 million TEUs in 2014, an uptick of 0.8% from the 3.79 million TEUs handled in 2013, mainly due to the favorable impact of consolidation of terminal operations at Yantai, increased demand for services at Subic Bay International Container Terminal; and new shipping lines at Pakistan International Container Terminal, Ltd, ICTSI said.

Meanwhile, volume growth was “narrowed by the slight decline in throughput at MICT (Manila International Container Terminal) as a result of the modified truck ban policy imposed by the City of Manila early this year, weaker volume at DIPSSCOR (Davao Integrated Port and Stevedoring Services Corp.) arising from the shared market with a newly opened port, and lower imports and exports at MICTSI (Mindanao International Container Terminal Services, Inc.).” The Asia operations accounted for 51.4% of the consolidated volume for 2014.

The group’s capital expenditure for 2015 is about $530 million, up from $310 million in 2014. This year’s budget is mainly allocated for the completion of developments at the new container terminals in Mexico and Congo; capacity expansion at its terminal in Manila; and launch of the development of the new terminals in Iraq and Australia. On ICTSI’s joint venture into container terminal development with PSA International Pte Ltd. in Buenaventura, Colombia, the company invested $64.7 million in 2014, and expects to invest about $140 million in 2015 to complete the first phase of the project.

Currently, ICTSI is involved in 29 terminal concessions and port development projects in 21 countries worldwide.

Plans for barge terminal

Meanwhile Christian Gonzalez, ICTSI head for Asia, Pacific, and Subcontinent, told PortCalls in a chance interview of a plan to put up a barge terminal at MICT for international cargoes going to Cavite, specifically catering to economic zone shipments.

Asked if the terminal could be located in Sangley Point, former home of the US naval station, he said no because of the poor road network leading up to it.

For now the company’s priorities are still the inland container terminal (ICT) in Laguna and Berth 7 at MICT, both of which will be completed before the end of the year. Following these projects will be the rail connection for MICT and the ICT, and then the barge terminal.

ICTSI recently signed a joint venture with three Japanese companies to operate the ICT, and Gonzalez said they have begun moving containers there.

Equipment needed for the first phase is already in place, and the development of the second phase will start in a month or so, with a target completion of before the end of the year.

Gonzalez noted that storage fees at the ICT will be low in the interim then increased later “to encourage (clients) to pull (containers) out.”

He added that around 20% of imports passing through MICT can be transferred to the Laguna facility. – Roumina Pablo