ICTSI net income up 9% in Q1

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ICTSI net income up 9% in Q1
Manila North Harbor port photo from International Container Terminal Services, Inc website.
  • International Container Terminal Services, Inc’s net income attributable to equity stakeholders grew 9% year-on-year in the first quarter
  • Total comprehensive income reached US$204.333 million, 6.5% higher
  • Revenue improved 8%
  • ICTSI handled 3.102-million TEUs in the first quarter, 9% more than the 2.833 million TEUs handled in the same period in 2022
  • The group’s estimated capital expenditure for 2023 is approximately $400 million

International Container Terminal Services, Inc.’s (ICTSI) net income attributable to equity holders went up 9% to $154.61 million in the first quarter from $142.28 million year-on-year. Earnings before interest, taxes, depreciation and amortization also grew 5% $354.20 million from $337.85 million, the company said in a statement.

For the same period in review, total comprehensive income amounted to $204.333 million, 6.5% higher than $191.796 million.

Revenue from port operations reached $572.25 million, an increase of 8% from the $528.27 million. The revenue improvement was mainly due to tariff adjustments, volume growth and higher revenues from ancillary services at certain terminals; contribution of Manila North Harbour Port, Inc. (MNHPI); and favorable translation impact mainly from the appreciation of Mexican peso-based revenues at Contecon Manzanillo S.A. (CMSA) in Manzanillo, Mexico, ICTSI said.

The company handled consolidated volume of 3.102 million twenty-foot equivalent units (TEUs) in the first quarter of 2023, 9% more than the 2.833 million TEUs handled year-on-year.

The increase in volume was primarily due to the contribution of MNHPI that was consolidated starting September 2022 as well as volume growth and new shipping lines and services at certain terminals.

The cessation of cargo-handling operations at PT Makassar Terminal Services (PT MTS) in Makassar, Indonesia and Davao Integrated Port and Stevedoring Services Corp. (DIPSSCOR) in Davao, Philippines; and decline in trade activities at certain terminals, particularly at Pakistan International Container Terminal in Karachi, Pakistan as the country succumbs to a severe economic crisis; and at Victoria International Container Terminal (VICT) in Melbourne, Australia where container trade volume in the Port of Melbourne contracted in the first quarter of 2023 due to weakening domestic demand amid rising inflation tapered volume growth.

“These results have been driven by our diversified portfolio and continued focus on margins, and they have been achieved against a challenging macroeconomic and geopolitical backdrop,” ICTSI chairman and president Enrique Razon, Jr. said.

“Looking ahead, whilst we remain cautious of continued uncertainty, ICTSI is a strong and agile business differentiated by our strategy in origin and destination gateway terminals as well as an experienced team with a sharp focus on operational discipline, which positions us well for future growth,” Razon added.

Consolidated cash operating expenses for the first quarter of 2023 was 19% higher at $163.14 million compared to $137.11 million for the same period in 2022. The increase in cash operating expenses was driven by higher equipment and facilities-related expenses, mainly fuel and repairs; government-mandated and contracted salary rate adjustments; costs contribution of MNHPI and of new businesses at IRB Logistica; other revenue-generating activities; and unfavorable foreign exchange effect of Mexican peso-based expenses at CMSA.

ICTSI said the expenses were partially tapered by continuous cost-optimization measures implemented; favorable foreign exchange effect mainly of Pakistani rupee- and Philippine peso-based expenses at the terminals in Pakistan, and the Philippines, respectively; and the termination of cargo-handling operations at PT MTS and DIPSSCOR.

Capital expenditures amounted to $87.69 million for the first quarter of 2023. These were mainly for ongoing expansions and acquisition of equipment at CMSA in Manzanillo, Mexico; VICT in Melbourne, Australia, Manila International Container Terminal in the Philippines; and ICTSI DR Congo S.A. in Matadi, Democratic Republic of Congo.

The group’s estimated capital expenditure for 2023 is approximately $400 million. It will be utilized mainly for the ongoing expansion at the company’s terminals in Australia, Mexico, Philippines, and Congo; second tranche of concession extension related expenditures in Madagascar; yard expansion at the port in Nigeria; quay expansion at ICTSI Rio in Brazil; development of a newly acquired terminal in East Java in Indonesia; equipment acquisitions and upgrades; and for maintenance requirements.

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