International Container Terminal Services, Inc. (ICTSI) reported a consolidated net income of US$132.7 million in 2019, a decline of 43.7% from the $235.8 million earned in 2018.
“ICTSI delivered a positive performance in 2019 with revenue and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) increasing by 7% and 10%, respectively. Recurring net income was US$259.1 million up 23% compared to the previous year but owing to the one-off non-cash impairment of the concession right assets of Tecplata S.A which we re-valued in light of prolonged difficult economic conditions in Argentina, net income fell,” ICTSI chairman Enrique Razon, Jr. said in a statement.
Gross revenues from port operations in 2019 increased 7% to $1.5 billion compared to $1.4 billion in 2018. The improvement was mainly due to volume growth; tariff adjustments at certain terminals; new contracts with shipping lines and services; higher revenues from ancillary services; and the contribution from the company’s new terminals in Lae and Motukea in Papua New Guinea, and Rio de Janeiro in Brazil.
Consolidated cash operating expenses in 2019 were 3% higher at $464.2 million compared to $452.2 million in 2018, mainly due to higher volume, government-mandated and contracted salary rate adjustments at certain terminals, unfavorable translation impact of Philippine peso expenses at Philippine terminals, and the cost contribution of the new terminals in Lae and Motukea and in Rio de Janeiro.
For 2019, ICTSI handled consolidated volume of 10.178 million twenty-foot equivalent units (TEUs), 5% more than the 9.737 million TEUs handled in 2018.
The increase in volume was mainly due to continuing ramp-up at ICTSI’s new terminals in Lae and Motukea, and the contribution of the new terminal in Rio de Janeiro; improvement in trade activities in Subic in the Philippines, Matadi in the Democratic Republic (DR) of Congo, and Basra in Iraq; and new contracts with shipping lines and services at Victoria International Container Terminal in Melbourne (Australia), Baltic Container Terminal in Gdynia (Poland), Adriatic Gate Container Terminal in Rijeka (Croatia), Batumi International Container Terminal in Batumi (Georgia), and Contecon Manzanillo S.A. in Manzanillo, Mexico.
Of the total volumes, 5.404 million TEUs were from the Asia segment, 2.98 million TEUs from the Americas, and 1.794 million TEUs from the Europe, Middle East, and Africa terminals.
Capital expenditures for 2019 amounted to $240.8 million, about 63% of the $380-million capital expenditure budget for the year. The group’s capital expenditure budget for 2020 is around $270 million, to be utilized mainly for the ongoing expansion projects at terminals in Manila and Mexico; yard expansion at the Congo terminal; equipment acquisitions and upgrades; and maintenance requirements.
Meanwhile, Razon said the global outbreak of the coronavirus disease has had an impact on volumes particularly those in Asia, and ICTSI is “closely reviewing developments across the regions in which we operate.”
“Whilst we cannot be certain how long this situation will last; we are seeking to mitigate this impact through rigorous cost control and increasing market share. ICTSI is an agile business and able to act swiftly to ensure the business remains robust during these uncertain times,” Razon said.
As of 2019, ICTSI is involved in 31 terminal concessions and port development projects in 18 countries worldwide. There are 10 terminal operations, including an inland container terminal, a barge terminal and combined terminal operations in Subic in the Philippines, two each in Indonesia, Papua New Guinea and Brazil; and one each in China, Ecuador, Poland, Georgia, Madagascar, Croatia, Pakistan, Honduras, Mexico, Iraq, Argentina, DR Congo, Colombia and Australia; and an existing concession to construct, develop and operate a port in Tuxpan, Mexico.
