Port operators post big gains in first semester

After a sluggish first quarter, the financial health of the country’s top port operators significantly improved in the second quarter of 2001 to post big first semester gains.

Financial statements submitted to the Securities and Exchange Commission show International Container Terminal Services Inc. (ICTSI) and Asian Terminals Inc. (ATI) both gaining headway during the second quarter, ending the six-month period with net income levels of P3 billion and P233 million, respectively.

In the first quarter, ATI reported a 21-percent drop in net earnings to P78 million while ICTSI fared no better, registering a P16.7-million loss.

ICTSI’s after-tax income went up substantially as a result of the one-time gain from the sale of its foreign terminals to Hong Kong’s Hutchison International Port Holdings Ltd.

Last June, ICTSI sold its entire 30-million founder shares in wholly-owned subsidiary ICTSI International Holdings Corp. (IIHC) to Hutchison for $70.3 million. IIHC operates eight container terminals in six countries: Argentina, Mexico, Saudi Arabia, Pakistan, Tanzania and Thailand.

Another fully-owned foreign-based subsidiary International Container Terminal Holdings Inc. (ICTHI) sold its stake in Ensenada Cruiseport Village, a Mexican cruise terminal, also to Hutchison for $30 million.

ICTHI also granted to Hutchison a put and call option over ICTSI’s 43.2-million preference B shares in IIHC for which ICTHI received $60 million.

With the sale, ICTSI will concentrate on its flagship port, the Manila International Container Terminal (MICT), along with the newly-acquired 30-year concession in the Port of Suape in northern Brazil.

Volume at the MICT, contracted by three percent in the first semester, from around 457 thousand ton-equivalent units (TEUs) to about 444 thousand TEUs due to the slowdown in the country’s trade shipments.

Last year, ICTSI earned P31.3 million, which was a huge improvement from a P1.3-billion loss in 1999 when the company struggled with higher amortizations of foreign exchange losses and the accretion of the put premium on its $140-million convertible bond issue.

For the period in review, ICTSI had changed its accounting policy on foreign currency transactions ahead of the effectivity of Exposure Draft No. 37 due for implementation in Jan. 2002. In previous periods, forex gains or losses from foreign-currency denominated long-term borrowings, except those related to the acquisition of property and equipment and foreign investments, were deferred and amortized over the term of the loan.

The change resulted in the write-off of the unamortized balance of deferred forex losses of P802 million, net of tax effect of P377 million, with unrealized forex losses amounting to P341.7 million in the first semester. The accretion of the put premium on the convertible notes, totaled P351.2 million.

For its part, ATI – the sole operator of three of the country’s main seaports (the South Harbor in Manila, Mariveles Grains Terminal in Bataan and the Port of Batangas) – improved its output in port operations and logistics management with a 12-percent increase in revenues to P1.62 billion in the first half, bringing up its net income at par with the same period last year.

ATI said it expects an increase in trade volume for the balance of the year as it continues to improve service standards in its business units through a planned P1-billion modernization and expansion of the South Harbor and its other facilities this year.

During the past year, ATI reported a 29-percent jump in earnings to P541 million, on higher revenues of P2.9 billion.