ICTSI net income up 11% to P3.44-B in H1

Port operator International Container Terminal Services Inc. posted a net income of P3.44 billion in the first half of the year, 11 percent higher than the year ago level, largely as a result of gains from the sale of interest in its international holding company.

The net profit included a P2-billion extraordinary gain from the completion of ICTSI’s sale of its foreign subsidiary’s investments in ICTSI International Holdings Inc. to Hutchison International Port Holdings Ltd. in June this year.

For the second quarter alone, profits of ICTSI fell 51.61 percent to P1.5 billion from P3.1 billion the same period last year. Net profits in 2002 included a P4.9-billion gain on sale of investment when ICTSI sold its shares in IIHC and Mexican passenger cruise terminal Ensenada Cruiseport Village S.A. de C.V.

Consolidated revenues rose 17 percent from P2.1 billion to P2.5 billion, primarily due to stronger volumes handled at the Manila International Container Terminal and the Subic Bay Freeport Naval Supply Depot and a new revenue stream from the Suape Container Terminal in Brazil, which commenced full operations in the second quarter of the year.

In March this year, ICTSI fully redeemed its $130-million convertible notes, reducing total interest-bearing debt from P7.7 billion at year-end 2001 to P2.24 billion by end-June 2002.

The company’s debt-to-equity ratio improved from 1.7 times last year to 0.38 times by June 2002. The improving financial condition has also enabled ICTSI to declare and pay out in June this year cash dividends amounting to P700 million.

The sale transaction to Hutchison involved the sale of 30 million founder shares in IIHC, a subsidiary of ICTSI holding interests in its foreign operations, for which ICTSI received $70.3 million.

The transaction likewise involved Hutchison’s buy-out of the minority shareholders in IIHC, namely: J.P. Morgan Capital L.P.; Sixty Wall Street Fund I.P.; Kane & Co.; Capital International Global Emerging Markets Private Equity Fund L.P. and the employees stock option plan.

IIHC operates eight container terminals in the six countries of Argentina, Mexico, Saudi Arabia, Pakistan, Tanzania and Thailand.

ICTSI chairman and president Enrique Razon said the firm’s objective is to clean up its balance sheet to rid of its debts in order to explore new business opportunities.