ICTSI okays additional dollar notes to pay off debts

MANILA, Philippines - Port operator International Container Terminal Services Inc. (ICTSI) has approved the additional issuance dollar-denominated corporate notes, proceeds of which will be used to refinance existing debt obligations.

The company said the new notes, the amount of which was not disclosed, will be consolidated and form a single series with the $250-million senior notes it issued last March 17.

As of Dec. 31, 2009, ICTSI’s total interest-bearing debt stood at $433.9 million. About $7.4 million of its debts are maturing this year.

The company’s capital expenditure for 2010 is estimated at $123 million, to be funded from a combination of internally-generated funds, new bank loans and available cash balances.

Consolidated net income for 2009 decreased to $52 million, or 14.7 percent lower than the $61 million generated a year earlier.

Company officials said the decrease in consolidated net income was associated with the contraction in cargo throughput, higher depreciation and amortization expense, increase in debt level, and a weaker peso against the dollar in 2009 compared to 2008. Excluding the foreign exchange translation impact, consolidated net income should have declined by only 8.6 percent.

Net income attributable to equity holders, or net profits excluding minority interests for the year, amounted to $54.9 million or 14.5 percent lower from $64.2 million in the same period of the preceding year.

Gross revenues from port operations declined nine percent, from $463 million to $421.6 million, while earnings before interests, taxes, depreciation and amortization (EBITDA) dropped 10.6 percent, from $196.4 million to $175.6 million. The drop in EBITDA was primarily due to the volume contraction resulting from the global economic slump and the unfavorable volume and revenue mix in 2009.

Consolidated volume handled for the full year declined 4.8 percent to 3.557 million 20-foot equivalent units (TEUs) from 3.734 million TEUs in 2008. The decrease was mainly attributable to the fall in international trade resulting from the global economic crisis which started in the fourth quarter of 2008.

Volume throughput from the group’s Asian port operations increased 3.2 percent to 2.25 million TEUs during the year compared to 2.18 million TEUs in 2008. Excluding the new terminals, volume of Asian ports should have declined by 2.9 percent year-on-year mainly due to the contraction in volume at the Manila International Container Terminal (MICT). Asian port operations contributed 63.3 percent to the group’s consolidated volume compared to 58.4 percent in 2008.

MICT, ICTSI’s flagship terminal, handled 1.39 million TEUs in 2009 or a decline of 7.8 percent from 1.5 million TEUs in the preceding year. The decline in volume mainly resulted from the drop in exports to the US and Japan, the Philippines’ major trading partners, as these economies and consumer demand slowed significantly. MICT accounted for 39.2 percent of the group’s consolidated volume for the full year 2009 against 40.5 percent in 2008.