ICTSI profit surges 23% in January-June

MANILA, Philippines - Publicly-listed port giant International Container Terminal Services Inc. (ICTSI) of port and gaming magnate Enrique Razon  recorded a 23-percent increase in earnings in the first half of the year on the back of higher revenues particularly from its overseas operations.

ICTSI said that its net income amounted to $87.4 million from January to June or $16.3 million higher than the previous year’s  to $71.1 million due to strong revenue growth and margin improvement in certain key terminals and the contribution of the new terminal in Karachi Pakistan.

In its unaudited consolidated financial results for the first six month, ICTSI said revenue from port operations jumped 20 percent to $413.7 million from $345 million.

“The increase in revenues was mainly due to higher storage revenues and ancillary services, favorable volume mix, tariff rate increases in certain key terminals, and the revenue contribution from the new terminals in Jakarta, Indonesia and Karachi, Pakistan,” ICTSI said.

Excluding the revenues from the newly acquired terminals and the effect of the cessation of the operations in Syria last January, ICTSI said organic revenue growth was at eight percent wherein operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan accounted for 85 percent of the consolidated revenues.

This translated to a 26-percent increase in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) to $188.1 million from $149.2 million.

The port operator reported a 12-percent increase in consolidated volume of handled cargoes to 3.027 million twenty-foot equivalent units (TEUs) in the first six months of the year from 2.697 million TEUs in the same period last year.

ICTSI also traced the growth to the volume generated by newly acquired ports including Pakistan International Container Terminal (PICT) in Karachi, Pakistan as well as PT Olah Jasa Andal (PT OJA) in Jakarta, Indonesia.

Excluding the volume from the two recent port acquisitions and the effect of the cessation of the operations in Syria last January, organic volume growth remained flat as operations in seven key terminals accounted for 79 percent of the consolidated volume.

For the second quarter alone, ICTSI’s net income surged 26 percent to $44.2 million from $35 million in the same quarter last year as gross revenues climbed 19 percent to $204.4 million from $171.2 million.

Total consolidated throughput rose 13 percent to 1.53 million TEUs in the second quarter of the year from 1.36 TEUs in same quarter last year.

ICTSI said its consolidated cash operating expenses increased 15 percent to $171.9 million from $149 million driven by higher volume-related expenses such as on-call labor, fuel, power and repairs and maintenance as well as government-mandated and contracted salary rate increases in certain terminals, higher business development expenses, and the inclusion of the expenses of the two new terminals.

Consolidated financing charges and other expenses jumped 53 percent to $24.8 million from $16.2 million due to higher outstanding interest-bearing debt.

ICTSI issued $400 million of 10-year bonds in January 2013 mainly to fund its capital expenditure program for 2013 and refinance medium-term loans.