ICTSI net income up 29% in Q1

MANILA, Philippines - Listed port giant International Container Terminal Services Inc. (ICTSI) booked a stronger 29 percent growth in earnings in the first quarter of the year on the back of a non-recurring gain from the sale of a non-core asset in Cebu ICTSI informed the Philippine Stock Exchange (PSE) that its net income reached $52.4 million from January to March this year, or $11.7 million higher compared to the $40.7 million recorded in the same period last year.

 â€œThe higher net income attributable to equity holders was mainly due to the one-time gain on sale of a non-core asset,” ICTSI explained.

The port operator divested its interest in Cebu International Container Terminal Inc. last January to Cebu Asian Rim Property and Development Corp. and Hong Kong Land (Philippines) BV for a one-time gain of $13.2 million.

ICTSI’s net income would have gone up only by six percent to $45.1 million if the one-time gain on sale of a non-core asset, together with the off-setting higher interest on concession rights payable arising from the new concession contract of Operadora de Puerto Cortés S.A. de C.V. (OPC) in

Honduras, and the higher depreciation, amortization and start-up expenses from the new terminals Contecon Manzanillo S.A. de C.V. (CMSA) in Mexico and OPC were excluded.

Revenues from port operations rose 19 percent to $248.9 million in the first quarter from $209.3 million in the same period last year, while Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) inched up by six percent to $103.6 million from $97.5 million.

Consolidated volume handled by ICTSI jumped 17 percent to 1.757 million twenty-foot equivalent units (TEUs) in the first quarter of the year from 1.496 million TEUs in the same period due to the continuous improvement in international and domestic trade in most of the company’s terminals.

The increase was also traced to the new volume generated by new terminal operations in Mexico and Honduras . Without the two new terminals, the volume handled by ICTSI would have grown only by one percent.

ICTSI’s seven key terminal operations in Manila, Brazil, Poland , Ecuador, Madagascar, China and Pakistan accounted for 71 percent of the group’s consolidated volume in the first quarter of 2014.

 â€œThe increase in revenues was mainly due to higher storage revenues and ancillary services favorable volume mix, tariff rate increases in certain terminals, new and renegotiated contracts with shipping lines and forwarders, and the revenue contribution from the new terminals in Manzanillo, Mexico and Puerto Cortes , Honduras,” the company added.

Cash operating expenses in the first quarter of 2014 grew 28 percent to $108.2 million from $84.6 million in the same period in 2013 due to the inclusion of the cash operating expenses of the new terminals in Mexico and Honduras, higher manpower costs arising from volume growth and government-mandated and contracted salary rate adjustments in certain terminals, higher facilities-related expenses resulting from the cessation of the rent rebate program at ICTSI Oregon beginning January 2014, and higher business development expenses as the company pursued a number of bids for port projects.