ICTSI profit climbs 5% in 9 mos

MANILA, Philippines - Earnings of port giant International Container Terminal Services Inc. (ICTSI) climbed five percent in the first nine months of the year on the back of higher volume handled by its domestic and international ports.

ICTSI reported yesterday that its net income amounted to $142.3 million from January to September this year or $6.6 million higher compared to the $135.7 million booked in the same period last year.

Gross revenues from port operations jumped 25 percent to $779.2 million from $624.7 million amid the 17 percent increase in handled consolidated volume to 5.41 million twenty-foot equivalent units (TEUs) in the first nine months of the year from 4.63 million TEUs in the same period last year with the launching of new terminals in Manzanillo, Mexico (CMSA) and Puerto Cortes, Honduras (OPC).

ICTSI said the positive factors were partially offset by increased depreciation charges and higher levels of interest expense driven by the commencement of commercial operations at CMSA and OPC.

It added that all three geographical segments reported double-digit growth in gross revenues with Americas posting a remarkable growth of 46 percent, followed by emerging East Asia at 15 percent, and Asia at 13 percent.

ICTSI’s terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan posted a strong growth of 10 percent and accounted for 75 percent of the group’s consolidated revenues in the first nine months of 2014.

Likewise, ICTSI also cited other gains amounting to $31.8 million form the restructuring of its operations in Yantai, China; $13.2 million form the sale of a non-operating subsidiary in Cebu; and $1.9 million form the termination of the management contract in Kattupalli, India.

However, the port operator incurred a one-time non-cash charge of $38.1 million arising from the write-down of intangible assets at the company’s terminal in Buenos Aires, Argentina (TECPLATA S.A.).

Without the non-recurring items, ICTSI reported that its earnings would have slipped by two percent to $126.3 million in the first nine months of the year from $128.8 million in the same period last year.

ICTSI’s operating expenses jumped 31 percent to $334.1 million from $255.5 million due mainly driven by higher volume-related expenses, government-mandated and contracted salary rate increases in certain terminals, increased business development activities, and cash operating expenses and start-up costs of new terminals.

For the third quarter alone, the company’s net income fell 26 percent to $34.1 million from $45.9 million in the same quarter last year due to the start up costs and consolidation of the operating expenses of the new terminals, lower capitalized borrowing cost at CMSA, and the recognition of $38.1 million impairment charge on intangible assets in TECPLATA.