ICTSI net income up 50% in H1

Published August 4, 2022, 5:41 PM

by Emmie V. Abadilla

Global port operator International Container Terminal Services Inc. (ICTSI) registered a 50 percent increase in net income to $294.5 million in the first half this year from $196.7 million in the same period 2021 primarily due to higher operating income, higher net foreign exchange gain, increase in equity share in net profit of joint ventures, and strong contribution of new terminals.

Enrique K. Razon, Jr., ICTSI Chairman and President.reported that revenues from its global port operations of reached $1.06 billion, an increase of 20 percent from the $882.6 million, resulting in a net income of $294.5M up 50 percent, for the first six months of 2021.

The terminal operator’s Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was $672.1 million, 26 percent higher than the $532.5 million generated the same period last year.

“We have delivered another period of strong operational and financial results across our global portfolio with throughput growth of five percent,” said Razon.

“Revenues grew by 20 percent to US$1.06 billion and EBITDA increased by 26 percent to US$672.1 million driven by volume growth, strong contribution from new terminals and an improvement in trade activities as economies recover from the impact of lockdown restrictions and the COVID-19 pandemic.”

“Over the years, we have demonstrated our resilience and the benefits of having a clear strategic market position and a disciplined and purpose-led culture. Despite external challenges, we remain confident in driving growth across our global business and generating long-term sustainable value for the benefit of all our stakeholders.”

For the quarter ended June 30, 2022, revenue from global port operations increased 20 percent from $447.0 million to $534.6 million.

EBITDA was 25 percent higher at $334.3 million from $267.7 million; and net income attributable to equity holders was at $152.2 million, 43 percent more than the $106.6 million in the same period in 2021.

Diluted earnings per share for the second quarter of 2022 was 57 percent higher at $0.070 compared to $0.045 in the same period in 2021.

ICTSI handled consolidated volume of 5,752,582 twenty-foot equivalent units (TEUs) in the first six months of 2022, five percent more compared to the 5,459,523 TEUs handled in the same period in 2021

This was primarily due to volume growth and general improvement in trade activities as economies continue to recover from the impact of the COVID-19 pandemic and lockdown restrictions; and new shipping lines and services at certain terminals.

For the quarter ended June 30, 2022, total consolidated throughput was six percent higher at 2,919,581 TEUs compared to 2,751,731 TEUs in 2021.

Gross revenues from the Company’s global port operations for the first half of 2022 increased by 20 percent to $1,062.9 million compared to the $882.6 million reported in the same period in 2021 mainly due to volume growth at most terminals.

Favorable container mix; tariff adjustments at certain terminals; new contracts with shipping lines and services; higher revenues from ancillary services, and contribution of new terminals Manila Harbor Center Port Services, Inc. (MHCPSI) in the Philippines, International Container Terminal Services Nigeria Ltd. (ICTSNL) in Nigeria and IRB Logistica in Brazil also helped.

Excluding the contribution of the new terminals in Philippines, Nigeria and Brazil, consolidated gross revenues from its global port operations would have increased by 17 percent in the first half of 2022. For the second quarter of 2022, gross revenues increased 20 percent from $447.0 million to $534.6 million.

Consolidated cash operating expenses in the first six months of 2022 was 14 percent higher at US$283.9 million compared to $248.2 million in 2021.

The increase in cash operating expenses was mainly due to additional cost associated with the new terminals in Philippines, Nigeria and Brazil; higher equipment and facilities-related expenses resulting from increase in prices and consumption of fuel and power driven by volume growth; higher contracted services and overtime as a result of volume increase at certain terminals; government-mandated and contracted salary adjustments; and unfavorable foreign exchange effect of BRL-based expenses at ICTSI Rio and Tecon Suape S.A. (TSSA) in Brazil.

Consolidated financing charges and other expenses increased 30 percent to US$88.9 million for the first six months ended June 30, 2022 from $68.6 million in 2021 mainly due to higher interest and financing charges on borrowings primarily due to the issuance of $300 million senior notes in November 2021 which funded the redemption of $183.8 million worth of 5.875 percent and $85.2 million of 4.875 percent senior guaranteed perpetual capital securities with call dates in 2022 and 2024, respectively; the consolidation of the outstanding loan of the Company’s new terminal in the Philippines; and higher COVID-19 related expenses.

Capital expenditures, excluding capitalized borrowing costs, amounted to US$231.3 million for the first six months of 2022.

These were mainly for ongoing expansion projects at Manila International Container Terminal (MICT) in the Philippines, VICT in Melbourne, Australia, ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo, Contecon Manzanillo S.A. de C.V. (CMSA) in Manzanillo, Mexico, and the acquisition of land in the Philippines and in Brazil for new projects.

The Group’s capital expenditure budget for 2022 is approximately US$330.0 million.

This will be utilized mainly for the payment of the concession extension upfront fees at Madagascar International Container Terminal Services Ltd. (MICTSL); ongoing expansion at the Company’s terminals in Democratic Republic of Congo, Australia, Mexico and Philippines; equipment acquisitions and upgrades; and for various maintenance requirements.