Billionaire Enrique K. Razon reported that his flagship International Container Terminal Services Inc. (ICTSI) hauled in $1.16 billion revenues from port operations in the first six months, up 10 percent versus the same period last year, and netted $313.80 million earnings, also up seven percent.
The chairman and president of ICTSI said Monday, Aug. 14, that its diversified portfolio, operational discipline, as well as higher operating income and interest income, along with lower COVID-19-related expenses boosted the company's earnings.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was $728.88 million, up eight percent.
Excluding the impairment of goodwill attributed to Pakistan International Container Terminal (PICT), net income attributable to equity holders would have grown 10 percent to $324.41 million.
Diluted earnings per share increased nine percent to $0.147 in 2023 from $0.135 in 2022.
“We have a robust balance sheet and a highly cash generative business which will enable us to continue our strong track record of investing in our terminals to support future growth," Razon stressed.
"Our estimated capital expenditure is US$400 million for the year, which will be used to expand and improve productivity and efficiency at terminals including Australia, Mexico, Philippines, Democratic Republic of Congo and Nigeria," he elaborated.
So far, capex for the first half amounted to $152.23 million, mainly for ongoing expansion and acquisition of equipment at CMSA in Manzanillo, Mexico, VICT in Melbourne, Australia, Manila International Container Terminal (MICT) and ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo.
"These investments are examples of our ongoing commitment to make our ports more efficient, accessible and globally competitive," he said.
While the macroeconomic and geopolitical climate continues to be uncertain, "The opportunities for future growth are considerable," Razon noted.
In the first six months of this year, ICTSI handled consolidated volume of 6,275,837 twenty-foot equivalent units (TEUs), nine percent more versus the same period in 2022.
The increase in volume was mainly due to the contribution of the Manila North Harbour Port Inc. (MNHPI) that was consolidated starting September 2022, improvement in trade activities, and new services at certain terminals.
However, this was tapered mainly by the impact of the expiration of concession contract at PICT in Karachi, Pakistan; cessation of cargo handling operations at Makassar Terminal Services (MTS) in Makassar, Indonesia and Davao Integrated Port and Stevedoring Services Corporation (DIPSSCOR), plus the slowdown in trade activities at certain terminals.
Gross revenues from port operations for the first half of 2023 increased by 10 percent to $1.165 billion due to the contribution of MNHPI and new businesses at IRB Logistica in Brazil as well as volume growth, tariff adjustments and higher revenues from ancillary services and general cargo business at certain terminals, among others.
Consolidated cash operating expenses was 15 percent higher at $325.85 million due to the costs contribution of MNHPI and of new businesses at IRB Logistica, and from government-mandated and contracted salary rate adjustments, increases in business development expenses and equipment repairs.
Consolidated EBITDA increased eight percent to $728.88 million due to higher revenues partially tapered by the increase in cash operating expenses.
EBITDA margin, on the other hand, remained flat at 63 percent in the first half of 2023.
Consolidated financing charges and other expenses increased three percent to $91.70 million due to higher interest and financing charges on short-term loan availments in the second and third quarters of 2022 and in the first quarter of 2023.
Long term-loan availed in first quarter of 2023 and a nonrecurring impairment of goodwill attributed to PICT likewise increased costs, although this was partially offset by lower Covid 19-related expenses.
ICTSI is a leading global developer, manager and operator of container terminals in the 50 thousand to 3.5 million TEU/year range.
ICTSI operates in six continents and continues to pursue container terminal opportunities around the world.