Home>Specials>Business>ICTSI 9-moo. net income dips 1% to $182.6M

ICTSI 9-moo. net income dips 1% to $182.6M

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Enrique K. Razon, Jr., ICTSI chairman and president said: “I am pleased to report that our performance for the third quarter benefited from the cost preservation measures we took to mitigate the adverse effects of the pandemic. Our actions, together with improvements in global trade, a diversified portfolio, and high levels of customer service have helped to deliver an improved performance compared to the same period in the previous year.

“The pandemic continues to present uncertainties and we are very mindful of how unpredictable the environment is, as certain parts of the world move to a secondary lockdown, and we remain cautious. However, ICTSI is well positioned to benefit further should global trade continue to show signs of recovery, underpinned by our stringent cost management, ability to swiftly respond to changing situations and our diverse geographical presence,” Razon said.

International Container Terminal Services, Inc. hasreported unaudited consolidated financial results for the first nine months of the year, posting revenue from port operations of $1.104 billion, lower by 0.3 percent compared to the $1.107 billion reported for the same period last year; Earnings Before Interest, Taxes, Depreciation and Amortization of $643.2 million, three percent more than the $624.3 million generated in the first three quarters of 2019; and net income attributable to equity holders of $182.6 million, one percent lower than the $184.9 million earned in the same period last year due mainly to higher interest on concession rights payable and Covid-19-related expenses; partially tapered by higher operating income, improvement in net operating results at its greenfield terminal in Melbourne, Australia and lower equity in net loss of joint ventures.

Equity in net loss of joint ventures decreased by 28 percent to $12.7 million in the first nine months from $17.6 million for the same period in 2019 mainly due to the decrease in the company’s share in net loss at Sociedad Puerto Industrial Aguadulce S.A., its joint venture container terminal project with PSA International Pte Ltd. in Buenaventura, Colombia. Diluted earnings per share was unchanged at US$0.069 compared to the same period in 2019.

For the quarter ended September 30, revenue from port operations increased seven percent from $355.6 million to $379.3 million; EBITDA was 13 percent higher at $226.8 million from $199.9 million; and net income attributable to equity holders was at $69.2 million, 23 percent more than the $56.4 million in the same period in 2019.

Diluted earnings per share for the third quarter was 23 percent higher at $0.027 compared to $0.022 the same period in 2019.

ICTSI handled consolidated volume of 7,426,307 twenty-foot equivalent units in the first nine months, two percent less than the 7,590,090 TEUs handled in the same period in 2019.

The decrease in volume was primarily due to the decline in trade activities which resulted from the impact of the Covid-19 pandemic on global trade and lockdown restrictions.

Excluding the contribution of ICTSI Rio, the company’s new terminal in Rio de Janeiro, Brazil, consolidated organic volume would have decreased four percent in the first nine months. For the quarter ended September 30, total consolidated throughput was three percent higher at 2,626,542 TEUs compared to 2,548,175 TEUs in 2019.

Gross revenues from port operations for the first nine months was marginally lower by 0.3 percent at $1.104 billion compared to the $1.107 billion reported in the same period in 2019 due to the generally lower trade activities globally mainly as a result of the lockdown restrictions imposed by most governments to try to address the rising infection rate of the Covid-19 virus; partially tapered by the contribution of ICTSI Rio; tariff adjustments and new services at certain terminals.

Excluding contribution of ICTSI Rio, consolidated organic gross revenues would have decreased by three percent in the first nine months. For the third quarter, gross revenues increased seven percent from $355.6 million to S$379.3 million.

Consolidated cash operating expenses in the first nine months was three percent lower at $331.6 million compared to $341.6 million in the same period in 2019.

The decrease in cash operating expenses was mainly due to the continuous group-wide cost reduction and optimization measures; and favorable translation impact of Brazilian reais-based expenses in Suape, Brazil, Mexican peso-based expenses in Manzanillo, Mexico, and Pakistan Rupee-based expenses in Karachi, Pakistan.

The decrease was tapered by the cost contribution of ICTSI Rio, the company’s new terminal in Rio de Janeiro, Brazil. Excluding the cost contribution of ICTSI Rio, consolidated cash operating expenses would have decreased by eight percent in 2020.

Consolidated EBITDA increased three percent to $643.2 million for the first three quarters from $624.3 million in 2019 primarily due to lower cash operating expenses resulting from continuous group-wide cost reduction and optimization measures and positive contribution of the new terminal in Rio de Janeiro in Brazil; tapered by the slight decrease in revenues.

Excluding the contribution of ICTSI Rio, consolidated EBITDA would have increased by one percent in 2020. EBITDA margin, on the other hand, increased to 58 percent in the first nine months from 56 percent the previous year.

Consolidated financing charges and other expenses for the first nine months increased 11 percent from $95.2 million in 2019 to $105.5 million primarily due to Covid-19-related expenses and the absence of capitalized borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019.

Capital expenditures, excluding capitalized borrowing costs, for the nine months ended September 30 amounted to $128.6 million. The capital expenditures for the first nine months were mainly for the ongoing expansions at Manila International Container Terminal, Contecon Manzanillo S.A. in Manzanillo, Mexico, Contecon Guayaquil S.A. in Guayaquil, Ecuador, Basra Gateway Terminal in Umm Qsar, Iraq and ICTSI DR Congo in Matadi, Democratic Republic of Congo.

Amid the ongoing impact of the Covid-19 pandemic on global trade, the Group has reduced its capital expenditure plan for the year to approximately $160 million, which will be utilized mainly to complete the ongoing expansion projects.

ICTSI is a leading global developer, manager and operator of container terminals in the 50,000 to three million TEU/year range. ICTSI operates in six continents and continues to pursue container terminal opportunities around the world.