ICTSI first quarter net income up 29%

International Container Terminal Services, Inc. (ICTSI) reported consolidated unaudited financial results for the quarter ending 31 March 2008,

posting revenue from port operations of PHP=4,506 million and net income attributable to equity holders of PHP=799 million. 

Revenues for the quarter grew 45 percent over PHP=3,118 million last year, while net income attributable to equity holders improved by 29 percent, from PHP=618 million in the same period last year.  Beginning 1 January 2008, ICTSI was required to adopt IFRIC Interpretation 12 – Accounting for Service Concession Agreements, and first quarter results reflect the adoption of this standard.  The 2007 first quarter results have also been restated to conform with the requirements of IFRIC 12. 

“ICTSI has gotten off to a terrific start in 2008.  Volumes at our four base terminals in Manila, Poland, Brazil, and Madagascar grew by 9 percent in spite of the 12-day strike at our terminal in Poland, and revenues at these same four terminals increased by a healthy 18 percent.  In addition, we continue to make good progress in improving profitability levels at the five terminals we acquired last year in China, Syria, Georgia, Ecuador, and Colombia.  We continue to see strong volume trends across our portfolio,” said Enrique K. Razon Jr., ICTSI chairman and president. 

ICTSI handled consolidated volume of 841,756 twenty foot equivalent units (TEUs) in the first quarter of 2008, 31 percent higher compared to the 642,475 TEUs handled in the same period in 2007.  Domestic operations accounted for 427,064 TEUs handled, or 51 percent of consolidated volume, for the period.  Volume at the company’s Manila operation increased by 14 percent, from 315,784 TEUs in the first quarter of 2007 to 360,636 TEUs in the same period of 2008, contributing 43 percent of total consolidated volume.  Foreign container volume grew 53 percent over last year, driven principally by the addition of the company’s Ecuador, Syria and Georgia port operations, and exceptionally strong growth at the company’s operations in Madagascar and Indonesia.  Foreign container volumes now account for 49 percent of total as compared with 42 percent in the same period last year and 46 percent for the full year 2007. 

First quarter gross revenues from port operations increased 45 percent to P,=4,506 million, from the PHP=3,118 million reported in the first quarter of 2007 due largely to revenues from new port operations in Ecuador, Syria and Georgia and strong organic growth at the company’s operations in Brazil, Madagascar, China, and Manila and Davao in the  Philippines.  Revenue contribution from the international operations grew 83 percent, from PHP=1,334 million in the first quarter of 2007 to PHP=2,445 million in 2008.  Foreign operations accounted for 54 percent of this quarter’s consolidated gross revenue, as compared to 43 percent in the first quarter of 2007.  Revenue contribution from the domestic operations, on the other hand, grew 16 percent, from PHP=1,784 million in 2007 to PHP=2,062 million in 2008. 

Net revenues, or revenues from port operations after deducting Port Authorities’ share, totaled PHP=3,900 million, an increase of 45 percent over the same period last year.  Port Authorities’ share represents fees and payments to the respective port authorities at each of the terminal locations of ICTSI.  Total Port Authorities’ share in 2008 revenues grew 39 percent to PHP=607 million, from PHP=437 million in the same period last year.

Total consolidated cash operating expenses for the quarter increased 46 percent to PHP=1,932 million, from PHP=1,328 million in the first quarter of 2007 due principally to the additional expenses from new port operations in Ecuador, Syria and Georgia and the increase in fuel, manpower, equipment and utilities consumptions related to the increase in TEU volumes at the company’s existing operations in Manila, Madagascar, Indonesia and Davao, Philippines.  Consolidated financing costs and bank charges for the quarter, on the other hand, decreased 18 percent from PHP=136 million to PHP=110 million due to lower debt level and lower borrowing cost compared to the same quarter in 2007. 

For the quarter in review, consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) improved 45 percent to PHP=1,967 million, from PHP=1,353 million in the same period in 2007.  Restated consolidated EBITDA margin for the first quarter, on the other hand, slightly increased, from 43.4 percent in 2007 to 43.7 percent in 2008. 

In the first quarter of 2008, ICTSI invested PHP=1,115 million to expand the handling capacity and improve the operating efficiency of the company’s operations in Manila, Brazil and Madagascar and pay for the acquisition and rehabilitation of the new terminals in Ecuador, Syria, Georgia, and Colombia.  The company’s estimated consolidated capital expenditure for the full year 2008 is PHP=11,626 million.  This will fund additional handling capacity and operating efficiency improvements in the company’s major terminals in Manila, Poland, Brazil, Madagascar, and new terminals in Ecuador, China, Syria, Georgia and Columbia.  The company expects to meet funding requirements for these expenditures from internally generated funds and a committed bank facility. 

Source: Transportweekly