Strong results for ICTSI in third quarter

Strong results for ICTSI in third quarter
VICT in Melbourne helped to boost throughput

International Container Terminal Services, Inc. (ICTSI) reached US$1bn in revenue from port operations in the first nine months of the year as throughput rose by 5%.

ICTSI handled 7.2m teu across all of it terminals while revenue from port operations increased 10% from US$918.3m.

The company attributed its success to volume growth, new contracts with shipping lines and services and the contribution of its new terminals in Lae and Motukea in Papua New Guinea and Melbourne, Australia.

Excluding the new terminals, consolidated throughput for the first three quarters would have increased 2%.

Profit was up 3% to US$153.3m mainly due to strong operating income from organic terminals and a US$2.8m non-recurring gain related to the pre-payment of the project finance loan at its terminal in Manzanillo, Mexico.

The company’s share in the net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA), its joint venture with PSA International Pte Ltd (PSA) in Colombia, decreased from US$25.6m to US$23.3m.

ICTSI’s consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was 6% higher at US$462.1m due to a growth in revenue and positive contributions from the new terminals.

The growth was weakened by a higher fixed port lease expense at Melbourne and consequently, EBITDA margin decreased from 47% to 46% in 2018.

Consolidated cash operating expenses was 16% higher at US$398m compared to US$343.3m due to the contribution of the new terminals, an increase of volume and increases in prices of fuel and higher repairs and maintenance at certain terminals.

Excluding the new terminals, consolidated cash operating expenses would have increased by only 4% while total cash operating expenses of the group increased by 9% to US$132.1m from US$121.7m.

Capital expenditure for the three quarters amounted to US$196.4m, approximately 52% of the US$380m budget for the year, which is mainly allocated for capacity expansion in ICTSI’s terminal operations in Manila, Mexico and Iraq.

The budget will also go toward development of the company’s container terminal in Honduras, the completion of its barge terminal project in Cavite City, Philippines and procurement of additional equipment and minor infrastructure works in Papua New Guinea.

Results for the third quarter alone were just as positive as revenue from port operations increased 9% to US$314.6m, consolidated EBITDA  increased by 12% to US$162.6m and net income was up 22% from US$45.7m to US$55.6m.

Consolidated throughput for the third quarter was 6% higher at 2.4m teu from 2.3m teu although excluding the new terminals, volume would have increased just 4%.