International Container Terminal Services, Inc. (ICTSI) are off to a strong start in the first quarter of 2019 as revenue from port operations increased 18% year-on-year to US$383.8m.
The growth was mainly attributed to a rise in volume, tariff adjustments at certain terminals, new contracts with shipping lines and services as well as an increase in revenue from non-containerised cargoes, storage and ancillary services.
Enrique K. Razon Jr, ICTSI chairman and president, said: “ICTSI has continued to grow and delivered a strong first quarter financial performance underpinned by operational improvements and higher contributions from our new ports including Victoria International Container Terminal (VICT) in Melbourne, Australia, Lae and Motukea in Papua New Guinea.”
ICTSI handled a consolidated volume of approximately 2.5m teu in the first quarter of 2019, 7% more than the amount handled during the same period of 2018.
The volume increase was due to improvements in trade activities, continuous volume ramp-up at some of the company’s terminals as well as new shipping lines and services.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) were up 25% at US$222.5m while net income attributable to equity holders increased 77% to US$72.4m from US$40.9m.
The financial performance of VICT, along with the improved operations at the company’s joint venture container terminal project with PSA Sociedad Puerto Industrial Aguadulce S.A (SPIA) in Buenaventura, Columbia, helped boost results.
SPIA posted a lower net loss share of US$6.3m compared to US$8.9m in the same period in 2018 as the company continued to elevated container volume which lifted SPIA’s EBITDA to a positive level for the quarter.
Consolidated cash operating expenses was 6% higher at US$112m, mainly due to government-mandated and contracted salary rate adjustments, an increase in IT-related expenses and a full quarter cost contribution to the Papua New Guinea terminals.
As a result of the prepayment of the CMSA project finance loan in May 2018, a lower interest expense led to consolidated financing charges and other expenses decreasing from US$31.1m to US$28.3m.
Approximately 16% of ICTSI’s US$380m capital expenditures budget was used during the first quarter as capital expenditures excluding capitalised borrowing costs amounted to US$59.6m.
The estimated budget will be mostly utilised for the ongoing expansion projects in Manila, Mexico and Iray, equipment acquisitions and upgrades as well as maintenances requirements.
Razon Jr added: “While we remain very mindful of the economic backdrop, we remain confident about the future prospects of the business as we build on this positive momentum.”