Papua New Guinea terminals and new services help boost ICTSI’s Q3 results

Papua New Guinea terminals and new services help boost ICTSI’s Q3 results

International Container Terminal Services Inc. (ICTSI) has reported a 10% year-on-year increase in revenue from port operations for the first nine months of 2019 to US$1.1bn as throughput grew by 6% to 7.6m teu in the same period.

The increase in volume was mainly attributed to continuing ramp-up at ICTSI’s new terminals in Lae and Motukea in Papua New Guinea and improvement in trade activities in Subic, Philippines, Matadi, Democratic Republic of Congo and Basra, Iraq.

New contracts with shipping lines and services at its Victoria International Container Terminal (VICT) in Melbourne, Australia, Baltic Container Terminal (BCT) in Gdynia, Poland, Adriatic Gate Container Terminal (AGCT) in Rijeka, Croatia and Contecon Manzanillo in Mexico also helped boost volumes.

In addition to the aforementioned, the 10% increase in gross port revenues also benefitted from tariff adjustments at certain terminals and an increase in revenues from storage and ancillary services.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the first nine months of 2019 was reported at US$624.3m, up 14% from US$546.4m generated in the same period of 2018.

Net income attributable to equity holders of US$184.9m grew by 29% compared to US$142.9m earned last year, mainly due to strong operating income contribution from the terminals in Democratic Republic of Congo, Iraq, Mexico and Manila and Subic in the Philippines.

The new services at VICT, the ramp-up of volumes in Paua New Guinea and a decrease in equity in net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA), ICTSI’s joint venture container terminal with PSA in Buenaventura, Colombia, also contributed to the net income result.

The growth was partially tapered by the acceleration of debt issue costs associated with the partial prepayment of Euro-dominated term loan in July 2019 and the non-recurring gain from the interest rate swap related to the prepayment of the project finance loan at its terminal operations in Manzanillo, Mexico in 2018.

Excluding the non-recurring items, consolidated net income attributable to equity holders would have increased by 34% in 2019.

Enrique K. Razon, Jr., chairman and president of ICTSI, said: “ICTSI has continued to deliver strong financial performance driven by organic volume growth, diligent cost management, and the continued ramp up of newer terminals.

“Positive progress has been made across the business which in part has been enabled by the prudent investments we make in our brownfield terminals.”

For the quarter ended September 30, 209, revenue from port operations increased 3% from US$344m to US$355.6m while EBITDA was 5% higher at US$199.9m from US$190.3m.

Total consolidated throughput in the same period was 5% higher at 2.5m teu compared to 2.4m teu in 2018.

Consolidated cash operating expenses in the first nine months of 2019 grew by 3% at US$341.6m compared to US$331.6m last year due to higher volume, government-mandated and contracted salary rate adjustments at certain terminals and the full nine months cost contribution from the Papua New Guinea terminals.