ICTSI profit rise on one-time gains, port congestion dampens revenues

International Container Terminal Services, Inc. (ICTSI) reported a five percent improvement in unaudited attributable net income to US$135.7 million in the first nine months of 2014 from the US$128.8 million earned in the same period last year due to onetime gains.

In a disclosure to the Philippine Stock Exchange, ICTSI said revenue from port operations reached US$779.2 million, an increase of 25 percent over the US$624.7 million reported for the same period last year.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) rose 14 percent to US$326.1 million, from the US$285.5 million generated in the first nine months of 2013.

ICTSI said the increase in profit reflects the impact of higher container volume throughput levels due to the commencement of commercial operations at new terminals in Manzanillo, Mexico ( CMSA) and Puerto Cortes, Honduras (OPC) as well as more favorable volume mix and increased revenues from ancillary services at several existing terminals.

These positive factors were partially offset by increased depreciation charges and higher levels of interest expense driven by the commencement of commercial operations at CMSA and OPC.

In addition, net income for the first nine months of 2014 was positively impacted by the sale of a non- operating subsidiary in Cebu, Philippines (US$13.2 million), the termination of the management contract in Kattupalli, India (US$1.9 million), and the restructuring of ICTSI’s operations in Yantai, China (US$31.8 million).

These gains were reduced by a onetime non-cash charge of US$38.1 million arising from the write-down of intangible assets at its terminal in Buenos Aires, Argentina (TECPLATA S.A.).

Excluding these non- recurring items, net income for the first nine months would have been US$ 126.3 million, or two percent lower than the US$128.8 million reported in the prior year period.

ICTSI handled consolidated volume of 5,410,224 twenty-foot equivalent units (TEU) for the first nine months of 2014, 17 percent more than the 4,628,117 TEUs handled in the same period in 2013.

Excluding the volume from the Company’s new terminals, organic volume growth was minus one percent, principally due to the negative effect of the truck ban and related congestion issues at MICT, the Company’s largest facility in Manila, Philippines.