ICTSI’s net profit falls to $42.2M in first quarter

International Container Terminal Services, Inc. (ICTSI) reported a 22 percent decline in unaudited consolidated attributable net income to $42.2 million in the first quarter of 2016 from the $54.0 million earned in the same period last year.

In a disclosure to the Philippine Stock Exchange, ICTSI said “the decline in earnings was mainly driven by lower storage and ancillary revenues, unfavorable container volume mix, lower capitalized borrowing cost, higher depreciation and amortization expenses and start-up costs of new terminals and projects.”

Revenue from port operations of $266.5 million, a decrease of 10 percent from the US$296.1 million reported for the same period last year.

ICTSI handled consolidated volume of 2.05 million twenty-foot equivalent units (TEUs) for the quarter ended March 31, 2016, four percent more than the 1.98 million TEUs handled in the same period in 2015.

The increase in volume was mainly due to the acquisition of new shipping line customers and services at ICTSI’s terminals in Guayaquil, Ecuador, Manzanillo, Mexico, and Karachi, Pakistan; continuing rampup at ICTSI Iraq; and improvement in trade activities at the Company’s terminals in Jakarta, Indonesia and most Philippine ports.

The decrease in revenues was mainly due to unfavorable container volume mix, lower storage & ancillary revenues and unfavorable translation impact of the depreciation of local currencies to the US dollar at certain terminals.

The decline in gross revenues was tapered by tariff rate adjustments and new contracts with shipping lines and services at certain terminals, and the continuing ramp-up at ICTSI Iraq.

Excluding the translation impact of local currency depreciation to the US dollar, particularly the 36 percent depreciation of the Brazilian Reais (BRL) at TSSA; the 21 percent depreciation of the Mexican Peso (MXN) at CMSA; and the six percent depreciation of the Philippine Peso (PHP) at the various Philippine terminals, consolidated gross revenues would have decreased by six percent in 2016.

Capital expenditures, excluding capitalized borrowing costs and expenses, for the first quarter of 2016 amounted to $89.5 million, approximately 21 percent of the $420.0 million capital expenditure budget for the full year 2016.

The established budget is mainly allocated for the completion of the initial stage of the Company’s new container terminals in Democratic Republic of Congo and Iraq, and the continuing development of the Company’s project in Australia.

In addition, ICTSI invested $20.0 million in the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd. (PSA ) in Buenaventura, Colombia.

The Company’s share for 2016 to complete the initial phase of the project is approximately $60 million.