ICTSI 1Q 2014 income up 29% to US$52.4 million [Seaport]
Volume up 17% to 1.8 million TEUs, revenues up 19% to US$248.9 million, EBITDA improves 6% to US$103.6 million
International Container Terminal Services, Inc. (ICTSI) reported unaudited consolidated financial results for the quarter ended 31 March 2014, posting revenue from port operations of US$248.9 million, an increase of 19 percent over the US$209.3 million reported for the same period last year; Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$103.6 million, six percent higher than the US$97.5 million generated in the first quarter of 2013; and net income attributable to equity holders of US$52.4 million, up 29 percent over the US$40.7 million earned in the same period last year.
The higher net income attributable to equity holders was mainly due to the one-time gain on sale of a non-core asset. In January 2014, the Company divested of Cebu International Container Terminal, Inc., a non-core asset, to Cebu Asian Rim Property and Development Corp. and Hong Kong Land (Philippines) BV for a one-time gain of US$13.2 million. Excluding the one-time gain on sale of a non-core asset, together with the off-setting of higher interest on concession rights payable arising from the new concession contract of Operadora de Puerto Cortés, S.A. de C.V. (OPC) in Honduras, and the higher depreciation, amortization and start-up expenses from new terminals Contecon Manzanillo S.A. de C.V. (CMSA) in Mexico and OPC, organic net income would have been six percent higher at US$45.1 million.
ICTSI handled a consolidated volume of 1,757,095 twenty-foot equivalent units (TEUs) for the quarter ended 31 March 2014, 17 percent more than the 1,496,462 TEUs handled in the same period in 2013.
The increase in volume was mainly due to the continuous improvement in international and domestic trade in most of the Company’s terminals, and the volume generated by the Company’s new terminal operations in Mexico and Honduras, which began operations in November and December 2013, respectively. Excluding the volume generated by the two new terminals, organic volume growth was up one percent.
The Company’s seven key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China and Pakistan accounted for 71 percent of the Group’s consolidated volume in the first quarter of 2014.
Gross revenues from port operations for the quarter ended 31 March 2014 surged 19 percent to US$248.9 million, from the US$209.3 million reported in the same period in 2013. The increase in revenues was mainly due to higher storage revenues and ancillary services, favorable volume mix, tariff rate increases in certain terminals, new and renegotiated contracts with shipping lines and forwarders, and revenue contribution from new terminals in Manzanillo, Mexico and Puerto Cortes, Honduras. Excluding revenues from the new terminals, organic revenue growth was five percent.
The Group’s seven key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China and Pakistan accounted for 76 percent of the Group’s consolidated revenues in the first quarter of 2014.
Consolidated cash operating expenses in the first quarter of 2014 grew 28 percent to US$108.2 million, from US$84.6 million in the same period in 2013. The increase was mainly driven by the inclusion of cash operating expenses of the new terminals in Mexico and Honduras, higher manpower costs arising from volume growth and government-mandated and contracted salary rate adjustments in certain terminals, higher facilities-related expenses resulting from the cessation of the rent rebate program at ICTSI Oregon beginning January 2014, and higher business development expenses as the Group pursued a number of bids for port projects during the period. Excluding cash operating expenses of the new terminals, total cash operating expenses would have increased by only five percent in the first quarter of 2014.
Consolidated EBITDA for the first quarter of 2014 increased six percent to US$103.6 million, from US$97.5 million in 2013 mainly due to volume growth, stronger revenues from storage and ancillary services, tariff increases in certain key terminals, favorable volume mix and the contribution of new terminals in Mexico and in Honduras. Excluding the contribution from CMSA and OPC, EBITDA would have increased by one percent. Consolidated EBITDA margin decreased to 42 percent in the first quarter of 2014 compared to 47 percent in the same period in 2013 mainly due to higher business development expenses and higher port fees, cash operating expenses and the start-up cost of the new terminals in Mexico and in Honduras.
Consolidated financing charges and other expenses for the quarter increased 15 percent, from US$12.6 million in 2013 to US$14.5 million in 2014 primarily due to lower capitalized borrowing cost on qualifying assets as CMSA started commercial operations in November 2013.
Capital expenditures for the first quarter of 2014 amounted to US$64.0 million, approximately 21 percent of the US$310.0 million capital expenditure budget for the full year 2014. The established budget is mainly allocated for the completion of phase one development of the Group’s new container terminals in Mexico and Argentina, and to start the development of terminals in Honduras and in the Democratic Republic of the Congo. In addition, ICTSI invested US$11.4 million for the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd. (PSA ) in Buenaventura, Colombia. The Goup’s share for 2014 is approximately US$120.0 million.
Posted at 20:59