International Container Terminal Services, Inc. (ICTSI) reported a net income of US$249.8 million in 2018, 20% higher than the recorded income of $207.7 million in 2017, as volumes handled by the global port operator grew.
Net income attributable to equity holders was also up by 22% to $221.5 million from $182.1 million in 2017, ICTSI said in a statement.
The increase was mainly due to strong operating income from organic terminals; a decrease in the company’s share in the net loss at Sociedad Puerto Industrial Aguadulce S.A.; lower restructuring and separation costs; and a $2.8 million non-recurring gain from the pre-termination of interest rate swap related to the operator’s terminal in Manzanillo, Mexico in May 2018.
The increase, however, was tapered by higher fixed port lease expense in Melbourne, Australia; a $5.8 million non-recurring impairment charge on the goodwill at its terminal in Davao, Philippines in 2018; and a $7.5 million non-recurring gain on the termination of the sub-concession agreement in Nigeria in the second quarter of 2017.
Excluding the impact of the interest rate swap pre-termination, impairment charge and termination of the sub-concession agreement, consolidated net income attributable to equity holders would have increased by 29%.
Gross revenues from port operations in 2018 increased 11% to $1.4 billion compared to $1.2 billion reported in 2017. The increase was mainly due to volume growth; new contracts with shipping lines and services; increase in revenues from non-containerized cargoes, storage and ancillary services; tariff adjustments; and the contribution of the company’s new terminals in Lae and Motukea in Papua New Guinea, and in Melbourne, Australia. Excluding the new terminals, consolidated gross revenues would have increased by 7%.
ICTSI handled consolidated volume of 9.737 million twenty-foot equivalent units (TEUs) in 2018, or 6% more than the 9.153 million TEUs recorded in 2017. The increase in volume was mainly due to continuous improvement in trade activities; new contracts with shipping lines and services; and the contribution of the new terminals in Lae and Motukea, and Melbourne. Excluding the new terminals, consolidated volume would have increased by 3% in 2018, ICTSI noted.
Capital expenditures for 2018 excluding capitalized borrowing costs and payment of concession rights in Lae and Motukea amounted to $261.3 million, some 69% of the $380 million capital expenditures budget for the full year 2018.
For 2019, the group’s capital expenditure is expected to be about $380 million again, to be utilized mainly for ongoing expansion projects in Manila, Mexico, and Iraq; equipment acquisitions and upgrades; and maintenance requirements.
“Our drive in maintaining positive volume growth organically and through M&A [merger and acquisition], our focus on cost and operating efficiency, and the constructive global trade dynamics outside of the U.S.-China ‘trade war’ combine to provide a case for cautious optimism in 2019,” ICTSI chairman Enrique Razon said.
ICTSI develops, manages, and operates container terminals in six continents around the world.
