ICTSI suffers 29% income drop in 9 months

MANILA, Philippines - Port operator International Container Terminal Services Inc. (ICTSI) suffered a 29 percent drop in its net income for the first nine months of 2009 to $37.2 million, from $52.4 million in the same period last year.

Excluding the effects of foreign exchange transactions, its net income attributable to equity holders declined 21 percent to $41.2 million, company officials said.

For the January to September period, revenue from port operations decreased 15 percent from $352.3 million to $299.3 million. Earnings before interests, taxes, depreciation and amortization (EBITDA) also declined 17 percent from $154.9 million to $129.1 million.

Meanwhile, third quarter 2009 revenues from port operations dropped 12 percent to $110.5 million from $125.1 million in the same period last year.

ICTSI officials explained that the lower net income attributable to equity holders was mainly due to lower volume brought about by the decline in global trade, higher interest expense due to higher debt level, and the depreciation of currencies in the countries where ICTSI’s ports are located (Philippine peso, Brazilian reais, Malagasy ariary, euro) relative to the US dollar. 

ICTSI chairman and president Enrique Razon Jr. noted that the global economic conditions continue to be more challenging than in recent years. “Third quarter throughput volumes were stronger than the first two quarters, and the benefits of our cost containment efforts also contributed to ICTSI’s improving financial results,” he said.

ICTSI’s throughput in the third quarter was eight percent lower at 943,805 twenty foot equivalent units (TEUs) compared to the 1.02 million TEUs in the same period in 2008. For the first nine months, total TEUs handled stood at 2.53 million compared to 2.77 million TEUs in 2008,a decline of nine percent.

ICTSI’s container terminal operations in Asia, comprised of the terminals in the Philippines, Indonesia, Japan and China, accounted for 63 percent of consolidated volumes in the third quarter.

Revenue contribution from container terminal operations in Asia decreased four percent in the third quarter from $58.7 million in 2008 to $56.3 million in 2009.

The third quarter’s single digit rate of decline compared to the 13 percent drop in the first quarter and 10 percent decline in the second quarter was principally due to the lower rate of revenue decline in the company’s Manila container terminal operations, significant revenue growth in container terminal operations in China and Davao in southern Philippines, and new revenue contribution from Brunei container terminal operations.

This operating segment accounted for 51 percent of the group’s revenues in the third quarter of the current year.

For the first nine months of the year, revenue contribution from the company’s container terminal operations in Asia contracted nine percent to $151.6 million compared to $166.6 million in the same period in 2008.

In the first nine months of 2009, ICTSI invested $77 million principally to improve operating efficiency and acquire container handling equipment at its port operations in Ecuador (CGSA) as well as fund the construction of the sixth berth in Manila (MICT).

For full year 2009, the total estimated consolidated capital expenditures is $146.9 million (P7.2 billion), mainly for civil works, systems improvement, and purchase of major cargo handling equipment at its port operations in Manila, Brazil and Ecuador.

The company said they expect to meet funding requirements for these expenditures from existing cash balance and internally generated funds.