ICTSI unit okays $5.9-million capex

MANILA, Philippines - The board of directors of International Container Terminal Services Inc. (ICTSI) subsidiary IW Cargo Handlers has approved the appropriation of $5.88 million from the total retained earnings of $5.89 million for 2009 for working capital expenditures.

In particular, the amount will be used for domestic expansion projects as well as investment in foreign ports for 2010.

Meanwhile, the ICTSI board gave the go-signal to the conversion of ICTSI’s advances to its subsidiaries, namely International Container Terminal Holdings (ICTHI), IW Cargo, and ICTSI Warehousing amounting to P124.95 million, P4 million, and P68.97 million into deposit for future stock subscriptions in the three subsidiaries.

ICTSI earlier reported 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 translation, net income attributable to equity holders should have declined by 21 percent to $41.2 million, company officials said.

For the January to September 2009 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 dropped 12 percent to $110.5 million from $125.1 million in the same period last year.

EBITDA was also down 12 percent to $49.2 million, from the $55.8 million generated in the third quarter of 2008. Net income was at $14 million, a five percent decrease from the $14.7 million earned 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 reals, Malagasy ariary, euro) relative to the US dollar in the third quarter of the previous year.

Excluding the effects of foreign exchange translation, third quarter net income attributable to equity holders would have remained flat at $14.6 million.