International Container Terminal Services Inc. (ICTSI) reported on Thursday a net income of $135.7 million for the first nine months, 5 percent higher than $128.8 million a year earlier.
Revenue from port operations from January to September reached $779.2 million, up 25 percent from $624.7 million, the company said.
ICTSI’s earnings before interest, taxes, depreciation and amortization (EBITDA) of $326.1 million for the nine-month period was 14 percent higher than the year-ago’s $285.5 million.
The company said the increase in net income for the first nine months reflects the impact of higher container volume throughput levels due to the commencement of commercial operations at new terminals in Manzanillo, Mexico (CMSA) and Puerto Cortes, Honduras (OPC), as well as more favorable volume mix and increased revenues from ancillary services at existing terminals.
These positive factors were partially offset by increased depreciation charges and higher levels of interest expense driven by the commencement of commercial operations at CMSA and OPC, the company said.
The sale of a non-operating subsidiary in Cebu for $13.2 million; the termination of the management contract in Kattupalli, India, $1.9 million; and the restructuring of the company’s operations in Yantai, China, $31.8 million contributed to the growth in net income for the nine-month period, it added.
However, these gains were affected by a one-time non-cash charge of $38.1 million arising from the write-down of intangible assets at the company’s terminal in Buenos Aires, Argentina. Excluding these non-recurring items, net income for the first nine months would have been $126.3 million, or 2 percent lower than the $128.8 million reported last year.
For the third quarter alone, revenue from port operations increased 27 percent to $268.9 million from $211 million a year ago. Net income decreased 26 percent to $34.1 million from last year’s $45.9 million on start up costs and consolidation of the operating expenses of the new terminals, lower capitalized borrowing cost at CMSA, and the recognition of $38.1 million impairment charge on intangible assets in one of its ports.
ICTSI handled consolidated volume of 5,410,224 twenty-foot equivalent units (TEU) for the first nine months of 2014, 17 percent more than the 4,628,117 TEUs handled in 2013.
The increase was mainly due to the volume generated by Contecon Manzanillo S.A. (CMSA) and Operadora Portuaria Centroamericana, S.A. de C.V (OPC), the company’s new container terminals in Manzanillo, Mexico and Puerto Cortes, Honduras, respectively, the impact of the consolidation of terminal operations at the Port of Yantai in Yantai, China, and the 23 percent volume growth in Baltic Container Terminal in Gdynia, Poland.
Rosalie C. Periabras