International Container Terminal Services, Inc. (ICTSI) has reported important increases in its financial results for the nine months of the year, with net income significantly increased by 68% year-on-year.
The global container port operator’s net income reached US$352.7 million, while during the first nine months of the year, the company’s revenue from port operations completed more than US$1.365 billion which corresponds to a year-on-year increase of 24%.
“This growth is attributable to many factors including the high volumes, favourable container mix, tariff adjustments at certain terminals, new contracts with shipping lines and services, new terminals, higher revenues from ancillary services, as well as a net favourable impact of foreign exchange at certain terminals,” explains ICTSI.
However, the increase was partially tapered by a decline in trade activities at certain terminals primarily due to the impact of the Covid-19 pandemic, according to a statement.
Additionally, earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled US$829.4 million, representing a growth of 29% over the last year’s first nine months period. According to ICTSI, this increase has arisen principally by higher revenues and was partially tapered by the increase in cash operating expenses. At the same time, EBITDA margin increased to 61% from 58% in the previous year.
Moreover, the world’s eighth busiest port operator reported an increase in consolidated cash operating expenses of 16% in the first nine months of 2021, reporting US$383.2 million.
The rise in cash operating expenses was mainly due to the increase in equipment and facilities-related expenses and contracted services resulting from higher volume, additional cost associated with the new terminals and unfavorable foreign exchange effect of Australian Dollar (AUD), Mexican Peso (MXN) and Chinese Renminbi (RMB)-based expenses at the company’s container terminal operations in Melbourne, Manzanillo and Yantai, respectively.
As for the Manila-based company’s operational results, ICTSI handled a consolidated volume of more than 8,266,600TEU in the first nine months of the year, representing a rise of 11% compared to the same period of 2020.
“The increase in volume was mainly driven by volume growth and improvement in trade activities as economies continue to recover from the impact of the Covid-19 pandemic and lockdown restrictions, and new shipping lines and services at certain terminals,” said the terminal operator in a statement.
Regarding the third quarter of 2021, ICTSI’s revenue from port operations increased by 27% year-on-year to US$482.4 million, EBITDA was 31% higher at US$296.9 million and net income reached US$132.2 million, reflecting a growth of 67% over Q3 of 2020.
In the meantime, the company’s total consolidated throughput was increased by 7% in comparison to last year’s third quarter, while ICTSI handled more than 2.8 million TEU globally.
Commenting on the company’s results, Enrique K. Razon, Jr., ICTSI Chairman and President, said, “We have seen a considerable improvement in trade activities and outperformance in Asia, the Americas and EMEA as economies continue to recover from the impact of the Covid-19 pandemic and lockdown restrictions ease.”
“The Company’s robust financial position provides a foundation to fund capital expenditures entirely through our strong cash flows and continue to grow ICTSI sustainably for the long term benefit of all our stakeholders,” he added.
Capital expenditures, excluding capitalised borrowing costs, for the nine months amounted to US$104 million. These were mainly for the ongoing expansion at Manila International Container Terminal (MICT) in the Philippines and ICTSI DR Congo (IDRC) in Democratic Republic of Congo; and acquisition of port facilities and equipment at International Container Terminal Services Nigeria Ltd. (ICTSNL) in the Port of Onne in Nigeria.
According to the Group, its capital expenditure budget for 2021 is approximately US$250 million. “The estimated capital expenditure budget will be utilised mainly for the completion of the expansion project at MICT, the ongoing yard expansion at IDRC, the new expansion project at Victoria International Container Terminal (VICT) in Melbourne, Australia, equipment acquisitions and upgrades, and for various maintenance requirements,” said ICTSI officials.
Regarding the future, ICTSI’s Chairman noted, “We remain mindful that the pandemic continues to create challenges throughout our industry. We have good momentum to deliver further disciplined growth and we look to the future with confidence.”
