ICTSI net income down 17%

The International Container Terminal Services Inc.’s (ICTSI) net income attributed to equity holders in 2023 was down 17 percent to $511.53 million from $618.46 million in 2022 mainly due to non-cash impairment charges.

In a disclosure to the Philippine Stock Exchange (PSE) on March 1, ICTSI attributed the non-recurring and non-cash impairment of goodwill to the acquisition of Pakistan International Container Terminal (PICT) in Karachi, Pakistan.

The firm also cited “increase in depreciation and amortization, interests on loans, lease liabilities and concession rights payable, and equity share in net loss of joint ventures” as contributors to the loss.

Diluted earnings per share decreased by 17 percent to $0.237 in 2023 from $0.287 in 2022.

Without the impairment, the recurring net income of the firm would have increased by seven percent to $676.83 million last year compared to 2022.

Despite this, the net income was tapered by higher operating income and interest earned from short-term investments and deposits, along with lower Covid-19-related costs.

Revenues from port operations in 2023 increased by six percent at $2.39 billion from $2.24 billion in 2022 due to the “contribution of the Manila North Harbour Port, Inc. (MNHPI), tariff adjustments, volume growth, and higher revenues from ancillary services and general cargo business at some terminals.”

The impact of the Mexican Peso (MXN)- and Iraqi Dinar (IQD)- based revenues at Contecon Manzanillo S.A. (CMSA) in Mexico and ICTSI Iraq, respectively, and Brazilian Reais (BRL)-based revenues at Tecon Suape S.A. (TSSA) and ICTSI Rio in Brazil also positively contributed to the revenue output.

The expiration of the ICTSI’s concession contract at PICT, slowdown of trade in Victoria International Container Terminal (VICT) in Melbourne, Australia; and unfavorable translation impact of Philippine Peso- and Australian Dollars-based revenues at Philippine terminals and VICT respectively hindered the revenues to rise further.

The 2023 EBITDA also rose by seven percent at $1.51 billion from $1.41 billion in 2022 due to higher revenues offset by more cash operating expenses.

“I am proud of the Group’s performance in 2023; the efforts of ICTSI’s colleagues around the world have resulted in revenues increasing by six percent to $2.39 billion and record EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $1.51 billion,” said ICTSI Chairman and President Enrique K. Razon.

Consolidated cash operating expenses in 2023 was eight percent higher at $662.70 million from $612.12 million in 2022, attributed to the “costs contribution of MNHPI and of new businesses at IRB Logistica in Brazil; salary rate adjustments, increases in professional fees, transportation and travel expenses; volume-driven increase in contracted services and repairs and maintenance; and unfavorable foreign exchange effect mainly of MXN-based expenses at CMSA.”

ICTSI also saw marginal growth of four percent to 12.75 million twenty-foot equivalent units (TEUs) in the consolidated volume of cargo handled in its ports due to the additional operations of the MNHPI which began in September 2022.

From 12.22 million TEUs in 2022, the cargo volume also rose because of improved trade activities and new terminal services.

The firm noted that the consolidated volume was tapered by the impact of the expired concession contract at PICT, half in cargo handling operations at Makassar Terminal Services (MTS) in Makassar, Indonesia and Davao Integrated Port and Stevedoring Services Corporation (DIPSSCOR) in Davao, Philippines; and slowdown in trade activities at some terminals.

Capital expenditures (Capex) excluding borrowing costs was logged at $336.32 million in 2023 due to expansionary projects at CMSA in Manzanillo, Mexico, Manila International Container Terminal (MICT) in the Philippines, VICT in Melbourne, Australia, ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo, ICTSI Rio in Brazil, and ICTSI Nigeriain Onne, Nigeria; and the initial development in East Java Multipurpose Terminal (EJMT) in Indonesia.

Capex for 2024 is around $450 million, including the $60 million of Capex carried over from 2023, which will be used to expand the Brazil, Mexico, Philippines, and DRC terminals, develop the EMJT in Indonesia, pay the last tranche of concession extension related expenditures in Madagascar; and develop the newly acquired terminal in Iloilo.

“While the geopolitical backdrop remains complex, 2024 is set to be ripe with opportunities as we continue to invest in new and existing terminals. We have a stronger platform than ever to grow, to drive market share and continue our successful track record as a responsible business that creates long term sustainable value for all its stakeholders,” said Razon. — Khrischielle Yalao