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ICTSI posts $182-million profit in 2017

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EARNINGS of International Container Terminal Services, Inc. (ICTSI) were flat in 2017, as higher interest and financing charges alongside losses from operations in Colombia tempered the rise in revenues.

In a statement, the Razon-led company said net income attributable to equity holders stood at $182.14 million last year, 1% higher than the $180 million it booked in 2016. This comes amid an 10% increase in revenues to $1.24 billion for the period.

“The increase in net income was mainly due to the continuing ramp-up at the company’s new terminal in Matadi, Democratic Republic of the Congo; strong operating results from the terminals in Iraq, Mexico, Honduras, Madagascar, China, Poland and Brazil; and the gain related to the termination of the sub-concession agreement in Lagos, Nigeria,” ICTSI said in a statement.

However, the growth was “tapered by higher interest and financing charges, higher depreciation and amortization expenses, start-up costs at the company’s terminal in Melbourne, Australia, and increase in the company’s share in the net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA), its joint venture container terminal project with PSA International Pte Ltd. in Buenaventura, Colombia.”

The company noted that its share in losses in SPIA ballooned to $36.7 million since it started operations in the beginning of 2017, from just $5.6 million in 2016.

Excluding a $7.5-million gain from the termination of its subconcession agreement in Nigeria and a $23.4-million charge on the pre-termination of the lease agreement at the company’s terminal in Oregon in the United States, ICTSI said consolidated attributable profit would have further declined by 14% in 2017.

The company’s consolidated earnings before interest, tax, depreciation, and amortization (EBITDA), meanwhile, increased 10% to $578 million, following stronger results of terminal operations in Iraq, Mexico, Honduras, Madagascar, China, Poland, and Brazil. EBITDA margin stood at 46.4%.

In terms of volume, the company handled 9.15 million twenty-foot equivalent units in 2017, 5% higher year on year. ICTSI attributed the increase to improving global trade activities in emerging markets. The company has also been ramping up operations in Basra, Iraq and Manzanillo, Mexico, prompting the increase in volume.

Without the new terminals, consolidated volume would have picked up 4%.

This year, ICTSI has committed to spend $380 million for capital expenditures. The allocation will be used for capacity expansion in terminal operations in Manila, Mexico, and Iraq, as well as for the completion of a new barge terminal project in Cavite.

Overseas, ICTSI is also in the process of rehabilitation and developing a container terminal in Honduras. Portions of the 2018 capex will further be used to procure additional equipment and minor infrastructure works in its newly acquired terminal operations in Papua New Guinea.

The 2018 capex is 117% higher than the company’s actual spending of $174.8 million in 2017, which is around 73% of its allocated $240-million capex last year.

Shares in ICTSI lost 60 centavos or 0.55% to P109.40 each at the Philippine Stock Exchange on Wednesday. — Arra B. Francia