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  • 2016 March 9 12:31

    ICTSI posts results for 2015

    International Container Terminal Services, Inc. (ICTSI) reported audited consolidated financial results for the year ended December 31, 2015 posting revenue from port operations of US$1.051 billion, one percent lower compared to US$1.061 billion the year earlier; Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$450.0 million, two percent higher than the US$443.0 million generated the previous year; and reported Net Income attributable to equity holders of US$58.5 million, down 68 percent compared to the US$182.0 million earned in 2014. Diluted earnings per share for the period declined 85 percent to US$0.011 from US$0.075 in 2014. Excluding the effect of one-time adjustments to carrying value of certain subsidiaries and non-recurring charges, recurring net income would have increased one percent to US$174.7 million from US$172.6 million in 2014.

    In 2015, ICTSI recognized non-recurring charges totaling US$116.2 million composed principally of impairment charges on the concession rights assets of Tecplata S.A. (TECPLATA), ICTSI´s terminal in Buenos Aires, Argentina, amounting to US$88.0 million due to lower projected cash flows on its updated business plan as a result of the prevailing and challenging economic conditions in Argentina and the goodwill of subsidiaries PT ICTSI Jasa Prima Tbk and PT OJA in Jakarta, Indonesia aggregating US$26.6 million as a result of lower projected cash flows on its updated business plan than originally expected. In addition, ICTSI recognized non-recurring gains and charges such as the US$0.3 million gain on the sale of the terminal in Naha, Japan, the recognition of US$1.3 million wealth tax charge on its equity in its project in Aguadulce, Colombia, and US$0.6 million super tax charge at the terminal in Karachi, Pakistan. In 2014, ICTSI also recognized gains on the sale of a non-operating subsidiary in Cebu, Philippines (US$13.2 million), the termination of management contract in Kattupalli, India (US$1.9 million), the net settlement of the insurance claims in Guayaquil, Ecuador and Gdynia, Poland (US$0.6 million), the gain on the sale of Yantai Rising Dragon International Container Terminal as part of the consolidation of the terminal operations at the Port of Yantai in Yantai, China (US$31.8 million), and the write-down of intangibles at TECPLATA (US$38.1 million). Excluding these non-recurring gains and charges, recurring net income in 2015 would have been one percent higher at US$174.7 million compared to the US$172.6 million earned the previous year.

    ICTSI handled consolidated volume of 7,775,993 twenty-foot equivalent units (TEUs) for the year ended December 31, 2015, five percent more than the 7,438,635 TEUs handled in 2014. The increase in volume was mainly due to the continuing volume ramp-up at Contecon Manzanillo S.A. (CMSA) in Manzanillo, Mexico and Operadora Portuaria Centroamericana, S.A. de C.V. (OPC) in Puerto Cortes, Honduras; new shipping line contracts and services at Pakistan International Container Terminal (PICT) in Karachi, Pakistan and at Contecon Guayaquil S.A. (CGSA) in Guayaquil, Ecuador; increased demand for services at Subic Bay International Terminal Corp. (SBITC) in Subic Bay, Philippines; favorable impact of consolidation at Yantai International Container Terminal (YICT) in Yantai China; and the contribution from ICTSI Iraq, the Company’s new terminal in Umm Qasr, Iraq which began commercial operation in November 2014. Excluding the volume from the new terminal in Iraq, organic volume increased three percent.

    Gross revenues from port operations was one percent lower in 2015 at US$1.051 billion compared to the reported US$1.061 billion in 2014. The slight decline in revenues was mainly due to unfavorable container volume mix, lower storage revenues and ancillary services, and the negative foreign exchange translation impact of the Brazilian Reais (BRL) at Tecon Suape S.A (TSSA) in Recife, Brazil, the Euro (EUR) at Madagascar International Container Terminal Services, Ltd. (MICTSL) in Toamasina, Madagascar, the Mexican peso (MXN) at CMSA in Manzanillo, Mexico and the Philippine peso (PHP) at various Philippine terminals. In addition, ICTSI’s revenues was adversely affected by the discontinued vessel calls by two major shipping lines as a result of continuing labor disruption at ICTSI Oregon, Inc. (IOI) in Portland, Oregon, USA and weaker short-sea trade and reduced vessel calls at Baltic Container Terminal (BCT) in Gdynia, Poland. The decrease was partially offset by tariff rate adjustments at certain terminals; new shipping line contracts and services; favorable impact of the consolidation of terminal operations in Yantai, China; continuing ramp-up at OPC in Puerto Cortes, Honduras and CMSA in Manzanillo, Mexico; and the revenue contribution of the Company’s new terminal in Umm Qasr, Iraq. Excluding the revenues from the new terminal in Iraq, organic revenues were three percent lower.

    Consolidated cash operating expenses decreased five percent in 2015 to US$432.3 million from US$454.5 million the year earlier. The decrease was mainly due to lower equipment and facilities-related expenses as the company benefited from lower global fuel prices and lower repairs and maintenance expenses; lower variable cost at ICTSI Oregon due to significant volume decline; and the depreciation of the local currency at the various ports of the Company as cash operating expenses of these terminals were translated to a lower US dollar equivalent upon consolidation. The reduction, however, was tapered by the contributions and start-up costs of the new terminal in Iraq and new projects in the Philippines, Mexico, Australia and Democratic Republic of Congo. Excluding the cost associated with the new terminal and projects, consolidated cash operating expenses would have decreased seven percent in 2015.

    Consolidated EBITDA increased two percent to US$450.0 million in 2015 from US$443.0 million the previous year mainly due to the continuing ramp-up and further improvement in operating efficiencies at the terminals in Honduras and Mexico; strong operating results in Asia; and the positive contribution from the new terminal in Iraq. Consolidated EBITDA margin improved to 43 percent in 2015 from 42 percent in 2014.

    Consolidated financing charges and other expenses surged 238% in 2015 to US$183.5 million from US$54.3 million in 2014. The increase was mainly due to the recognition of a US$1.3 million wealth tax on its equity in its project in Aguadulce, Colombia, US$0.6 million super tax recognized at the terminal in Karachi, Pakistan and impairment charges at its subsidiaries in Buenos Aires, Argentina and Jakarta, Indonesia of US$88.0 million and US$26.6 million, respectively.

    Capital expenditure mainly related to construction and procurement of equipment amounted to US$353.5 million for the full year 2015, approximately 67 percent of the original US$530 million capital expenditure budget. The capital expenditure was mainly for the completion of development at ICTSI’s new container terminals in Mexico, Honduras and Iraq; capacity expansion in its terminal operation in Manila; and to start the development of the new terminals in Democratic Republic of Congo and Australia. In addition, ICTSI invested US$95.1 million in the development of Sociedad Puerto Industrial Aguadulce S.A. (SPIA), its joint venture container terminal development project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia. ICTSI’s capital expenditure budget for 2016 is approximately US$420.0 million mainly allocated for the completion of the initial stage of ICTSI’s new container terminals in Democratic Republic of Congo and Iraq, and the continuing development of ICTSI’s project in Australia. With regard to ICTSI’s joint venture container terminal development project in Buenaventura, Colombia, ICTSI allocated approximately US$60.0 million for its share in 2016 to complete the initial phase of the project.

    ICTSI is widely acknowledged to be a leading global developer, manager and operator of container terminals in the 50,000 to 2.5 million TEU/year range. ICTSI has an experience record that spans six continents and continues to pursue container terminal opportunities around the world.

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