International Container Terminal Services, Inc. (ICTSI) reported unaudited consolidated financial results for the quarter ended March 31, 2023 posting revenue from port operations of US$572.25 million, an increase of eight percent from the US$528.27 million reported last year; Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$354.20 million, five percent higher than the US$337.85 million generated in the first quarter of 2022; and net income attributable to equity holders of US$154.61 million, nine percent more than the US$142.28 million earned in the same period last year primarily due to higher operating income; lower COVID-19 related expenses; partially tapered by increase in depreciation and amortization expenses, higher interest and financing charges on loans, lease liabilities and concession rights payable, and equity share in net loss of joint ventures. Diluted earnings per share increased 12 percent to US$0.072 from US$0.065 in the first quarter of 2022.
ICTSI handled consolidated volume of 3,102,105 twenty-foot equivalent units (TEUs) in the first quarter of 2023, nine percent more than the 2,833,001 TEUs handled in the same period in 2022. The increase in volume was primarily due to the contribution of Manila North Harbour Port, Inc. (MNHPI) in Manila, Philippines that was consolidated starting September 2022; volume growth and new shipping lines and services at certain terminals; tapered by the cessation of cargo handling operations at PT Makassar Terminal Services (PT MTS) in Makassar, Indonesia and Davao Integrated Port and Stevedoring Services Corporation (DIPSSCOR) in Davao, Philippines; and decline in trade activities at certain terminals, particularly at Pakistan International Container Terminal (PICT) in Karachi, Pakistan as the country succumbs to a severe economic crisis and at Victoria International Container Terminal (VICT) in Melbourne, Australia where container trade volume in the Port of Melbourne contracted in the first quarter of 2023 due to weakening domestic demand amid rising inflation. Excluding MNHPI, DIPSSCOR which ceased operations on June 30, 2022, and PT MTS which ceased operations on January 31, 2023, consolidated volume would have decreased by one percent in 2023.
Gross revenues from port operations for the quarter ended March 31, 2023 was eight percent higher at US$572.25 million compared to the US$528.27 million reported in the same period in 2022 mainly due to tariff adjustments, volume growth and higher revenues from ancillary services at certain terminals; contribution of MNHPI; and favorable translation impact mainly from the appreciation of Mexican Peso (MXN)-based revenues at Contecon Manzanillo S.A. (CMSA) in Manzanillo, Mexico. This was partially tapered by lower revenues from ancillary services at CMSA and decline in trade activities at VICT and PICT. In addition, the Company also experienced an unfavorable translation impact of the depreciation of Philippine Peso (PHP)-, Australian Dollars (AUD)- and Pakistani Rupee (PKR)- based revenues at the terminals in the Philippines, Australia and Pakistan, respectively. Excluding MNHPI, the new terminal and businesses, and the discontinued operations at DIPSSCOR, Hijo International Port Services (HIPS) and PT MTS, consolidated gross revenues would have increased by four percent in 2023.
Consolidated cash operating expenses for the quarter ended March 31, 2023 was 19 percent higher at US$163.14 million compared to US$137.11 million for the same period in 2022. The increase in cash operating expenses was driven by increase in equipment and facilities-related expenses, mainly fuel and repairs; government-mandated and contracted salary rate adjustments; costs contribution of MNHPI and of new businesses at IRB Logistica; other revenue generating activities; and unfavorable foreign exchange effect of Mexican Peso (MXN)-based expenses at CMSA. This was partially tapered by continuous cost optimization measures implemented; favorable foreign exchange effect mainly of Pakistani Rupee (PKR)- and Philippine Peso (PHP)- based expenses at the terminals in Pakistan, and the Philippines, respectively; and the termination of cargo handling operations at PT MTS and DIPSSCOR. Excluding the cost contribution of MNHPI, and new and discontinued terminals, consolidated cash operating expenses would have increased by 14 percent.
Consolidated EBITDA increased five percent to US$354.20 million for the quarter ended March 31, 2023 from US$337.85 million for the same period in 2022 mainly due to higher revenues. EBITDA margin, on the other hand, decreased to 62 percent in the first quarter of 2023 from 64 percent in the same period in 2022 as inflationary cost pressures and increased business development activities raised cash operating expenses.
Consolidated financing charges and other expenses for the first quarter of 2023 decreased by six percent to US$40.78 million from US$43.50 million in 2022 mainly due to lower Covid 19-related expenses partially tapered by higher interest and financing charges on short-term loan availments in the second and third quarters of 2022 and in the first quarter of 2023.
Capital expenditures, excluding capitalized borrowing costs, amounted to US$87.69 million for the first quarter of 2023. These were mainly for ongoing expansions and acquisition of equipment at CMSA in Manzanillo, Mexico, VICT in Melbourne, Australia, Manila International Container Terminal (MICT) in the Philippines and ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo. The Group’s estimated capital expenditure for 2023 is approximately US$400 million. The estimated capital expenditure will be utilized mainly for the ongoing expansion at the Company’s terminals in Australia, Mexico, Philippines and Democratic Republic of Congo; second tranche of concession extension related expenditures in Madagascar; yard expansion at ICTSNL in Nigeria; quay expansion at ICTSI Rio in Brazil; development of a newly acquired terminal in East Java in Indonesia; equipment acquisitions and upgrades; and for maintenance requirements.
ICTSI is a global developer, manager and operator of origin and destination (O&D) ports with a long-term commitment to the markets it serves. ICTSI operates 33 terminals in 20 countries across six continents.