- Throughput decreased 2 percent to 7.4 million TEUs
- Revenues dropped 0.3 percent to US$1.1 billion
- EBITDA increased 3 percent to US$643.2 million
Enrique K. Razon, Jr., ICTSI Chairman and President, said: “I am pleased to report that our performance for the third quarter benefited from the cost preservation measures we took to mitigate the adverse effects of the pandemic. Our actions, together with improvements in global trade, a diversified portfolio, and high levels of customer service have helped to deliver an improved performance compared to the same period in the previous year.
“The pandemic continues to present uncertainties and we are very mindful of how unpredictable the environment is, as certain parts of the world move to a secondary lockdown, and we remain cautious. However, ICTSI is well positioned to benefit further should global trade continue to show signs of recovery, underpinned by our stringent cost management, ability to swiftly respond to changing situations and our diverse geographical presence.”
International Container Terminal Services, Inc. (ICTSI) reported unaudited consolidated financial results for the first nine months of 2020 posting revenue from port operations of US$1.104 billion, lower by 0.3 percent compared to the US$1.107 billion reported for the same period last year. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$643.2 million, grew three percent more than the US$624.3 million generated in the first three quarters of 2019. Net income attributable to equity holders of US$182.6 million was one percent lower than the US$184.9 million earned in the same period last year due mainly to higher interest on concession rights payable and COVID-19 related expenses. This was partially tapered by higher operating income, improvement in net operating results in Melbourne, Australia and lower equity in net loss of joint ventures. Equity in net loss of joint ventures decreased by 28 percent to US$12.7 million in the first nine months of 2020 from US$17.6 million for the same period in 2019 mainly due to the decrease in the Company’s share in net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA), its joint venture container terminal project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia. Diluted earnings per share was unchanged at US$0.069 compared to the same period in 2019.
For the quarter ended September 30, 2020, revenue from port operations increased seven percent from US$355.6 million to US$379.3 million. EBITDA was 13 percent higher at US$226.8 million from US$199.9 million. Net income attributable to equity holders was at US$69.2 million, 23 percent more than the US$56.4 million in the same period in 2019. Diluted earnings per share for the third quarter of 2020 was 23 percent higher at US$0.027 compared to US$0.022 the same period in 2019.
ICTSI handled consolidated volume of 7,426,307 twenty-foot equivalent units (TEUs) in the first nine months of 2020, two percent less than the 7,590,090 TEUs handled in the same period in 2019. The decrease in volume was primarily due to the decline in trade activities as a result of the impact of the COVID-19 pandemic on global trade and lockdown restrictions. Excluding the contribution of ICTSI Rio, the Company’s new terminal in Rio de Janeiro, Brazil, consolidated organic volume would have decreased four percent in the first nine months of 2020. For the quarter ended September 30, 2020, total consolidated throughput was three percent higher at 2,626,542 TEUs compared to 2,548,175 TEUs in 2019.
Gross revenues from port operations for the first nine months of 2020 was marginally lower by 0.3 percent at US$1.104 billion compared to the US$1.107 billion reported in the same period in 2019 due to the generally lower trade activities globally mainly as a result of the lockdown restrictions imposed by most governments to try to address the rising infection rate of the COVID-19 virus. The decline was partially tapered by the contribution of ICTSI Rio, tariff adjustments and new services at certain terminals. Excluding the contribution of ICTSI Rio, consolidated organic gross revenues would have decreased by three percent in the first nine months of 2020. For the third quarter of 2020, gross revenues increased seven percent from US$355.6 million to US$379.3 million.
Consolidated cash operating expenses in the first nine months of 2020 was three percent lower at US$331.6 million compared to US$341.6 million in the same period in 2019. The decrease in cash operating expenses was mainly due to the continuous group-wide cost reduction and optimization measures; and favorable translation impact of Brazilian Reais (BRL)-based expenses in Suape, Brazil, Mexican Peso (MXN)-based expenses in Manzanillo, Mexico, and Pakistan Rupee (PKR)-based expenses in Karachi, Pakistan. The decrease was tapered by the cost contribution of ICTSI Rio. Excluding the cost contribution of ICTSI Rio, consolidated cash operating expenses would have decreased by eight percent in 2020.
Consolidated EBITDA increased three percent to US$643.2 million for the first three quarters of 2020 from US$624.3 million in 2019 primarily due to lower cash operating expenses resulting from continuous group-wide cost reduction and optimization measures and positive contribution of ICTSI although this was tapered by the slight decrease in revenues. Excluding the contribution of ICTSI Rio, consolidated EBITDA would have increased by one percent in 2020. EBITDA margin, on the other hand, increased to 58 percent in the first nine months of 2020 from 56 percent the previous year.
Consolidated financing charges and other expenses for the first nine months of 2020 increased 11 percent from US$95.2 million in 2019 to US$105.5 million in 2020 primarily due to COVID-19-related expenses and the absence of capitalized borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019.
Capital expenditure, excluding capitalized borrowing costs, for the nine months ended September 30, 2020 amounted to US$128.6 million. The capital expenditure for the first nine months of 2020 were mainly for the ongoing expansion at Manila International Container Terminal (MICT) in Manila, Philippines, Contecon Manzanillo S.A. (CMSA) in Manzanillo, Mexico, Contecon Guayaquil S.A. (CGSA) in Guayaquil, Ecuador, Basra Gateway Terminal (ICTSI Iraq) in Umm Qsar, Iraq and ICTSI DR Congo (IDRC) in Matadi, Democratic Republic of Congo. Amid the ongoing impact of the COVID-19 pandemic on global trade, the Group has reduced its capital expenditure plan for the year to approximately US$160 million, which will be utilized mainly to complete the ongoing expansion projects.