Enrique K. Razon Jr., ICTSI chairman and president, said: “ICTSI has delivered strong operating performance in the first quarter of 2021, with volume, revenue and earnings rising across our three regions: Asia, the Americas, and Europe, Middle East, and Africa (EMEA). We have seen improvements in most of our terminals as economies continue to recover from the pandemic as well as significant contributions from new shipping lines and services.
The pandemic remains extremely challenging for so many people around the globe. At ICTSI, we are proud of our role in working with the government and the private sector in driving the vaccination procurement program in the Philippines. Not only will this combined effort save lives, it will also contribute to the full opening of the Philippine economy and support significant recovery across all business sectors.”
International Container Terminal Services, Inc. (ICTSI) today reported unaudited consolidated financial results for the quarter ended March 31, 2021, posting revenue from port operations of US$435.6 million, an increase of 16 percent over the US$375.8 million reported for the same period last year; Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$264.8 million, 25 percent higher than the US$212.2 million generated in the first quarter of 2020; and net income attributable to equity holders of US$90.1 million, 51 percent more than the US$59.6 million earned in the same period last year primarily due to higher operating income; and significant reduction in equity in net loss of joint ventures; partially tapered by an increase in interest expense on loans, and higher interest on concession rights payable and lease liability from the new terminals.
ICTSI registered an equity in net gain of joint ventures of US$42 thousand in the first quarter of 2021 in contrast to the US$5.5 million equity in net loss for the same period in 2020 due to the company’s higher share in net earnings with respect to Manila North Harbour Port, Inc. (MNHPI) as a result mainly of the impact of Corporate Recovery and Tax Incentives for Enterprises (CREATE) on the deferred tax liabilities associated to the acquisition of MNHPI; and the company’s lower 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.
ICTSI handled consolidated volume of 2,707,791 twenty-foot equivalent units (TEUs) for the quarter ended March 31, 2021, eight percent more than the 2,508,986 TEUs handled in the same period in 2020 primarily due to improvement in trade activities as economies recover from the impact of the pandemic; and new shipping lines and services at the Company’s operations overseas.
Gross revenues from port operations for the quarter-ended March 31, 2021 increased by 16 percent to US$435.6 million from the US$375.8 million reported in the same period in 2020 mainly due to volume growth, favorable container mix, tariff adjustments at certain terminals, new contracts with shipping lines and services, and increased storage and ancillary services particularly in the Americas segment. The increase was partially tapered by decline in trade activities at certain terminals primarily due to the impact of COVID-19 pandemic.
Consolidated cash operating expenses in the first quarter of 2021 was three percent higher at US$122.4 million compared to US$119.0 million in the same period in 2020. The increase in cash operating expenses was mainly due to the cost contribution from the new projects; increase in contracted services in relation to volume; and unfavorable foreign exchange effect of Australian Dollar (AUD) based expenses in Melbourne, Australia and Philippine Peso (PHP) based expenses in the ports in the Philippines; partially tapered by continuous cost optimization measures; and favorable foreign exchange effect of Iraqi Dinar (IQD) based expenses in Umm Qasr, Iraq and Brazilian Reais (BRL) based expenses in Suape and Rio de Janeiro, Brazil. Excluding contribution of new projects, consolidated cash operating expenses would have increased by 1 percent.
Consolidated EBITDA for the first quarter of 2021 increased 25 percent to US$264.8 million from US$212.2 million in 2020 mainly due to higher revenues, partially tapered by the increase in cash operating expenses. Consequently, EBITDA margin increased to 61 percent in the first quarter of 2021 from 57 percent in 2020.
Consolidated financing charges and other expenses for the quarter increased three percent from US$33.2 million in 2020 to US$34.0 million in 2021 due to the issuance of 10-year US$400M senior notes in June 2020.
Capital expenditures, excluding capitalized borrowing costs, amounted to US$36.3 million for the first quarter of 2021. These were mainly for the ongoing expansion at Manila International Container Terminal (MICT) in Manila, Philippines and ICTSI DR Congo (IDRC) in Matadi, Democratic Republic of Congo and acquisition of port facilities and equipment at ICTSNL in Port of Onne, Rivers State, Nigeria. The Group’s capital expenditure budget for 2021 is approximately US$250.0 million. The estimated capital expenditure budget will be utilized mainly for the completion of the expansion project at MICT in Manila, Philippines; the ongoing yard expansion at IDRC in Matadi, Democratic Republic of Congo; the new expansion project at VICT in Melbourne, Australia; equipment acquisitions and upgrades; and for various maintenance requirements.