ICTSI 9M2023 Net Income Up 4% to USD484.54M; Quarterly EBITDA and Net Income at all-time highs

8 November 2023

Manila North Harbour Port (NorthPort) at the Port of Manila

Throughput grew 7 percent to 9.45 million TEUs; Organic volume increased 1 percent
Revenues increased 7 percent to USD1.76 billion; Organic revenue up 5 percent

Enrique K. Razon, ICTSI Chairman and President said: “I am pleased to announce sustained progress across the Group delivering growth in revenues of seven percent to USD1.76 billion and EBITDA of USD1.11 billion, seven percent higher than the previous year. These excellent results were delivered against some very strong prior year comparatives.”

“Looking ahead, whilst we continue to expect a challenging macro-economic and geo-political environment, we remain confident in the resilience of ICTSI’s diverse portfolio. Our strategy as an independent port operator supported by our cost and operational discipline means we are well-positioned for the rest of the year, as well as over the longer term."

International Container Terminal Services, Inc. (ICTSI) today reported unaudited consolidated financial results for the nine months of 2023 posting revenue from port operations of USD1.76 billion, an increase of seven percent from the USD1.64 billion reported for the same period in 2022; Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of USD1.11 billion, seven percent higher than the USD1.04 billion generated the same period last year; and net income attributable to equity holders of USD484.54 million, four percent more than the USD465.13 million earned in the first nine months of 2022 primarily due to higher operating income and interest income, and lower COVID-19-related expenses; partially tapered by nonrecurring impairment of goodwill attributed to Pakistan International Container Terminal (PICT) in the previous quarter and increases in depreciation and amortization, interest on loans, lease liabilities and concession rights payable. Excluding the impairment of goodwill attributed to PICT, net income attributable to equity holders would have grown six percent to USD495.15 million. Diluted earnings per share increased six percent to USD0.227 in 2023 from USD0.215 in 2022.

For the quarter ended September 30, 2023, revenue from port operations increased three percent from USD576.70 million to USD594.88 million; EBITDA was three percent higher at USD377.85 million from USD365.85 million; and net income attributable to equity holders marginally increased to USD170.74 million from USD170.66 million in the same period in 2022. Diluted earnings per share for the third quarter of 2022 and 2023 were flat at USD0.080.

ICTSI handled consolidated volume of 9,451,912 twenty-foot equivalent units (TEUs) in the first nine months of 2023, seven percent more compared to the 8,856,303 TEUs handled in the same period in 2022. The increase in consolidated volume was mainly due to the contribution of Manila North Harbour Port, Inc. (MNHPI) in Manila, Philippines that was consolidated starting September 2022, and new services at certain terminals; tapered mainly by the impact of the expiration of concession contract at PICT in Karachi, Pakistan; cessation of cargo handling operations at Makassar Terminal Services (MTS) in Makassar, Indonesia and Davao Integrated Port and Stevedoring Services Corporation (DIPSSCOR) in Davao, Philippines; and slowdown in trade activities at certain terminals. Excluding the contribution of MNHPI, PICT, MTS and DIPSSCOR, consolidated volume would have marginally increased by one percent. For the quarter ended September 30, 2023, total consolidated throughput was two percent higher at 3,176,076 TEUs compared to 3,103,721 TEUs in 2022.

Gross revenues from port operations for the first nine months of 2023 increased by seven percent to USD1.76 billion compared to the USD1.64 billion reported in the same period in 2022 mainly due to the contribution of MNHPI and new businesses at IRB Logistica in Brazil; tariff adjustments, volume growth and higher revenues from ancillary services and general cargo business at certain terminals; and favorable translation impact mainly of Mexican Peso (MXN)- and Iraqi Dinar (IQD)- based revenues at Contecon Manzanillo S.A. (CMSA) and ICTSI Iraq, respectively, and Brazilian Reais (BRL)- based revenues at Tecon Suape S.A. (TSSA) and ICTSI Rio in Brazil; partially tapered by slowdown in trade activities at Victoria International Container Terminal (VICT) in Melbourne, Australia, and the expiration of the concession contract at PICT; and unfavorable translation impact mainly of Philippine Peso (PHP)-, Australian Dollars (AUD)- and Nigerian Naira (NGN)- based revenues at Philippine terminals, VICT in Australia and International Container Terminal Services Nigeria Ltd. (ICTSI Nigeria) in Port of Onne, Nigeria, respectively. Excluding the contribution of MNHPI, and impact of new and discontinued businesses, consolidated gross revenues would have increased by five percent for the nine months ended September 30, 2023. For the third quarter of 2023, gross revenues increased three percent from USD576.70 million to USD594.88 million.

Consolidated cash operating expenses in the first nine months of 2023 was 12 percent higher at USD489.14 million compared to USD438.13 million in 2022. The increase in cash operating expenses was mainly due to the costs contribution of MNHPI and of new businesses at IRB Logistica; government-mandated and contracted salary rate adjustments; increase in repairs and maintenance; volume-driven increase in contracted services; increases in professional fees, transportation and travel expenses mainly related to business development activities; and unfavorable foreign exchange effect mainly of MXN-based expenses at CMSA. The increase was partially tapered by the expiration of the concession contract at PICT, and termination of cargo handling operations at DIPSSCOR and MTS; decrease in power costs; continuous cost optimization measures implemented; and favorable foreign exchange effect mainly of Philippine Peso (PHP)-, Pakistani Rupee (PKR)- and Nigerian Naira (NGN)- based expenses at Philippine terminals, PICT and ICTSI Nigeria, respectively. Excluding the contribution of MNHPI, and cost associated with new and discontinued businesses, consolidated cash operating expenses would have increased by 10 percent.

Consolidated EBITDA for the first nine months of 2023 increased seven percent to USD1.11 billion from USD1.04 billion in 2022. EBITDA margin, on the other hand, remained flat at 63 percent in the first nine months of 2023.

Consolidated financing charges and other expenses increased one percent to USD132.68 million for the first nine months ended September 30, 2023 from USD130.83 million in 2022 mainly due to higher interest and financing charges on short-term and long-term loan availments and a nonrecurring impairment of goodwill attributed to PICT. This was partially offset by lower Covid 19-related expenses.

Capital expenditures, excluding capitalized borrowing costs, amounted to USD233.58 million for the first nine months of 2023. These were mainly for ongoing expansions and acquisition of equipment at CMSA in Manzanillo, Mexico, Manila International Container Terminal (MICT) in the Philippines , VICT in Melbourne, Australia, and ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo. The Group’s estimated capital expenditure for 2023 is approximately USD400 million. The estimated capital expenditure will be utilized mainly for the ongoing expansion at the Company’s terminals in Mexico, Australia, 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 recently acquired terminal in East Java in Indonesia; equipment acquisitions and upgrades; and for capital maintenance requirements.

ICTSI is a leading global developer, manager and operator of container terminals in the 50 thousand to 3.5 million TEU/year range. ICTSI operates in six continents and continues to pursue container terminal opportunities around the world.