International Container Terminal Services, Inc. (ICTSI) reported audited consolidated financial results for the year ended December 31, 2013 posting revenue from port operations of US$852.4 million, an increase of 17 percent over the US$729.3 million reported for the same period the previous year, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$377.3 million, 23 percent higher than the US$307.6 million generated last year, and net income attributable to equity holders of the parent of US$172.4 million, up 20 percent compared to the US$143.2 million earned in 2012. The higher net income attributable to equity holders of the parent in 2013 was mainly due to strong revenue growth and margin improvement in certain key terminals and the contribution from the new terminal in Karachi, Pakistan. Diluted earnings per share for the period was likewise higher by 22 percent at US$0.071 from US$0.058 in 2012.
ICTSI handled consolidated volume of 6,309,840 twenty-foot equivalent units (TEUs) for the year ended December 31, 2013, 12 percent more than the 5,628,021 TEUs handled in 2012. The increase in volume was mainly due to the continuous growth in international and domestic trade in most of the Company’s terminals; new shipping lines and routes; full year contribution of new terminals, PT Olah Jasa Andal (PT OJA) and Pakistan International Container Terminal (PICT), which were consolidated in August 2012 and October 2012, respectively; and the start of commercial operations of new terminals, Contecon Manzanillo S.A. de C.V. (CMSA) and Operadora de Puerto Cortés, S.A. de C.V. (OPC), beginning November 2013 and December 2013, respectively. Excluding the volume contribution from the four new terminals and the effect of the cessation of the operations in Syria effective January 2013, organic volume growth increased by two percent. The Company’s seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan accounted for 78 percent of the Group’s consolidated volume in the 2013.
Gross revenues from port operations in 2013 surged 17 percent to US$852.4 million from the US$729.3 million reported in 2012. The increase in revenues was mainly due to volume growth, higher storage revenues and ancillary services, tariff rate increases in certain key terminals, full year contribution of the terminal operations in Karachi, Pakistan and Jakarta, Indonesia, and inclusion of the new terminals in Manzanillo, Mexico and Puerto Cortes, Honduras. Excluding the revenues from the newly acquired terminals and the effect of the cessation of the operations in Tartous, Syria, organic revenue growth was at seven percent. The Group’s seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan accounted for 84 percent of the Group’s consolidated revenues in 2013.
Consolidated cash operating expenses in 2013 grew 13 percent to US$359.5 million from US$318.9 million in 2012. The increase was driven by higher volume-related expenses (i.e., on-call labor, fuel, power and repairs and maintenance), government-mandated and contracted salary rate increases in certain terminals, higher business development expenses as the Company pursued a number of opportunities within the year, full-year impact of the expenses of PICT and PT OJA, and the inclusion of the expenses of new terminals, CMSA and OPC. Excluding the cash operating expenses of the new terminals as well as the expenses incurred in the Company’s operation in Syria in the same period in 2012, total cash operating expenses would have increased by only three percent.
Consolidated EBITDA for 2013 increased 23 percent to US$377.3 million from US$307.6 million in 2012 mainly due to volume growth and stronger revenues arising from favorable volume mix, higher revenues from storage and ancillary services, tariff increases in certain key terminals, and full year contribution from the Company’s terminal operation in Karachi, Pakistan. Excluding the impact of four new terminals in Pakistan, Indonesia, Mexico and Honduras, as well as the effect of the cessation of the terminal operations in Tartous, Syria in 2012, organic EBITDA growth is at 12 percent. Meanwhile, consolidated EBITDA margin increased to 44 percent in 2013 compared to 42 percent in 2012.
Consolidated financing charges and other expenses for 2013 increased 38 percent to US$48.2 million from US$35.0 million in 2012 due mainly to higher outstanding interest-bearing debt. ICTSI issued US$400 million of 10-year bonds in January 2013 mainly to fund its capital expenditure program for 2013 and refinance medium-term loans, and its subsidiaries in Ecuador, Poland and Croatia availed of term loans locally.
ICTSI’s capital expenditure in 2013 amounted to US$477.6 million against a full year capital expenditure budget of US$550.0 million. Last year’s capital expenditure was mainly attributed to the development of new container terminals in Mexico, Argentina and Colombia; capacity expansion in its terminal operation in Croatia; and the Company’s newly acquired terminal in Honduras. The Group’s capital expenditure budget for 2014 is approximately US$310.0 million mainly allocated for the completion of phase one development in the Company’s new container terminals in Mexico and Argentina, and to start the development of the terminals in Honduras and Democratic Republic of Congo. This does not include the Company’s share in the joint venture project with PSA International Pte Ltd. (PSA) for the development of the container terminal in Buenaventura, Colombia which for 2014 is approximately US$120.0 million.
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