ICTSI 9M2021 net income up 73 percent to USD316.4 million; Volume, revenues, EBITDA across all three regions outperform

•    Throughput grew 11% to 8.3 million TEUs 
•    Revenues increased 24% to USD1.4 billion 
•    EBITDA 29% higher to USD829.4 million

International Container Terminal Services, Inc. (ICTSI) reported unaudited consolidated financial results for the nine months of 2021, with revenue from port operations of USD1.365 billion, an increase of 24 percent from the USD1.104 billion reported for the nine months of 2020.  Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of USD829.4 million was 29 percent higher than the USD643.2 million generated the same period last year.  Net income attributable to equity holders of USD316.4 million was 73 percent more than the USD182.6 million earned in the nine months of 2020 primarily due to higher operating income and lower equity in net loss of joint ventures.  The increase was partially tapered by the rise in interest expense on loans, concession rights payable, and lease liability; and higher depreciation and amortization expenses associated with the new terminals. Diluted earnings per share for the nine months of 2021 was 91 percent higher at USD0.132 compared to USD0.069 in the same period in 2020.

Enrique K. Razon Jr., ICTSI chair and president, said:  “We have seen a considerable improvement in trade activities and outperformance in Asia, the Americas and EMEA as economies continue to recover from the impact of the COVID-19 pandemic and lockdown restrictions ease.  This has led to strong performance this quarter for ICTSI.  Net income has grown 73 percent, driven by growth in revenue and increased volume from port operations across all three regions. Revenue, volumes and EBITDA are up 24 percent, 11 percent, and 29 percent, respectively.  This is extremely encouraging, and the Company’s robust financial position provides a foundation to fund capital expenditures entirely through our strong cash flows and we continue to grow ICTSI sustainably for the long-term benefit of all our stakeholders.” 

“We remain mindful that the pandemic continues to create challenges throughout our industry.  We have good momentum to deliver further disciplined growth, and we look to the future with confidence,” he added.

For the quarter ended 30 September 2021, revenue from port operations increased 27 percent from USD379.3 million to USD482.4 million.  EBITDA was 31 percent higher at USD296.9 million from USD226.8 million.  Net income attributable to equity holders was at USD119.7 million, 73 percent more than the USD69.2 million in the same period in 2020.  Diluted earnings per share for the third quarter of 2021 was 95 percent higher at USD0.052 compared to USD0.027 the same period in 2020.

ICTSI handled consolidated volume of 8,266,621 twenty-foot equivalent units (TEUs) in the first nine months of 2021, 11 percent more than the 7,426,307 TEUs handled in the same period in 2020. The increase in volume was primarily due to volume growth and improvement in trade activities as economies continue to recover from the impact of the COVID-19 pandemic and lockdown restrictions, and new shipping lines and services at certain terminals. For the quarter ended September 30, 2021, total consolidated throughput was seven percent higher at 2,807,098 TEUs compared to 2,626,542 TEUs in 2020.

Gross revenues from port operations for the first nine months of 2021 was 24 percent higher at USD1.365 billion compared to the USD1.104 billion reported in the same period in 2020 mainly due to higher volume, favorable container mix, tariff adjustments at certain terminals, new contracts with shipping lines and services, higher revenues from ancillary services, contribution of new terminals, and net favorable impact of foreign exchange at certain terminals. The increase was partially tapered by a decline in trade activities at certain terminals primarily due to the impact of COVID-19 pandemic. Excluding the contribution of new terminals, consolidated gross revenues would have increased by 21 percent in the first nine months of 2020.  For the third quarter of 2021, gross revenues increased 27 percent from USD379.3 million to USD482.4 million.

Consolidated cash operating expenses in the first nine months of 2021 was 16 percent higher at USD383.2 million compared to USD331.6 million in the same period in 2020. The increase in cash operating expenses was mainly due to the increase in equipment and facilities-related expenses and contracted services resulting from higher volume, additional cost associated with the new terminals,  and unfavorable foreign exchange effect of Australian Dollar (AUD)-based expenses, Mexican Peso (MXN)-based expenses and Chinese Renminbi (RMB)-based expenses at the Company’s container terminals in Melbourne, Manzanillo and Yantai, respectively.  The increase was partially tapered by continuous cost optimization measures, and favorable foreign exchange effect of Iraqi Dinar (IQD)-based expenses at Basra Gateway Terminal in Iraq and Brazilian Reais (BRL)-based expenses at ICTSI Rio and Tecon Suape in Brazil.  Excluding the cost associated with the new terminals, consolidated cash operating expenses would have increased by 12 percent. 

Consolidated EBITDA increased 29 percent to USD829.4 million for the first three quarters of 2021 from USD643.2 million in 2020 mainly due to higher revenues.  The increase was partially tapered by the increase in cash operating expenses. Excluding the contribution of new terminals, EBITDA would have increased by 27 percent. EBITDA margin, on the other hand, increased to 61 percent in the first nine months of 2021 from 58 percent the previous year.

Consolidated financing charges and other expenses for the first nine months of 2021 marginally increased by 0.1 percent from USD105.47 million in 2020 to USD105.53 million in 2021 primarily due to higher interest expense resulting from the issuance of USD400M 10-year senior notes in June 2020, tapered by lower COVID-19 related expenses.

Capital expenditures, excluding capitalized borrowing costs, for the nine months ended 30 September 2021, amounted to USD104.0 million.  These were mainly for the ongoing expansion at Manila International Container Terminal (MICT) and ICTSI DR Congo (IDRC), and the  acquisition of port facilities and equipment at ICTSI Nigeria in the Port of Onne.  The Group’s capital expenditure budget for 2021 is approximately USD250.0 million.  The estimated capital expenditure budget will be utilized mainly for the completion of the expansion project at MICT, the ongoing yard expansion at IDRC, the new expansion project at Victoria International Container Terminal in Melbourne, Australia, equipment acquisitions and upgrades, and for various maintenance requirements.