ICTSI 1H2021 net income up 73% to USD196.7M; Volume, revenues, EBITDA across all three geographic segments exceed 2019 pre-pandemic performance
- Throughput grew 14% to 5.5 million TEUs
- Revenues increased 22% to USD882.6 million
- EBITDA 28% higher to USD532.5 million
International Container Terminal Services, Inc. (ICTSI) reported unaudited consolidated financial results for the first half of 2021, posting revenue from port operations of USD882.6 million, an increase of 22 percent from the USD724.3 million reported for the first six months of 2020. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of USD532.5 million, was 28 percent higher than the USD416.4 million generated the same period last year. Net income attributable to equity holders of USD196.7 million was 73 percent more than the USD113.4 million earned in the first half of 2020 primarily due to higher operating income and significant reduction in equity in net loss of joint ventures. The increase was partially tapered by increase in interest expense on loans, concession rights payable, lease liability, and higher depreciation and amortization expenses associated with the new terminals. Diluted earnings per share for the first half of 2021 was at USD0.081 compared to USD0.043 in the same period in 2020.
Enrique K. Razon Jr., ICTSI Chairman and President said: "I am exceptionally delighted with the performance we have delivered for the first half of 2021 with our volume, revenues and EBITDA rising by 14 percent, 22 percent, and 28 percent, respectively, across all three geographic segments. These results have surpassed 2019 pre-pandemic performance and were driven by favorable market conditions and the prudent actions we took at the onset of the pandemic. This is evidenced by the strong organic growth across our terminals underpinned by the strength and resilience of ICTSI and our differentiated strategy.
“The far-reaching and devastating impact of COVID-19 has continued to affect the world and we have dedicated significant efforts and resources to the vaccination of our employees and their families. There is much more to do, and we are working hard to protect our community.
“Overall, we are proud with how the business has performed this quarter and this can be wholly attributed to our employees. The business is in a robust position and ICTSI is full steam ahead.”
For the quarter ended 30 June 2021, revenue from port operations increased 28 percent, from USD348.5 million to USD447 million. EBITDA was 31 percent higher at USD267.7 million from USD204.2 million. Net income attributable to equity holders was USD106.6 million, 98 percent more than the USD53.8 million in the same period in 2020. Diluted earnings per share was USD0.045 compared to USD0.020 in the same period in 2020.
ICTSI handled consolidated volume of 5,459,523 twenty-foot equivalent units (TEUs) in the first six months of 2021, 14 percent more than the 4,799,765 TEUs handled in the same period in 2020. The increase in volume was primarily due to 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 30 June 2021, total consolidated throughput was 20 percent higher at 2,751,731 TEUs compared to 2,290,779 TEUs in 2020.
Gross revenues from port operations for the first half of 2021 increased by 22 percent to USD882.6 million from the USD724.3 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, higher revenues from ancillary services and the contribution of new terminals – ICTSI Nigeria Ltd (ICTSNL) in Nigeria, Manila Harbor Center Port Services, Inc. (MHCPSI) in the Philippines, and Kribi Multipurpose Terminal (KMT) in Cameroon. Excluding the contribution of these new terminals, consolidated organic gross revenues would have increased by 21 percent in the first half of 2021.
For the second quarter of 2021, gross revenues increased 28 percent from USD348.5 million to USD447 million.
Consolidated cash operating expenses in the first semester of 2021 was 11 percent higher at USD248.2 million compared to USD222.8 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 in relation to volume, cost associated with the new terminals in Nigeria, Philippines and Cameroon, and unfavorable foreign exchange effect of Mexican Peso (MXN)-based expenses in Manzanillo, Mexico, Australian Dollar (AUD)-based expenses in Melbourne, Australia, and Philippine Peso (PHP)-based expenses in Philippine terminals. 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 Tecon Suape and ICTSI Rio in Brazil, respectively. Excluding the cost associated with the new terminals, consolidated cash operating expenses would have increased by nine percent.
Consolidated EBITDA increased 28 percent to USD532.5 million for the first six months of 2021 from USD416.4 million in 2020 mainly due to higher revenues, partially tapered by the increase in cash operating expenses. EBITDA margin, on the other hand, increased 60 percent in the first half of 2021 from 57 percent the previous year.
Consolidated financing charges and other expenses for the first half of 2021 increased one percent from USD67.7 million in 2020 to USD68.6 million primarily due to the issuance of USD400M senior notes in June 2020, tapered by lower COVID-19 related expenses.
Capital expenditures, excluding capitalized borrowing costs, for the six months ended 30 June 2021 amounted to USD74.4 million. These were mainly for the ongoing expansions at Manila International Container Terminal (MICT) in the Philippines and ICTSI DR Congo (IDRC) in Democratic Republic of Congo and the acquisition of port facilities and equipment at ICTSNL in Nigeria.
The Group’s capital expenditure budget for 2021 is approximately USD250 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.
