Manila-based container terminal owner and operator International Container Terminal Services (ICTSI) saw a thirteen percent decrease in its net income in the first half of 2016 despite handling ten percent more containers compared to the same period a year earlier.
The company’s volumes went up during the six-month period to 4,264,633 TEUs from 3,888,130 TEUs handled during the same period in 2015.
“The increase in volume was mainly due to the continuing ramp-up at ICTSI Iraq; new shipping line customers and services in the company’s terminals in Guayaquil, Ecuador, Manzanillo, Mexico, Karachi, Pakistan and Jakarta, Indonesia; and improvement in trade activities at most of the terminals in the Asia region,” according to ICTSI.
However, the terminal operator’s income went down from USD 100.4 million in 2015 to USD 87.3 million in the first half of 2016, “due to unfavorable volume mix, lower non-containerized & storage revenues, and lower capitalized borrowing costs and higher depreciation & amortization expenses related to Tecplata, the company’s new terminal in Buenos Aires, Argentina”.
Furthermore, terminal operator’s revenue decreased by 0.2 percent, amounting to USD 550.8 million in the six-month period this year, against USD 552.1 million during the same period in 2015.
“The 0.2 percent decrease in revenues was mainly due to unfavorable container volume mix, lower non-containerized & storage revenues, and unfavorable translation impact of the depreciation of local currencies to the US dollar at certain terminals. The decline, however, was partly offset by tariff rate adjustments and new contracts with shipping lines and services at certain terminals, and the continuing ramp-up at ICTSI Iraq,” ICTSI said.
In addition, ICTSI saw an 8.5 percent increase in consolidated EBITDA (earnings before interest, taxes, depreciation and amortization), which rose to USD 257.5 million in the six half of this year from USD 237.4 million in the same period 2015 due to the strong volume and revenue growth in the second quarter and lower cash operating expenses for the period.
Capital expenditures for the first half of 2016 amounted to USD 157.8 million, approximately 38 percent of the USD 420 million capital expenditure budget for the full year 2016.
According to the company, the fund was mainly allocated for the completion of ICTSI’s new container terminals in Australia, Democratic Republic of Congo and Iraq, and the continuation of its projects in Honduras and Mexico. In addition, ICTSI said it invested USD 32.3 million in the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd. (PSA ) in Buenaventura, Colombia. The company’s share for 2016 to complete the initial phase of the project is approximately USD 60 million.