The balanced financial and operational results across its global portfolio enhanced EPS by 68% to US$0.135.
ICTSI posted revenue from its global port operations of US$1.06 billion, an increase of 20 per cent from the US$882.6 million reported for the first six months of 2021; Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) of US$672.1 million, 26 per cent higher than the US$532.5 million generated the same period last year; and net income attributable to equity holders of US$294.5 million, 50 per cent more than the US$196.7 million earned in the first half of 2021 primarily due to higher operating income; higher net foreign exchange gain, increase in equity share in net profit of joint ventures; and substantial contribution of new terminals; partially tapered by an increase in depreciation and amortization, and interest on loans, concession rights payables and lease liabilities.
Equity share in net profit increases by 308%
Equity share in net profit of joint ventures increased in the first half of 2022 by 308 per cent to US$3.0 million from US$742 thousand for the same period in 2021 due to the company’s share in higher net earnings in Manila North Harbour Port, Inc. (MNHPI) and lower net loss in Sociedad Puerto Industrial Aguadulce S.A. (SPIA). Diluted earnings per share for the first half of 2022 surged 68% to US$0.135 compared to US$0.081 in the same period in 2021 due to higher net income and lower cumulative distributions to holders of perpetual capital securities.
Enrique K. Razon, Jr., ICTSI chairman and president, said: “We have delivered another period of strong operational and financial results across our global portfolio with throughput growth of five per cent. Revenues grew by 20% to US$1.06 billion, and EBITDA increased by 26% to US$672.1 million, driven by volume growth, a substantial contribution from new terminals, and an improvement in trade activities as economies recover from the impact of lockdown restrictions and the COVID-19 pandemic.
“Over the years, we have demonstrated our resilience and the benefits of having a clear strategic market position and a disciplined and purpose-led culture. Our talented team, expertise and experience remain key as we navigate geopolitical and economic uncertainties. Despite these external challenges, we remain confident in driving growth across our global business and generating long-term sustainable value for the benefit of all our stakeholders.”
Gross revenues increased by 20 per cent to US$1,062.9 million
For the quarter ended 30 June 2022, revenue from global port operations increased 20 per cent from US$447.0 million to US$534.6 million; EBITDA was 25 per cent higher at US$334.3 million from US$267.7 million; and net income attributable to equity holders was at US$152.2 million, 43 per cent more than the US$106.6 million in the same period in 2021. Diluted earnings per share for the second quarter of 2022 were 57 per cent higher at US$0.070 compared to US$0.045 in the same period in 2021.
ICTSI handled a consolidated volume of 5,752,582 twenty-foot equivalent units (TEUs) in the first six months of 2022, five per cent more compared to the 5,459,523 TEUs handled in the same period in 2021, primarily due to volume growth and general 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 June 30, 2022, the total consolidated throughput was six per cent higher at 2,919,581 TEUs compared to 2,751,731 TEUs in 2021.
Gross revenues from the company’s global port operations for the first half of 2022 increased by 20 per cent to US$1,062.9 million compared to the US$882.6 million reported in the same period in 2021.
The growth is mainly due to volume growth at most terminals, favourable container mix; tariff adjustments at specific terminals; new contracts with shipping lines and services; higher revenues from ancillary services, and the contribution of new terminals Manila Harbor Center Port Services, Inc. (MHCPSI) in the Philippines, International Container Terminal Services Nigeria Ltd. (ICTSNL) in Nigeria and IRB Logistica in Brazil; partially tapered by a decline in trade activities and the unfavourable impact of foreign exchange at specific terminals.
Gross revenues increased 20 per cent from US$447.0 million to US$534.6 million.
Excluding the contribution of the new terminals in the Philippines, Nigeria and Brazil, consolidated gross revenues from its global port operations would have increased by 17 per cent in the first half of 2022. For the second quarter of 2022, gross revenues increased 20 per cent from US$447.0 million to US$534.6 million.
Consolidated cash operating expenses in the first six months of 2022 was 14 per cent higher at US$283.9 million compared to US$248.2 million in 2021. The increase in cash operating expenses was mainly due to additional costs associated with the new terminals in the Philippines, Nigeria and Brazil; higher equipment and facilities-related expenses resulting from an increase in prices and consumption of fuel and power driven by volume growth; higher contracted services and overtime as a result of volume increase at specific terminals; government-mandated and contracted salary adjustments; and unfavourable foreign exchange effect of BRL-based expenses at ICTSI Rio and Tecon Suape S.A. (TSSA) in Brazil.
This was partially tapered by continuous cost optimisation measures and favourable foreign exchange effects, mainly of Philippine Peso (PHP)-, Australian Dollars (AUD)-, Pakistani Rupee (PKR)-, and Polish Zloty (PLN)- based expenses at Philippine terminals, Victoria International Container Terminal (VICT) in Melbourne, Australia, Pakistan International Container Terminal (PICT) in Karachi, Pakistan, and Baltic Container Terminal (BCT) in Gdynia, Poland, respectively. Excluding the cost associated with the new terminals, consolidated cash operating expenses would have increased by 11 per cent.
Consolidated EBITDA for the first six months of 2022 increased 26 per cent to US$672.1 million from US$532.5 million in 2021, mainly due to higher revenues from its global port operations, partially tapered by the increase in cash operating expenses. Consequently, the EBITDA margin increased to 63 per cent in the first half of 2022 from 60 per cent in 2021.
Capital expenditure budget for 2022 is approximately US$330.0 million
Consolidated financing charges and other expenses increased 30 per cent to US$88.9 million for the first six months ended 30 June 2022 from US$68.6 million in 2021, mainly due to higher interest and financing charges on borrowings primarily due to the issuance of US$300 million senior notes in November 2021, which funded the redemption of US$183.8 million worth of 5.875 per cent and US$85.2 million of 4.875 per cent senior guaranteed perpetual capital securities with call dates in 2022 and 2024, respectively; the consolidation of the outstanding loan of the company’s new terminal in the Philippines; and higher COVID-19 related expenses.
Capital expenditures, excluding capitalized borrowing costs, amounted to US$231.3 million for the first six months of 2022. These were mainly for ongoing expansion projects at Manila International Container Terminal (MICT) in the Philippines, VICT in Melbourne, Australia, ICTSI DR Congo S.A. (IDRC) in Matadi, Democratic Republic of Congo, Contecon Manzanillo S.A. de C.V. (CMSA) in Manzanillo, Mexico, and the acquisition of land in the Philippines and Brazil for new projects.
The group’s capital expenditure budget for 2022 is approximately US$330.0 million. This will be utilised mainly to pay the concession extension upfront fees at Madagascar International Container Terminal Services Ltd. (MICTSL), ongoing expansion at the company’s terminals in the Democratic Republic of Congo, Australia, Mexico and Philippines; equipment acquisitions and upgrades; and for various maintenance requirements.