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Buenos Aires start-up sees ICTSI’s H1 net income dip 13% to $87.3m

Buenos Aires start-up sees ICTSI’s H1 net income dip 13% to $87.3m
International Container Terminal Services (ICTSI) has attributed much of a 10% surge in global container volumes for the first half of 2016 to Iraq’s Basra Gate Terminal but says start-up expenses at its new terminal in Argentina has dragged down net income by 13% to $87.3m.

The Philippines-based global terminal operator has reported a 0.2% period-on-period decrease in revenue from port operations of $550.8m. It’s H1 EBITDA of $257.5m was 8% higher than the $237.4m for the first six months of 2015 but net income was down from $100.4m to $87.3m.

ICTSI pegged the 13% dip in net income attributable to equity holders on unfavourable volume mix, lower non-containerised and storage revenues, and lower capitalised borrowing costs and higher depreciation and amortization expenses related to its new Tecplata terminal in Buenos Aires.

“Excluding the effect of Tecplata and new projects, consolidated net income attributable to equity holders would have increased by 6%,” ICTSI said, noting a 38% increase in financing charges to $45.9m mainly due “to slightly higher average loan balance and lower capitalised borrowing costs due to the cessation of the capitalization of interest expense as ICTSI opened Tecplata”.

ICTSI consolidated throughput volume for H1 was 4,264,633 teus compared to 3,888,130 teus in H1 2015.

The ramping up of operations at ICTSI Iraq (Basra Gate Terminal), new shipping line customers and services at its terminals in Guayaquil, Ecuador, Manzanillo, Mexico, Karachi, Pakistan and Jakarta, Indonesia and improved trade activities at most of its terminals in the Asia region were credited for the 10% uptick.

ICTSI said the 0.2% fall in gross revenues for H1 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.”

Consolidated cash operating expenses in H1 were 10% lower at $204.2m, driven by lower costs of repairs and maintenance and equipment rental at certain terminals, lower fuel costs and operational efficiencies.

“The decline in cash operating expenses, however, was tapered by the expense contributions and start-up costs of new terminals and projects in Argentina, Australia and Democratic Republic of Congo.” 

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Capital expenditures for the first half of 2016 amounted to $157.8m, approximately 38% of ICTSI’s $420m capital expenditure budget for 2016.  

“The established budget is mainly allocated for the completion of the initial stage of [ICTSI’s] new container terminals in Australia, Democratic Republic of Congo and Iraq, and the continuing development of the company’s projects in Honduras and Mexico.

“In addition, ICTSI invested $32.3 million in the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd (PSA) in Buenaventura, Colombia.  ICTSI’s share for 2016 to complete the initial phase of the Colombian project is approximately $60m.”

Q2 revenue increased 11% to $284.3m and EBITDA surged 23% to US$135.5m.  Net income declined 3% from $46.4m to $45.1m in 2016.

For the quarter ending June 30, 2016, total consolidated throughput was 16% higher at 2.21m teus compared to 1.90m teus for the corresponding period in 2015. 

ICTSI operates container terminals in the 50,000 to 2.5m teu per year range across four continents and “continues to pursue container terminal opportunities around the world”.