Billionaire Enrique Razon Jr.’s International Container Terminal Services Inc. (ICTSI) saw its profit drop in the first quarter of 2018 as new projects weighed on earnings.
ICTSI, a global container port operator with a preference for emerging markets, said in a stock exchange filing on Thursday that net income from January to March this year hit $44.1 million, down 15 percent compared to the same period in 2017. The decline came as port revenues, bolstered by better volumes, rose 9 percent to $325.4 million.
ICTSI said excluding new terminals, profit during the period would have increased 18.1 percent while port revenues would have gone up 6.4 percent.
Newer terminals include Victoria International Container Terminal and South Pacific International Container Terminal Ltd., its projects in Melbourne, Australia and Lae, Papua New Guinea, respectively.
ICTSI handled consolidated volumes of 2.33 million twenty-foot equivalent units (TEUs), which was higher by 2 percent over the same period last year.
The company attributed the higher volume to better global trade activities. It also cited the “ramp-up” of ICTSI Iraq, and ICTSI Democratic Republic of Congo (IDRC) as well as its Australia and Papua New Guinea operations. It said volume went down in Guayaquil, Ecuador, and Karachi, Pakistan.
Cash operating expenses, mainly on account of new projects, rose 24 percent to $129.1 million, it added.
The company also cited higher fuel consumption and external yard rental as a result of the increase in volume, increase in the price of fuel and power rate at certain terminals, and unfavorable translation impact of Mexican Peso expenses at Contecon Manzanillo S.A.
For the first quarter, ICTSI said capital spending amounted to $68 million. This is 18 percent of the $380 million budget it is allocating for the whole year.
The budget will be spent on capacity expansion in its terminal operations in Manila, Mexico, and Iraq; continuing rehabilitation and development of the Company’s container terminal in Honduras; procurement of additional equipment and minor infrastructure works in its newly acquired terminal operations in Papua New Guinea; and the completion of its new barge terminal project in Cavite City, Philippines. /kga