International Container Terminal Services, Inc. (ICTSI) has reported robust consolidated unaudited financial results for the second quarter ending 30 June 2008:   revenue from port operations of PHP=5.04 billion, an increase of 53 percent over PHP=3.29 billion reported last year; Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) of PHP=2.19 billion, up 52 percent from the PHP=1.44 billion earned in the second quarter of 2007, and net income attributable to equity holders of PHP=784 million, an increase of 6 percent over the PHP=736 million earned in the same period last year. 
Both the 2007 and 2008 results reflect the adoption on 1 January 2008 (and restatement of 2007) of IFRIC Interpretation 12 – Accounting for Service Concession Agreements, and include an associated unrealized foreign exchange gain of PHP=219million in the second quarter of 2007 and an unrealized foreign exchange loss of PHP=129 million in the same quarter of 2008.  Excluding the unrealized gain and loss, second quarter net income attributable to equity holders would have been PHP=517 million in 2007 and PHP=913 million in 2008, an increase of 77 percent. 
For the six months ending 30 June 2008, revenue from port operations grew 49 percent, from PHP=6.40 billion to PHP=9.54 billion.  In the same period, EBITDA increased 49 percent, from PHP=2.79 billion to PHP=4.16 billion while net income attributable to equity holders grew 17 percent, from PHP=1.35 billion to
PHP=1.58 billion.  The first half net income results include an unrealized foreign exchange gain of PHP=275 million in 2007, and an unrealized foreign exchange loss of PHP=85 million in 2008.  Excluding the unrealized gain and loss, the first half net income attributable to equity holders would have been PHP=1.08 billion in 2007 and PHP=1.67 billion in 2008, an increase of 54 percent. 
Enrique K. Razon Jr., ICTSI chairman and president, commented:  “In spite of the general unease about the potential impact of the slowing global economy on trade and containerized cargo volumes, ICTSI continues to see strong business and financial results across our portfolio.  In addition to improving performance at our existing terminals, we continue to achieve improvements at the terminals we acquired last year, and are actively looking for additional acquisition opportunities.” 
ICTSI handled consolidated volume of 913,718 twenty foot equivalent units (TEUs) in the second quarter of 2008, 42 percent higher compared to the 642,274 TEUs handled in the same period in 2007.  For the six months ended 30 June 2008, total TEUs handled were 1,755,474 compared to 1,284,748 TEUs in 2007, a 37 percent increase over the same period last year. 
Domestic operations accounted for 460,016 TEUs or 50 percent of consolidated volumes for the quarter.  Volume from domestic operations grew by 19 percent in the second quarter of 2008 due mainly to an 18 percent increase at the Manila International Container Terminal (MICT). and a 34 percent increase at the company’s port operations in Davao, southern Philippines. 
Foreign container volume, on the other hand, grew 77 percent over the same period last year, driven principally by the addition of the company’s Ecuador, Syria and Georgia port operations, and exceptionally strong growth at the company’s operations in Madagascar, China, and Indonesia, which each averaged a 39 percent increase.  Foreign container volumes now account for 50 percent of total as compared with 40 percent in the same period last year, and 46 percent for the full year 2007. 
Second quarter gross revenues from port operations increased by 53 percent to PHP=5.04 billion, from the PHP=3.29 billion reported in the second quarter of 2007.  Revenues from the existing business units improved by 24 percent, accounting for 46 percent of total consolidated revenue growth during the quarter.  Combined revenues from new port operations in Ecuador, Georgia, and Syria, on the other hand, accounted for 54 percent of total consolidated revenue growth.  Revenue contribution from international operations grew 88 percent, from PHP=1.47 billion in the second quarter of 2007 to PHP=2.76 billion in the same period in 2008.  Foreign operations accounted for 55 percent of this quarter’s consolidated gross revenue, as compared with 45 percent in the second quarter of 2007, and 49 percent for the full year 2007.  Revenue contribution from domestic operations, on the other hand, grew 25 percent, from PHP=1.81 billion in the second quarter of 2007 to PHP=2.27 billion this quarter. 
Net revenues, or revenues from port operations after deducting Port Authorities’ share, totaled PHP=4.37 billion, an increase of 54 percent over the same period last year.  Port Authorities’ share represents fees and payments to the respective port authorities at each of the terminal locations of ICTSI.  Total Port Authorities’ share in revenues in the second quarter of 2008 grew by 45 percent to  PHP=662 million, from PHP=455 million in the same period last year. 
Total consolidated cash operating expenses for the quarter increased 56 percent to PHP=2.18 billion, from PHP=1.39 billion in the second quarter of 2007.  This increase is principally due to the additional expenses from new port operations in Ecuador, Syria and Georgia and pre-operating expenses from the new port in Colombia.  Increases in fuel, manpower, equipment and utilities consumption related to the increase in TEU volumes at the company’s existing operations in Manila, Brazil, Madagascar, Indonesia, China, and Davao, Philippines were also contributing factors.  For the six months ended 30 June 2008, total consolidated cash operating expenses totaled PHP=4.11 billion, 51 percent higher than the PHP=2.72 billion in the same period last year. 
Consolidated financing costs and bank charges were 7 percent higher in the second quarter 2008 at PHP=163 million compared to PHP=153 million in the same quarter last year due mainly to higher debt levels.  However, for the six months ended 30 June, consolidated financing costs and bank charges were 5 percent lower in 2008 at PHP=274 million compared to PHP=288 million in 2007. 
EBITDA for the second quarter 2008 improved 52 percent to PHP=2.19 billion, from PHP=1.44 billion in the same period in 2007.  Restated consolidated EBITDA margin for the second quarter 2008 was unchanged at 44 percent.  For the six months ended 30 June 2008, EBITDA totaled PHP=4.16 billion, 49 percent higher than the PHP=2.79 billion reported for the same six-month period in 2007.  Restated consolidated EBITDA margin was also unchanged at 44 percent. 
In the first six months of 2008, ICTSI had invested PHP=3.14 billion to expand the handling capacity and improve the operating efficiency of the company’s operations in Manila, Brazil and Madagascar, and to pay for the acquisition and rehabilitation of the new terminals in Ecuador, Syria, Georgia, and Colombia.  The company’s estimated consolidated capital expenditure for the full year 2008 is PHP=11.63 billion.  The company expects to meet funding requirements for these expenditures from internally generated funds and a committed bank facility.