International Container Terminal Services, Inc. (ICTSI) today reported consolidated audited financial results for the year ended December 31, 2011 posting revenue from port operations of US$664.8 million, 26 percent higher than the US$527.1 million reported last year, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of US$281.4million, an increase of 14 percent over the US$247.7 million generated in 2010, and net income attributable to equity holders of US$130.5 million, up 33 percent over the US$98.3 million earned last year. The higher net income attributable to equity holders was mainly due to the upsurge in revenues, lower financing charges, lower effective tax rate and a one-time gain on sale of non-core assets. Excluding the effect of non-recurring income and charges in both 2011 and 2010, net income attributable to equity holders in 2011 would have been US$124.4 million, 35 percent higher than the US$92.3 million in 2010. In 2011, ICTSI sold its 16.79 percent ownership stake in Portek International Limited and booked a one-time equity tax charge imposed by the Colombian tax authorities on all legal entities and individuals in Colombia. In 2010, on the other hand, ICTSI sold its 9.54 percent ownership stake in Subic Shipyard and Engineering, Inc. and 8.56 percent ownership stake in Consort Land, Inc., accelerated debt issuance cost related to the company’s refinancing exercise, and wrote-down the carrying value of certain property assets related to the company’s greenfield project in Buenaventura, Colombia.
ICTSI handled consolidated volume of 5,233,795 twenty-foot equivalent units (TEUs) for the year ended December 31, 2011, 25 percent more than the 4,202,574 TEUs handled in 2010. The increase in volume was mainly due to the continued upturn in international trade, particularly in markets where ICTSI’s ports are located, new shipping line customers and the consolidation of the Company’s new ports in Portland, Oregon, USA and Rijeka, Croatia. Excluding the volume from the two latest port acquisitions, organic volume growth was at an impressive 18 percent. Volume from the Group’s six key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar and China, which accounted for 74 percent of the Group’s consolidated volume for 2011, increased 18 percent from 3,266,133 TEUs to 3,867,407 TEUs.
Throughput from the Company’s container terminal operations in Asia increased 11 percent in 2011 from 2,652,328 TEUs to 2,956,433 TEUs. The increase was due mainly from the exceptional volume increases from the Company’s operations in Yantai Rising Dragon International Container Terminal Ltd. (YRDICTL) in Yantai, China, Davao Integrated Port and Stevedoring Services Corp. (DIPSSCOR) in Davao, southern Philippines, and Mindanao International Container Terminal Services Inc. (MICTSI) in Cagayan de Oro, southern Philippines which registered 36 percent, 30 percent and 17 percent growths, respectively. This segment accounted for 56 percent of consolidated volume in 2011 compared to 63 percent in 2010.
Volume from the company’s container terminal operations in the Americas grew by 50 percent to 1,571,005 TEUs in 2011 compared to the 1,048,971TEUs handled in 2010. Contecon Guayaquil S.A. (CGSA) in Ecuador and Tecon Suape S.A. (TSSA) in Brazil continued to deliver excellent volume growth with 35 percent and 28 percent increases, respectively. This segment also benefited from the volume generated by the newly acquired terminal in Portland, Oregon, USA. ICTSI Oregon, Inc. (IOI), a subsidiary of ICTSI, took over the operations of the container terminal in Portland, Oregon, USA on February 12, 2011 and added 176,751 TEUs to the Group’s throughput for the year. The contribution of container volume from the Americas increased from 25 percent in 2010 to 30 percent in 2011.
Container terminal operations in Europe, Middle East and Africa (EMEA) handled 706,357 TEUs in 2011, 41 percent higher than the 501,275 TEUs handled in 2010. Baltic Container Terminal (BCT) in Poland continued to perform well with an impressive 29 percent volume growth while Batumi International Container Terminal Ltd. (BICTL) nearly tripled the 16,318 TEUs it handled in 2010 to 45,442 TEUs in 2011. In addition, the EMEA segment also benefited from the volume generated by the newly acquired terminal in Rijeka, Croatia. The Company’s subsidiary, Adriatic Container Gate Terminal (AGCT), took over the operations of the container terminal in Rijeka, Croatia on April 15, 2011 and added 98,675 TEUs to the Group’s throughput for the year. EMEA operations accounted for 13 percent of consolidated volume in 2011.
Gross revenues from port operations for the year ended December 31, 2011 increased 26 percent to US$664.8 million from the US$527.1 million reported in 2010. The increase in revenues for 2011 was mainly due to the strong double digit volume growth across all geographic segments of the Group, higher storage revenues and ancillary services, favorable volume mix, and the inclusion of the new terminals in Portland, Oregon USA and Rijeka, Croatia. Excluding the revenues from the newly acquired terminals, organic revenue growth was still at an impressive 19 percent. Revenue contribution from the Group’s six key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar and China, which accounted for 85 percent of the Group’s consolidated revenues in 2011, increased 19 percent from US$476.5 million to US$565.6 million.
Revenue contribution from container terminal operations in Asia increased 11 percent in 2011 from US$273.6 million to U$302.6 million. The terminals in Davao and Cagayan de Oro in southern Philippines and in Yantai, China, registered exceptional revenue growths of 50 percent, 22 percent and 38 percent, respectively. Port operations in Asia accounted for 46 percent of consolidated gross revenues.
Container terminal operations in the Americas generated revenues US$284.1 million in 2011, 48 percent more than the US$192.1 million in 2010. The increase in revenues in this segment was due to the revenues generated by the newly acquired terminal in Portland, Oregon, USA and the robust 30 percent and 34 percent revenue growth in the Company’s Brazil and Ecuador operations, respectively. Revenues from the Company’s ports in the Americas contributed 43 percent to ICTSI’s 2011 consolidated gross revenues.
The Group’s EMEA operations, which accounted for 12 percent of the Company’s revenue in 2011, registered strong growth of 27 percent from US$61.5 million in 2010 to US$78.1 million in 2011. The increase in revenues in EMEA was mainly due to the Company’s terminals in Poland and Georgia, which posted 17 percent and 117 percent higher revenues, respectively, and the revenues from the new terminal operations in Croatia.
Total consolidated cash operating expenses for 2011 grew 43 percent to US$289.3 million from US$203.0 million in 2010. The increase was mainly driven by the higher labor and contracted services, overtime, fuel and power cost and consumption, repairs and maintenance, higher variable concession fees in TSSA and start-up and operating expenses of IOI and AGCT. Excluding the new terminals, total cash operating expenses would have increased by only 22 percent.
Consolidated EBITDA for the 2011 increased by 14 percent to US$281.4 million from US$247.7 million in 2010 mainly due to the double-digit volume growth across all geographic segments of the Group and stronger revenues from storage and ancillary services. Consolidated EBITDA margin, however, declined in 2011 by five percentage points to 42 percent from 47 percent in 2010 due to higher variable concession fees in TSSA, higher business development and start-up expenses and higher labor, equipment and facilities-related expenses. Excluding the new terminals, EBITDA margin would have only been marginally down to 46 percent.
For 2011, consolidated financing charges and other expenses decreased four percent to US$46.4 million compared to the previous year¹s US$48.5 million. The reduction was primarily a result of higher capitalized borrowing costs in 2011 and the acceleration of the debt issue cost incurred in the Company’s refinancing exercise in 2010.
The effective tax rate in 2011 decreased to 24 percent compared with 29 percent in 2010. The decrease was mainly attributable to lower operating losses at terminals with no tax benefits and additional income tax incentives at TSSA.
ICTSI’s capital expenditure in 2011 in the amount of US$227.8 million was spent mainly for the civil works and major equipment at its existing terminals in Manila, Ecuador and Brazil and port development projects in Argentina and Mexico. For 2012, the total estimated consolidated capital expenditure is approximately US$550 million, US$345 million of which is for the greenfield projects in Argentina, Mexico and Colombia, and the balance mainly for civil works, systems improvement, and purchase of major cargo handling equipment at its port operations in Manila (MICT), Croatia (AGCT), Brazil (TSSA) and Ecuador (CGSA).