International Container Terminal Services Inc. on Tuesday reported a six-percent drop in net income in the first half of the year due to higher costs of its new terminals in Papua New Guinea and Australia.
The port operator owned by tycoon Enrique Razon posted a net income of $97.7 million in the first six months of the year, down from $103.6 million year-on-year.
“The decrease in net income was due primarily to the start-up costs of the new terminals in Papua New Guinea and Australia; and the $7.5 million non-recurring gain on the termination of the sub-concession agreement in Nigeria in the second quarter of 2017,” ICTSI said.
The lower net income, however, tempered by the strong operating income from organic terminals.
Excluding the non-recurring gains, consolidated net income attributable to equity holders would have decreased marginally by one percent in 2018.
ICTSI’s posted revenues of $661.8 million, up 10 percent from $603.7 million on year.
“The increase in revenues was mainly due to volume growth; new contracts with shipping lines and services; increase in revenues from non-containerized cargoes, storage and ancillary services; and the contribution from the company’s new terminals in Lae and Motukea in Papua New Guinea, and Melbourne, Australia,” ICTSI said.
The company handled the consolidated volume of 4.71 twenty-foot equivalent units (TEUs) in the first six months, four percent higher than the 4.54 million TEUs a year ago.
“The increase in volume was primarily due to the robust global trade activities particularly in the emerging markets, continuing volume growth at most terminals and the contribution of the new terminals in Lae and Motukea in Papua New Guinea, and Melbourne, Australia. Excluding the new terminals, volume increased by one percent,” ICTSI said.
ICTSI’s capital expenditures, excluding capitalized borrowing costs in the first half, amounted to $134.3 million, about 35 percent of the $380-million capital expenditure for the full year of 2018.
The budget is mainly allocated for the capacity expansion of terminal operations in Manila, Mexico, and Iraq; 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.