Manila–(PHStocks)–International Container Terminal Services Inc. (ICTSI, PSE: ICT) today reported unaudited consolidated financial results for the quarter ended March 31, 2016 posting revenue from port operations of $266.5 million, a decrease of 10% from the $296.1 million reported for the same period last year; earnings before interest, taxes, depreciation and amortization (EBITDA) of $121.9 million, 4% lower than the $127.5 million generated in the first quarter of 2015; and net income attributable to equity holders of $42.2 million, down 22%
compared to the $54 million earned in the same period last year. The decline in earnings was mainly driven by lower storage and ancillary revenues, unfavorable container volume mix, lower capitalized borrowing cost , higher depreciation and amortization expenses and start-up costs of new terminals and projects. Diluted earnings per share for the period declined 40% to $0.014 from $0.023 in 2015.
ICTSI handled consolidated volume of 2,053,639 twenty-foot equivalent units (TEUs) for the quarter ended March 31, 2016, 4% more than the 1,982,773 TEUs handled in the same period in 2015. The increase in volume was mainly due to the acquisition of new shipping line customers and services at the company’s terminals in Guayaquil, Ecuador, Manzanillo, Mexico, and Karachi, Pakistan; continuing ramp-up at ICTSI Iraq; and improvement in trade activities at the company’s terminals in Jakarta, Indonesia and most Philippine ports.
Gross revenues from port operations for the quarter-ended March 31, 2016 declined 10% to $266.5 million from the $296.1 million reported in the same period in 2015. The decrease in revenues was mainly due to unfavorable container volume mix, lower storage and ancillary revenues and unfavorable translation impact of the depreciation of local currencies to the US dollar at certain terminals. The decline in gross revenues was tapered by tariff rate adjustments and new contracts with shipping lines and services at certain terminals, and the continuing ramp-up at ICTSI Iraq. Excluding the translation impact of local currency depreciation to the US dollar, particularly the 36% depreciation of the Brazilian Reais (BRL) at TSSA; the 21% depreciation of the Mexican Peso (MXN) at CMSA; and the six percent depreciation of the Philippine Peso (PhP) at the various Philippine terminals, consolidated gross revenues would have decreased by 6% in 2016.
Consolidated cash operating expenses in the first quarter of 2016 was 15% lower at $101.5 million compared to $119.7 million in the same period in 2015. The reduction in cash operating expenses was mainly driven by lower costs of repairs & maintenance and equipment rental at certain terminals; lower fuel costs as a result of the lower global prices of fuel and operational efficiencies; lower variable costs at ICTSI Oregon; and the favorable translation impact to the US Dollar of the Brazilian, Mexican and Philippine terminals’ local currency expenses. 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, Democratic Republic of Congo, and Laguna in southern Philippines. Excluding the translation impact of currency depreciation, consolidated cash operating expenses would have decreased by 9% in 2016.
Consolidated EBITDA for the first quarter of 2016 decreased 4% to $121.9 million from $127.5 million in 2015 mainly due to lower storage and ancillary revenues, unfavorable container volume mix, and unfavorable translation impact from significant depreciation of local currencies to the US Dollar at certain terminals. Excluding the translation impact of currency depreciation, consolidated EBITDA would have decreased by 3% in 2016. Consolidated EBITDA margin, on the other hand, increased to 46% in the first quarter of 2016 compared to 43% in the same period in 2015 as the new terminals continue to ramp-up and improve efficiencies.
Consolidated financing charges and other expenses for the quarter increased 26% from $16.6 million in 2015 to $20.9 million in 2016 primarily due to slightly higher average loan balance and lower capitalized borrowing cost.
Capital expenditures, excluding capitalized borrowing costs and expenses, for the first quarter of 2016 amounted to $89.5 million, approximately 21% of the $420 million capital expenditure budget for the full year 2016. The established budget is mainly allocated for the completion of the initial stage of the Company’s new container terminals in Democratic Republic of Congo and Iraq, and the continuing development of the Company’s project in Australia. In addition, ICTSI invested $20 million in the development of SPIA, its joint venture container terminal development project with PSA International Pte Ltd. (PSA ) in Buenaventura, Colombia. The Company’s share for 2016 to complete the initial phase of the project is approximately $60 million.
ICTSI is widely acknowledged to be a leading global developer, manager and operator of container terminals in the 50,000 to 2.5 million TEU/year range. ICTSI has an experience record that spans four continents and continues to pursue container terminal opportunities around the world.