ICTSI terminates port contract in India

 

International Container Terminal Services Inc (ICTSI) has terminated its contract for the management and operation of a container terminal in India.

In a disclosure to the Philippine Stock Exchange, the Enrique Razon-led port operator said its subsidiaries ICTSI Ltd and ICTS (India) Pte Ltd and L&T Shipbuilding Ltd (LTSB) have signed a termination agreement cancelling the container port agreement for the management and operation of the Kattupalli Container Terminal (KCT) in Tamil Nadu, India.

"The marketing and regulatory management were the responsibilities of our landlord as were many of the sourcing and procurement activities. This limited our ability to add the value required to make a real impact to the terminal's success. Following careful consideration, we amicably agreed to rescind the management contract and return all un-accreted economics," ICTSI vice president for finance and treasurer Rafael J. Consing Jr. said in a text message.

LTSB is a joint venture between Larsen & Toubro Ltd (L&T) and Tamil Nadu Industrial Development Corp (TIDCO).

"The mutual decision for the contract cancellation came after lengthy discussions and thorough consideration by both ICTSI and LTSB. Both concluded that the existing contract is not beneficial to either party in its current form," ICTSI said.

"For its part, ICTSI deems the cancellation of the Kattupalli contract in keeping with the ICTSI Group’s overall strategy of moving away from contracts that isolate ICTSI from the facility’s day to day operations, including regulatory and commercial activities," the port operator said, adding that it will be reimbursed for the license fee it paid to operate the terminal.

ICTSI said the contract cancellation has no effect or influence on any of its other operations.

"The group will continue to actively search for opportunities in India," it said.

Last May, ICTSI bagged a 26-year contract to construct and operate a container terminal in Melbourne, Australia.

In April, ICTSI's wholly owned subsidiary, ICTSI (ME) JLT, signed a contract with General Company for Ports of Iraq (GCPI) to operate, develop and expand container facilities at the Port of Umm Qasr.

ICTSI last year earned $172.4 million, up from $143.2 million the previous year. It operates ports in Manila, other parts of Asia, the Americas, Europe and Africa.

- Interaksyon

ICTSI says Q1 profits up 29% on sale of non-core asset in Cebu

International Container Terminal Services Inc. (ICTSI) on Wednesday said net income reached $52.4 million in the first quarter, up 29 percent from $40.7 million a year earlier.

The bottom line mainly reflected a non-recurring gain from the sale of a non-core asset in Cebu, the company said in a disclosure to the Philippine Stock Exchange.

In January, ICTSI sold its interest in Cebu International Container Terminal Inc. to Cebu Asian Rim Property and Development Corp. and Hong Kong Land (Philippines) BV for $13.2 million.

“The higher net income attributable to equity holders was mainly due to the one-time gain on sale of a non-core asset,” the disclosure read.

Net income would have been up by only 6 percent to $45.1 million without the sales proceed from Cebu International Container Terminal Inc.

The transaction helped to offset the higher interest on concession rights from the new contract of Operadora de Puerto Cortés S.A. de C.V. (OPC) in Honduras, and the depreciation, amortization and start-up expenses from the new terminals Contecon Manzanillo S.A. de C.V. in Mexico and OPC.

Port operations revenues rose 19 percent to $248.9 million from $209.3 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 6 percent to $103.6 million from $97.5 million.

Consolidated volume totaled 1.757 million twenty-foot equivalent units (TEUs), up 17 percent from 1.496 million TEU, reflecting better international and domestic trade and the latest business from new terminal operations in Mexico and Honduras, without which the first quarter volume would have grown by 1 percent.

The terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar, China and Pakistan accounted for 71 percent of the consolidated volume in January to March, said ICTSI.

“The increase in revenues was mainly due to higher storage revenues and ancillary services, favorable volume mix, tariff rate increases in certain terminals, new and renegotiated contracts with shipping lines and forwarders, and the revenue contribution from the new terminals in Manzanillo, Mexico and Puerto Cortes, Honduras,” the company said.

Cash operating expenses went up 28 percent to $108.2 million from $84.6 million, taking into account the operating expenses of new terminals in Mexico and Honduras.

Higher costs of manpower as volume increased and higher salary rates as mandated by governments in certain terminals also raised expenses.

Expenses were also incurred after the rent rebate program for ICTSI Oregon ceased starting January 2014.
Business development in pursuit of port projects also translated to additional expenses.

The company used $64 million or 21 percent of its capital expenditures in the first quarter. The full-year capex was $310 million, including allotments for new container terminals in Mexico and Argentina and the development of terminals in Honduras and Democratic Republic of Congo.
ICTSI also invested $11.4 million for the development of SPIA, a joint venture project with PSA International Pte Ltd. (PSA) in Buenaventura, Colombia.

- GMA News