PSE Circular for Brokers No. 1098-99

May 17, 1999 PSE CIRCULAR FOR BROKERS NO. 1098-99 PRESS RELEASE May 14, 1999 ICTSI 1Q income up 46% International Container Terminal Services, Inc. (ICTSI) posted net income of PhP69.2 million in the first quarter, up 46 per cent from 1998 IQ net income of PhP47.4 million. Net income increased primarily because of the strong performance from all the terminals operated by ICTSI, including the Manila International Container Terminal (MICT). LLjur During the period in review, consolidated volume grew by 47 per cent, from 400,201 TEUs in 1998 to 589,141 TEUs. The MICT handled 187,582 TEUs, up six per cent from 177,560 TEUs in the first quarter of 1998. Buenos Aires Container Terminal Services, S. A. (BACTSSA) in Argentina handled 65,605 TEUs, an increase of 15 per cent over the 1998 volume of 57,187 TEUs. Volume handled by Internacional de Contenedores Asociados de Verecruz, S. A. de C. V. (ICAVE) in Mexico increased by 22 per cent, from 75,374 to 92,047 TEUs. International Ports Services Co. Ltd. (IPS) in Saudi Arabia handled 97,949 TEUs, up nine per cent from the 1998 volume of 90,080 TEUs. Karachi International Container Terminal Ltd. (KICT) in Pakistan, which began operating in November last year, handled 26,312 TEUs. As a result of higher volumes handled, ICTSI's consolidated gross revenues increased by 30 per cent, from PhP1.29 billion in the first quarter of 1998 to PhP1.67 billion. Growth in revenues is attributed to revenue increases of 43 per cent to PhP942.3 million from ICTSI International Holdings Corp. (IIHC), 14 per cent to PhP715.6 million from the MCT, and PhP 15.5 million from other local subsidiaries. Higher volumes handled by IIHC subsidiaries contributed to higher revenues: 28 per cent growth from ICAVE, 61 per cent from IPS. Moreover, Ensenada International Terminal, S. A. de C. V. (EIT) in Mexico and of Puerto Rosario, S. A. (PROSA) in Argentina primarily began operations in the first quarter of 1999. IIHC holds the beneficial interests of ICTSI in its foreign operations. Apart from improved volumes, MICT revenues were bolstered by 10 per cent increases in arrastre and special service charges, which took effect in January this year. Port authorities share in revenues increased by 93 per cent, from PhP291.5 million in the first quarter of 1998 to PhP683.6 million in the first quarter of 1999. The significant increase is a result of higher payments made by IIHC subsidiaries of PhP306 million, up more than threefold from payments in 1998 of PhP71.9 million. Also, fixed fees in 1999 payable to the Philippine Ports Authority, which are payable in quarterly installments, increased from US$10.7 million in 1998 to US$11.2 million. Consolidated administrative and operating expenses for the quarter in review totaled PhP778.5 million, an increase of 14 per cent from PhP683.6 million in 1998. IIHC expenses increased by 43.9 per cent, from PhP309.6 million in 1998 to PhP445.5 million, as EIT and PROSA came on stream. On the other hand, MICT's expenses declined by 15 percent, from PhP360.7 million in 1998 to PhP306.7 million in 1999. Equity in net earnings from BACTSSA and KICT, decreased by 31 per cent, from PhP26.65 million in 1998 to PhP18.36 million in 1999. The decline is largely attributable to KICT's startup losses. On the other hand, BACTSSA continued to perform strongly during the period in review, posting a 27 per cent increase in net income.