ICTSI Income down 2% in 1H

August 17, 1998 PSE CIRCULAR FOR BROKERS NO. 1900-98 ICTSI Income down 2% in 1H International Container Terminal Services, (ICTSI) posted unaudited consolidated net income of PhP186 million during the first half of the year, down two per cent from the first half income of PhP190 million in 1997. On a quarterly basis, net income declined by five per cent during the second quarter of the year, from PhP146 million in 1997 to PhP138.6 million in 1998. For both periods, net income was pulled down by three factors. Net interest expenses increased year-on-year by 68 per cent, from PhP163.2 million to PhP274.8 million during the first semester, and increased by 89 per cent quarter-on-quarter, from PhP37 million to PhP69 million. Despite the tariff increases implemented during the year, revenues from the Manila International Container Terminal (MICT) decreased by four per cent in the first half of the year, from PhP1.3 billion in 1997 to PhP1.2 billion in 1998, and by 10 per cent quarter-on-quarter, from PhP689 million to PhP622 million. Lastly, the provision for unrealized foreign exchange losses for the semester increased to PhP111.9 million. prLL Revenues from the MICT declined as a result of lower volume handled during the semester in review. First half volume declined by 22 per cent, from 432,120 TEUs in 1997 to 354,121 TEUs in 1998. Second quarter volume dropped by 23 per cent, from 228,396 TEUs in 1997 to 176,561 TEUs in 1998. Net income was largely buoyed by contributions from the company's operations abroad. Contributions from Buenos Aires Container Terminal, S. A. (BACTSSA) in Argentina and Internacional de Contenedores Asociados de Veracruz, S. A. de C. V. (ICAVE) in Mexico increased by 107 per cent for the first semester from PhP70.5 million to PhP145.6 million, and by 173 per cent for the second quarter from PhP33.4 million to PhP91.2 million. These foreign companies continued to show strong growth, handling a combined volume of 280,560 TEUs in the first half of the year, a 17 per cent increase over 1997 first half volume of 240,622 TEUS. Combined volume grew quarter-on-quarter also by 17 per cent, from 126,240 TEUs to 148,002 TEUS. Income was derived on the back of the company's consolidated first half revenues of PhP1.9 billion, a 50 per cent increase from the 1997 first half revenues of PhP1.3 billion. Second quarter consolidated revenues grew by 56 per cent, from PhP689 million in 1997 to PhP1 billion in 1998. Gross revenues include contributions of PhP454 million from ICTSI International Holdings Corp. (IIHC), which in turn derived revenues from International Ports Services Co. Ltd. (IPS) in Dammam, Saudi Arabia. IPS handled a total of 201,282 TEUs for the first semester, and 96,977 TEUs for the second quarter. IIHC is a wholly owned subsidiary, which holds the beneficial interest of ICTS's shareholdings in its foreign operations. IPS is 51 per cent owned by IIHC, and began operations last 20 December 1997. The balance of gross revenues came from other local subsidiaries. Consolidated administrative and operating expenses for the first half of the year rose by 77 per cent, from PhP575 million to PhP1 billion. Second quarter expenses grew by 54 per cent, from PhP301 million to PhP464 million. Expenses include those of IIHC and local subsidiaries amounting to PhP134 million.