PSE Circular for Brokers No. 2596-98

November 16, 1998 PSE CIRCULAR FOR BROKERS NO. 2596-98 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-1(b)(3) THEREUNDER 1. Date of Report 1998 September 30 2. SEC Identification Number 147212 3. BIR Tax Identification Number 000-323-228 4. Registrant INTERNATIONAL CONTAINER TERMINAL SERVICES INC. 5. Country of Incorporation Philippines 6. Industry of Classification Code 7. Address of Principal Office ICTSI Administration Building MICT South Access Road, North Harbor, Manila Postal Code: 1012 8. Registrant's Telephone Number (632) 245-41-01 9. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Stock 2,296,654,939 shares 10. Item number reported herein: Item 9 Other Events : Unaudited consolidated second quarter results of operations Based on the unaudited consolidated financial statements for the third quarter of 1998, ICTSI posted revenues of P1.16 billion, a 60% increase from the same period last year of P725 million. MICT revenues dropped by 4% versus the same period in 1997 as a result of a 22% decline in TEU volume. Containers handled at the MICT declined from 245,810 TEUs in the third quarter of 1997 to 190,806 TEUs in the third quarter of 1998. Total consolidated revenues of P1.6 billion included revenues from ICTSI International Holdings Corp. (IIHC) and local subsidiaries amounting to approximately P459 million. Net income for the quarter posted a 16% decline from P111 million in 3Q97 to P93 million in 3Q98 attributed to a 55% increase in interest expense from P88 million in 3Q97 to P136 million in 3Q98, 83% increase in operating expenses and an increase in the provision for unrealized foreign exchange loss. aisadc Item 10 Financial Statements/Exhibits The unaudited interim consolidated financial statements of the Company are filed as part of this Form 11-C on pages 3 to 5. Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. By: (SGD.) ROBERTO B. JAYME Senior Vice President/Chief Financial Officer INTERNATIONAL CONTAINER TERMINAL SERVICES, INC . CONSOLIDATED BALANCE SHEETS ( in Pesos '000 ) Unaudited Audited For nine months For year ended ended 30 September 31 Dec. 1998 1997 ASSETS Current Assets Cash and cash equivalents 1,103,582 1,448,054 Accounts receivable-trade 342,533 254,269 Spare parts and supplies 208,374 223,574 Prepaid expenses/other current assets 1,061,772 449,058 Total current assets 2,716,261 2,374,955 Investments in Shares of Stock 2,384,512 1,976,586 Property and Equipment 7,074,455 5,793,430 Other Assets 2,952,037 2,490,640 TOTAL ASSETS 15,127,265 12,635,611 LIABILITIES AND EQUITY Current Liabilities Loans payable 1,313,526 778,569 Accounts payable/accrued exp 781,991 535,981 Income tax payable 800 67,934 Current portion of LT Debt 301,284 687,966 Total current liabilities 2,397,601 2,070,450 Long-Term Liabilities 7,868,360 7,072,981 Minority Interest 272,002 141,355 Stockholders' Equity Capital stock 2,282,499 1,367,969 Additional paid-in capital 2,699,410 2,473,534 Revaluation increment 14,620 16,584 Share in translation adjustment 693,120 108,090 Retained earnings 468,851 953,845 Shares held by a subsidiary (1,569,198) (1,569,197) Total stockholders' equity 4,589,302 3,350,825 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 15,127,265 12,635,611 INTERNATIONAL CONTAINER TERMINAL SERVICES, INC . STATEMENT OF INCOME AND RETAINED EARNINGS ( Unaudited Consolidated ) ( In 000 ) Nine months ended Three months Ended September 30 1998 1997 1998 1997 GROSS REVENUES 3,105,904 2,021,264 1,156,772 725,053 FEES TO PORT AUTHORITY (1,141,574) (563,610) (427,092) (196,651) NET REVENUES 1,964,330 1,457,654 729,680 528,402 OPERATING EXPENSES (1,584,554) (883,983) (566,008) (308,570) INCOME FROM OPERATIONS 379,776 573,671 163,672 219,832 OTHER CHARGES - Net Equity in net earnings (losses) of investees 331,557 134,528 185,981 64,064 Unrealized foreign exchange loss (197,570) (72,411) (85,715) (72,411) Interest and others (200,837) (189,126) (157,192) (74,706) (66,850) (127,009) (56,926) (83,053) INCOME BEFORE INCOME TAX, EXTRAORDINARY ITEM AND MINORITY INTEREST 312,926 446,662 106,746 136,779 PROVISION FOR (BENEFIT FROM) INCOME TAX 86,476 (102,964) 31,869 (57,696) INCOME BEFORE EXTRAORDINARY ITEM AND MINORITY INTEREST 399,402 343,698 138,615 79,083 EXTRAORDINARY ITEMS Realized foreign exchange gain (loss) - 36,538 - 36,538 Cost of labor restructuring - (15,150) - - Loss on extinguishment of debt - (64,127) - (4,772) - (42,739) - 31,766 INCOME BEFORE MINORITY INTEREST 399,402 300,959 138,615 110,849 SHARE OF MINORITY INTEREST (120,857) - (46,109) - NET INCOME 278,545 300,959 92,506 110,849 Retained Earnings - Beginning 953,845 1,125,081 1,141,193 1,315,191 Retained Earnings - End 468,851 966,844 350,848 966,844 Earnings per share 0.1382 0.22 INTERNATIONAL CONTAINER TERMINAL SERVICES, INC . STATEMENTS OF CASH FLOW ( Unaudited Consolidated ) ( in Pesos '000 ) Nine Months Ended Three months Ended September 30 1998 1997 1998 1997 CASH FROM OPERATING ACTIVITIES Net Income 278,545 300,958 92,506 110,848 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 592,293 343,913 205,087 195,408 Provision for decline (recovery) in market value of short-term investments 47,955 - 16,625 - Dividends received 231,155 - 76,201 - Loss on extinguishment of long-term debt - 98,658 - 98,658 Loss on sale of marketable equity securities (191,712) 15,918 3,842 15,918 Bad debts written-off 2,140 - 2,140 - Benefit from deferred income tax (90,311) (18,202) (34,337) (18,202) Minority interest 120,857 - 46,109 - Equity in net loss (earnings) of investees (290,584) (134,528) (145,008) (64,064) Gain on sale of property and equipment (4,406) (25,304) (4,339) (25,304) Changes in assets and liabilities: Decrease (increase) in: Accounts receivable - Trade (79,643) 18,654 (119,294) 22,481 Spare parts and supplies 19,650 (34,902) (3,777) (22,298) Prepaid expanses and other current assets 1,459,262 (254,772) 1,497,306 (57,726) Increase (decrease) in: Accounts payable and accrued expanses 200,827 5,507 147,771 (28,153) Income tax payable (67,143) 6,472 (31,690) 1,950 Net cash provided by operating activities 2,228,885 322,372 1,749,142 229,516 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of: Property equipment 20,503 195,724 20,403 195,724 Marketable equity securities 379,973 38,064 757 38,064 Additions to: Investments in shares of stock (195,955) (154,091) (97,049) (132,869) Property and equipment (1,721,632) (701,187) (296,300) (127,215) Increase in other assets (1,346,746) (627,721) (1,424,058) (268,718) Net cash used in investing activities (2,863,857) (1,249,211) (1,796,247) (295,014) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from: Short-term borrowings 672,327 468,701 (66,192) (328,569) Long-term borrowings - 2,505,919 - 334,360 Issuance of stocks 282 14,685 (729) (150,865) Payments of: Short-term borrowings (141,554) (115,276) (30,000) 133,254 Long-term borrowings (285,525) (313,886) (96,963) (95,396) Additional Paid-in capital (4,680) - (4,680) - Translation Adjustment - - 22,702 - Minority Interest - - (4,138) - Net cash used in financing activities 240,850 2,560,143 (180,000) (107,216) Effect of Exchange Rate Changes on Cash and Cash Equivalents 49,650 (2,214) 5,685 (2,214) NET DECREASE IN CASH AND CASH EQUIVALENTS (344,472) 1,631,090 (221,420) (174,928) CASH AND CASH EQUIVALENTS, BEGINNING 1,448,054 177,087 1,325,002 1,983,105 CASH AND CASH EQUIVALENTS, END 1,103,582 1,808,177 1,103,582 1,808,177