Foreign projects boost ICTSI income

April 16, 1998 PSE CIRCULAR FOR BROKERS NO. 687-98 PRESS RELEASE Foreign projects boost ICTSI income International Container Terminal Services, Inc. (ICTSI) gained momentum toward becoming a global port operator in 1997 as its foreign port operations commenced to increase their profit growth and contribution, ICTSI chairman and CEO Enrique K. Razon Jr. reported during its stockholders meeting yesterday that the company received a strong boost from its overseas subsidiaries, Buenos Aires Container Terminal Services, S. A. (BACTSSA) and International de Contenedores Asociados de Veracruz, S. A. de C. V. (ICAVE), after submitting banner financial results in 1997. BACTSSA operates Terminal 5 in the Port of Buenos Aires in Argentina, while ICAVE operates the container terminal in the Port of Veracruz in Mexico. cdlex BACTSSA and ICAVE, which are unconsolidated joint venture subsidiaries, contributed PhP254.7 million in earnings during the year. This represents a more than four-fold growth from its 1996 earnings of PhP55.9 million. "Our vision to be a global port management company and our strategy of investing and putting up world-class container terminals that can compete on an equal, if not higher level, than the best in the world, has enabled us to reap business dividends that will drive future growth and increase shareholder value,"' Razon said. BACTSSA achieved breakthroughs as it posted revenues of US$38.4 million, up 45 per cent over last year's US$26.4 million, and net income of US$7.9 million in a dramatic reversal from a net loss of US$1.6 million. ICAVE's revenues soared 84 per cent to US$39.5 million over last year's US$21.5 million. Net profit increased 41 per cent from US$4.4 million in 1996 to US$6.2 million. After only two years of operation, ICAVE has made significant gains as it handled 32 per cent of total container throughput in the entire Mexican port system. "The exemplary operating and financial performance of our overseas ports demonstrate the validity of ICTSI's strategy of bringing our expertise abroad," Razon noted. He also said that ICTSI's overseas ventures have given the company added strength to withstand regional economic shocks and a hedge against the domestic economy's downturn in the face of the regional currency instability. ICTSI managed to post moderate growth in group-wide financial results last year. It reported consolidated gross revenues of PhP2.77 billion in 1997, up nearly nine percent from PhP2.55 billion the previous year. The growth in gross revenues slowed down from the 17 per cent increase in 1996 due primarily to the moderation in container throughput at the Manila International Container Terminal (MICT) due to reduced business activity. The MICT handled a total of 901,881 TEUs, an increase of 6.4 per cent from 848,017 TEUs in 1996. Consolidated net profit after tax amounted to PhP290.3 million, down 39 per cent from the PhP474.7 million in 1996. The lower income was attributable to foreign exchange losses booked as a result of the currency devaluation, increased interest costs that resulted from the regional financial volatility, higher operating expenses and the delay in the implementation of tariff rate increases. The company's total assets increased 87 per cent to PhP12.6 billion from PhP6.76 billion at the end of 1996. Stockholders' equity totaled PhP3.35 billion, an increase of 36 per cent from PhP2.47 billion. LexLib Razon said that ICTSI remains optimistic about the company's prospect. He also disclosed that new port management contacts in Ensenada, Mexico; Dammam, Saudi Arabia and recently, Rosario, Argentina were awarded to the company. These projects, together with its terminal in Karachi, Pakistan that is undergoing development, will further impact positively to the company's bottomline in 1998.