Philippine-based international port developer International Container Terminal Services, Inc. (ICTSI) posted revenue from port operations of $474.9 million for nine months ending Sept. 30 2011. The income based on ICTSI's consolidated unaudited financial results for the period is 29 percent higher than the $368.2 million reported in the same period last year.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $208.3 million, an increase of 18 percent over the $176.7 million generated in 2010, and net income attributable to equity holders of $98.17 million, up 39 percent over the $70.68 million earned last year.

The higher net income attributable to equity holders was mainly due to the upsurge in revenues, lower effective tax rate for the period and a one-time gain on sale of non-core assets. Excluding the effect of non-recurring income and charges in both 2011 and 2010, net income attributable to equity holders for the first nine months of 2011 would have been $92.3 million, 50 percent higher than the $61.6 million in the same period in 2010.

In 2011, ICTSI sold its 16.79 percent ownership stake in Portek International Limited of Singapore (PORT:SP) and booked a one-time equity tax charge imposed by the Colombian tax authorities on all legal entities and individuals in Colombia.
In 2010, on the other hand, ICTSI sold its 9.54 percent ownership stake in Subic Shipyard and Engineering, Inc. and 8.56 percent ownership stake in Consort Land, Inc. and wrote down the carrying value of certain property assets related to the company's greenfield project in Buenaventura, Colombia.

For the quarter ending Sept. 30, 2011, revenue from port operations was 29 percent higher at $166.37 million from $129.36 million in 2010. EBITDA increased 13 percent, from $61.77 million to $69.62 million, and net income attributable to equity holders grew 35 percent, from $29.73 million to $40 million.

The third quarter net income attributable to equity holders included non-recurring income and charges related to the sale of ICTSI's 16.79 percent ownership stake in Portek International Limited in 2011, and the sale of ICTSI's 9.54 percent ownership stake in Subic Shipyard and Engineering, Inc. and 8.56 percent in Consort Land, Inc and a write-down of the carrying value of certain property assets related to the company's project in Buenaventura in 2010 Removing the effect of these one-time gains and charges, net income attributable to equity holders for the period would have been $31.95 million, 55 percent higher compared to the $20.62 million for the same period in 2010.

ICTSI handled consolidated volume of 3,844,040 twenty-foot equivalent units (TEUs) in the first nine months of 2011, 25 percent more than the 3,070,246 TEUs handled in the same period in 2010. The increase in volume was mainly due to the continued upturn in international trade, particularly in markets where ICTSI's ports are located and the consolidation of the Company's new ports in Portland, Oregon, USA and Rijeka, Croatia.

Excluding the volume from the two latest port acquisitions, organic volume growth was at an impressive 19 percent. Volume from the Group's six key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar and China, which accounted for 74 percent of the Group's consolidated volume for the first nine months of 2011, increased 19 percent from 2,397,981 TEUs to 2,845,894 TEUs.

For the quarter ending Sept. 30, 2011, total TEUs handled was 28 percent higher at 1,360,063 TEUs compared to 1,060,641 TEUs in 2010.

Gross revenues from port operations for the first nine months of 2011 increased 29 percent to $475.31 million from the $368.51 million reported in the same period in 2010. The increase in revenues for the first nine months of 2011 was mainly due to the strong volume growth across all geographic segments of the Group, higher storage revenues and ancillary services, favorable volume mix, and the inclusion of the new terminals in Portland and Rijeka. Excluding the revenues from the newly acquired terminals, organic revenue growth was 22 percent. Revenue contribution from the Group's six key terminal operations in Manila, Brazil, Poland, Ecuador, Madagascar and China, which accounted for 85 percent of the Group's consolidated revenues for the first nine months of 2011, increased 22 percent from $333.67 million to $405.61 million. For the quarter ending Sept. 30, 2011, revenue was at $166.35 million, 29 percent greater than the $129.36 million generated in 2010.

Total consolidated cash operating expenses for the first nine months grew 46 percent to US$209.3 million, from US$143.5 million in the same period in 2010. The increase was mainly driven by the higher labor and contracted services, overtime, fuel and power consumption and repairs and maintenance and start-up and operating expenses of the Company's new ports in Portland and Rijeka. Excluding the cash operating expenses of the new terminals, total cash operating expenses would have increased by only 25 percent.

Consolidated EBITDA for the first nine months of 2011 surged 18 percent to $208.43 million, from $176.76 million in 2010 mainly due to the double-digit volume growth across all geographic segments of the Group and stronger revenues from storage and ancillary services. Consolidated EBITDA margin, however, declined in the first nine months of 2011 by four percentage points to 44 percent, from 48 percent in the same period in 2010 due to higher business development and start-up expenses and higher labor, equipment and facilities-related expenses. Excluding the new terminals, EBITDA margin would have only been marginally down to 47 percent.

For the first nine months of 2011, consolidated financing charges and other expenses increased four percent to $36.65 million compared to the previous year¹s $34.4 million. The increase in interest expense for the first nine months of 2011 was slightly muted by the increase in capitalized borrowing cost.

Third quarter 2011 consolidated financing charges and other expenses, on the other hand, decreased by six percent to $12.4 million compared to last year¹s $13.27 million. The reduction was primarily a result of higher capitalized borrowing costs in the third quarter of 2011, and the write-down of the carrying value of certain property assets related to the company's greenfield project in Buenaventura in the same quarter in 2010.

The effective tax rate in the first nine months of 2011 decreased by24 percent compared to 30 percent in the same period in 2010. The decrease was mainly attributable to a gain on sale of available-for-sale investments in 2011 not subject to income tax and lower operating losses at terminals with no tax benefits in the first nine months of 2011 compared to 2010.
ICTSI's capital expenditure amounted to $126.21 million in the first nine months of 2011 majority of which was spent for the civil works and major equipment at its existing terminals in Manila, Ecuador and Brazil and port development projects in Argentina and Mexico. The established capital expenditure budget for the full year of $344.84 million is mainly allocated for new projects in Argentina, Mexico and Colombia, and for civil works, systems improvement, and purchase of major cargo handling equipment at its terminal operations in Manila, Brazil and Ecuador.

The Manila International Container Terminal of ICTSI.