August 16, 2015

International Container Terminal Services Inc (ICT)'s 2Q15 net income falls 6% YoY

In a disclosure to the Exchange, International Container Terminal Services Inc (ICT) reported 2Q15 net income attributable to holders of the parent of US$46.4m, down 6% YoY on the back of a 2% drop in revenues to US$256m. Stripping out one-off items however, 2Q15 recurring net income would have increased by 5%YoY to US$47.9m. At any rate, the 2Q15 results bring the 1H 15 net earnings to US$101.7m which is little changed from US$101.4m in 1H114.

ICT’s total volume grew 5%YoY in the second quarter to 1.9m TEUs due to the continuous growth and ramp up in the port of Mexico as well as contribution from the Port of Iraq. Revenues however, declined 2% despite the increase in volume due to lower storage revenues, discontinued vessel calls of two major shipping lines at ICTSI Oregon and the significant depreciation of the Brazilian Reais(BRL) and the Euro(EUR).

Operating expenses likewise fell 5% due to the depreciation of the BRL and the EUR as well as lower variable costs in the port of Oregon and lower fuel costs. This led to a 100bps increase in EBITDA margins to 43% from 42% in the same period last year. EBITDA for 2Q15 stood at US$110m +1% versus the same period last year.

Our take: Notwithstanding the weak 2Q15 results, ICT’s 1H15 net income already accounts for 55.6% of the full-year consensus forecast. However, we note that ICT also generated 55.7% of its full-year net income in 1H14. – WealthSec