International Container Terminal Services, Inc. (ICTSI) reported a plunge in net income by 52% to $100.4 million. This was triggered by the non-recurring charges recorded in 2019. According to the company, its attributable net income in 2019 was indeed pulled by non-recurring charges that amounted to $158.7 million. This neutralized the 7% increase in revenues to $1.5 billion. For those who have investments in ICTSI, let’s take a look at some of the important key points about the news.
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ICTSI said that the non-recurring charges came from the impairment charges of the operation of the company related to the Tecplata S.A terminal in Buenos Aires, Argentina, which was worth $156 million. It was the outcome of lower projected cash flows from the terminal triggered by the updated business plan to resolve the prevailing and challenging economic conditions in Argentina. ICTSI faced a balance of $2.7 million impairment charges on the acceleration of the debt issue cost of the company after the partial prepayment of its euro-denominated term loan. If we will take a look at it without the non-recurring gains and losses, the company could have reported an increase in net income by 23% to $259.1 million.
According to the company, its 7% increase in revenues was driven by the 5% rise in the consolidated volume that hot 10.18 million twenty-foot equivalent units (TEUs). This was mainly because of its new terminals in Brazil and Papua New Guinea, its enhanced activities in Subic, Iraq, and Congo, and its new shipping contracts in Poland, Australia, Georgia, Croatia, and Mexico. Although its cash expenses recorded a 3% hike to $464.2 million because of the increase in volume managed, unfavorable exchange rates, and adjustments in salary rate, the revenue still made a positive impact on its yearly performance.
ICTSI told the public that it had delivered a positive performance in 2019 with increasing revenue at 7% and rising EBITDA at 10%. The firm also noted that the recent outbreak of coronavirus is currently affecting its volumes, especially its operations in the Asian region. The company assured that it is doing its best to review and develop its strategies across the regions where it operates. Although it is unsure how long will the outbreak last, it will continue to seek to mitigate the impact by controlling its cost and increasing its market share.