International Container Terminal Services, Inc. (ICTSI) generated a 7% increase in its net income attributable to equity holders from July to September. The port operations revenues grew by 5% and this was one of the contributors to the greater performance of ICTSI this quarter. According to the company, the attributable profit reached $56.4 million in quarter three, which brought the nine-month income to $184.9 million. This was 29% higher than what it posted last year during the same period. It looks like ICTSI did great during the third quarter. What do you think of this company as an investor? Is it worth investing in?
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The profit growth this third quarter had been attributed to strong operating income contribution from the following terminals of the company in Iraq, Democratic Republic of Congo, Mexico, and Subic and Manila in the Philippines, new contracts with shipping lines and services at Victoria International Container Terminal (VICT) in Melbourne, Australia, expansion of the new terminals in Papua New Guinea, and the decrease in equity in net loss at Sociedad Puerto Industrial Aguadulce S.A (SPIA). SPIA is ICTSI’s joint venture container terminal project with PSA International Pte. Ltd. (PSA) located in Buenaventura, Colombia.
Although there was ready a net income, it could have been a 34% jump during the nine-month period if there were no counterbalancing transactions. The growth, according to ICTSI, was modulated by the acceleration of debt issue costs associated with the partial prepayment of Euro-nominated term loan in July 2019 and the non-recurring gain from the interest rate swap which can be linked to the prepayment of the project finance loan at ICTSI’s terminal operations in Manzanillo, Mexico in 2018. Every company experiences this kind of situation. It could have been a greater performance for ICSTI.
When it comes to revenue from port operations, ICTSI was able to generate $355.6 million in the third quarter or up by 3%. If we take a look at it from January to September, the revenues reached $1.1 billion or 10% higher compared to the previous year. Meanwhile, the company’s consolidated throughput went up by 5% to 2,548,175 twenty-foot equivalent units (TEUs) at the end of September. The nine-month throughput was 6% higher to 7,590,090 TEUs. The consolidated financing charges and other expenses of ICTSI stood to $92.2 million or 7% higher because of the increase in debt issue costs.