“Growth was driven by increased contributions from newer operations in Manzanillo, Mexico and Puerto Cortes, Honduras; the consolidation of terminal operations in Yantai, China; and improved performance at Subic Bay, Philippines,” Narlene Soriano, spokesperson for ICTSI said.
The volume represents an 18% increase over 2013 levels and was primarily due to three new terminals and consolidation of its operations in China. Excluding these factors, organic volume would have increased by around 2%, from ICTSI’s seven key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan.
The firm reported that annual revenues in December last year rose 24% to $1.1 billion, up from $852 million in 2013. This translated to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $443.0 million, a 17% increase n the previous year.
Operating expense rise drives need for consolidation
Despite the healthy operating profits ICTSI saw an even higher rise in expenses, driving the need for greater consolidation between its assets. Cash operating expenses in 2014 increased 26% to US$454.5 million, from US$359.5 million in 2013
“The increase was mainly driven by higher volume-related expenses (i.e., on-call labor, fuel, power and repairs and maintenance), government-mandated and contracted salary rate increases in certain terminals, increased business development activities, and cash operating expenses and start-up costs of new terminals and projects,” Soriano added.
Competitvity between shipping lines and the trend towards ever larger container vessels has also been responsible for a wave of consolidation for terminal operators, as many players carefully eye which port locations will become the next mega-hubs.
