International Container Terminal Services, Inc. · PSE:ICT
International Container Terminal Services — FY2010 Earnings Presentation
51 slides from International Container Terminal Services's earnings presentation, March 2011
Slide 1: Investor Presentation 2010 Results
Investor Presentation 2010 Results March 2011
Slide 2: Agenda
AGENDA Company and Industry Overview Recent Financial Performance Liquidity and Capital Resources Other Matters Questions and Answers Appendices
Slide 3: Company and Industry Overview
Company and Industry Overview
Slide 4: Company Overview
Company Overview Founded in 1987 to acquire the Manila International Container Terminal (MICT) from the Philippine government in a competitive privatization tender Unique strategy focused on acquiring underperforming small- and mid- sized terminals, mostly in government privatizations Highly s
Slide 5: Ownership Structure
Ownership Structure Other directors and officers, ICTSI 1.08% Warehousing, Inc., 1.16% Enrique Razon Jr., 63.63% Public (net), 34.14% Number of Issued and Outstanding = 2,635,807,860 Common and Preferred B shares Note: Based on total outstanding shares as of December 31, 2010. 5
Slide 6: Diversified Global Operations
Diversified Global Operations BCT Gdynia, Poland BICT IOI Batumi, Georgia YRDICT AGCT Portland, Oregon, USA Yantai, China Rijeka, Croatia TICT Manzanillo, Mexico NICTI Tartous, Syria Okinawa, Japan SPIA Philippines Buenaventura, Colombia NMCTS Muara, Brunei CGSA MTS Guayaquil, Ecuador TSSA Makassar,
Slide 7: Terminal Details
Terminal Details Major terminals MICT TSSA BCT MICTSL YRDICT CGSA Manila, Philippines Suape, Brazil Gdynia, Poland Toamasina, Madagascar Yantai, China Guayaquil, Ecuador 100% owned 100% owned 100% owned 100% owned 60% owned 100% owned Other terminals New terminals MTS IOI TICT BICT NMCTS AGCT Other
Slide 8: Evolution of Capacity
Evolution of Capacity Handling Capacity (in TEUs) 2004 2005 2006 2007 2008 2009 2010 2011E MICT (Philippines) 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,900,000 1,900,000 2,400,000 TSSA (Brazil) 200,000 200,000 400,000 400,000 400,000 400,000 400,000 500,000 BCT (Poland) 400,000 400,000 700
Slide 9: Global Customer Base
Global Customer Base ICTSI’s International Carrier Customers MICT TSSA BCT MICTSL CGSA Shipping Lines (Manila) (Brazil) (Poland) (Madagascar) (Ecuador) 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
Slide 10: Business Strategy
Business Strategy To develop, acquire, own and operate common user container terminals in the 50,000 – 1,500,000 TEU range in markets with superior growth and profit potential. 1 Maintain leadership position in existing markets 2 Pursue new opportunities for expansion 3 Diversify geographically 10
Slide 11: Numerous Potential Targets
Numerous Potential Targets Large number of international and government-operated ports available in ICTSI’s acquisition space, including 403 state-run ports % of No. of terminals State-owned Terminal size Total no. of total which are state % of total (TEU)1 terminals terminals owned2 terminals < 100
Slide 12: Recent Industry Consolidation
Recent Industry Consolidation Industry Transactions Buyer Target Year Geography Dubai Ports CSX 2004 Global Dubai Ports P&O 2006 Global PSA Hutchison Ports (20%) 2006 Global Financial Investor Transactions Buyer Target Year Geography Babcock & Brown PD Ports 2006 UK Goldman Sachs ABP 2006 UK Deutsch
Slide 13: Strategy Drives Yields
Strategy Drives Yields Consolidated yield / TEU (in US$) Comparison with PSA (in US$) 124 116 119 124 125 108 116 119 103 108 91 103 91 57 49 44 45 45 45 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 Full Year ICTSI PSA Source: Company information Source: PSA audited financials, U
Slide 14: Impressive Financial Performance
Impressive Financial Performance (in US$’000) Revenues EBITDA & EBITDA Margin Net income & ROE 47.0% 40.9% 42.4% 527,115 41.7% 463,118 39.9% 20% 421,651 17% 16% 18% 247,698 12% 324,933 98,276 196,437 175,652 71,258 231,303 64,226 129,675 54,911 94,402 39,031 2006 2007 2008 2009 2010 2006 2007 2008 2
Slide 15: Recent Financial Performance
Recent Financial Performance
Slide 16: 2010 Volume Up 18%
2010 Volume Up 18% Volume by port (in TEU) Volume by segment 18% 3,734,892 3,557,256 4,202,574 58% 2008 24% +13% 12% 936,441 63% 25% 622,598 2009 +18% 765,973 708,575 590,213 12% 63% 25% 130,193 624,783 186,358 143,371 141,093 2010 294,383 160,138 340,396 132,278 440,591 251,417 281,142 226,742 ¾ AS
Slide 17: 2010 Revenues 25% Higher
2010 Revenues 25% Higher Revenues by port (in US$ ’000) Average revenue yield/TEU 463,118 421,651 527,115 116 108 124 119 125 +14% 50,590 28,453 96,826 36,738 2006 2007 2008 2009 2010 81,423 +25% 10,110 5,783 27,695 35,080 92,993 6,803 95,234 63,544 29,875 ¾ Consolidated 2010 average revenue yield p
Slide 18: 2010 Consolidated P&L Highlights
2010 Consolidated P&L Highlights (in US$’000, except Volume & EPS) 2009 2010 % change Volume (in TEUs) 3,557,256 4,202,574 18% Volume up 18% due to recovery in global trade Gross Revenues from Revenue increased 25% due to higher volume 421,651 527,115 25% Port Operations across all terminals and fav
Slide 19: 2010 Normalized Net Income
2010 Normalized Net Income (in US$’000) 2008 2009 2010 Net Income Attributable to 64,226 54,911 98,276 Equity Holders % change 53% 79% Sale of ICTSI’s 9.54% ownership in Less: Gain on Sale of Investments 11,224 Subic Shipyard Engineering, Inc and 8.56% ownership in Consort Land Write-down of carryin
Slide 20: 2010 vs 2008 Consolidated P&L Highlights
2010 vs 2008 Consolidated P&L Highlights (in US$’000, except Volume & EPS) 2008 2010 % change Organic volume for 2010 increased 7% Volume (in TEUs) 3,734,892 4,202,574 13% from 2008 Gross Revenues from Revenue increased 14% versus 2008; the Port Operations 463,118 527,115 14% Company’s previous reve
Slide 21: Revenues & Net Income by Segment
Revenues & Net Income by Segment Revenues (in US$‘000) Net income (in US$’000) 462,118 421,651 527,115 64,226 54,911 98,276 31% 35% 36% 36% 42% 42% 22% 14% 12% 1% 0.13% 17% 57% 58% 47% 51% 52% 47% 2008 2009 2010 2008 2009 2010 21
Slide 22: Liquidity and Capital Resources
Liquidity and Capital Resources
Slide 23: Consolidated Balance Sheet
Consolidated Balance Sheet (in US$’000) Dec. 31, 2010 Dec. 31, 2009 Intangible and Property & Equipment, net 1,021,156 955,209 Cash and cash equivalents 345,380 125,153 Other non-current and current assets 232,251 188,133 Total Assets 1,598,788 1,268,495 Total Equity 630,234 517,353 Total Short term
Slide 24: Debt Maturity Profile
Debt Maturity Profile as of December 31, 2009 as of December 31, 2010 Raised US$450M of 10-Year Fixed Rate Bonds Refinanced US$215M of Parent loans and US$42M of YRDICT liabilities Extended maturity of debt; No substantial debt repayment due until 2020 Increased cash level to US$346M to fund
Slide 25: ICTSI US$ Bond Summary of Terms
ICTSI US$ Bond Summary of Terms Original Issue Tap Issue: US$ Senior Unsecured Notes Issue Size: US$ 250 million US$ 200 million Tenor: 10 years; bullet repayment 7.375% fixed at par; 7.0% fixed at 102.727; Yield: UST+365 bps; ROP+190 bps UST+323 bps; ROP+169 bps Rating: Not rated Fund investments i
Slide 26: Financial Ratios
Financial Ratios 2010 2009 2008 Profitability Ratios Reported EBITDA Margin 47% 42% 42% Net Profit Margin 19% 13% 14% Return on Equity 18% 12% 16% Leverage Ratios Gearing : Debt/SHE (~max 2.5x) 1.01 0.84 1.02 Debt Cover Ratio : Debt/EBITDA (~max 4x) 2.57 2.47 2.49 Liquidity Ratios Current Ratio: Cur
Slide 27: Other Matters
Other Matters
Slide 28: IOI - Portland, Oregon USA
IOI - Portland, Oregon USA ICTSI Oregon, Inc. ICTSI Oregon, Inc. is located in the Port of Portland, on the Pacific coast of the United States The concession is for 25 years or until 2035, and involves the operation of Terminal 6 Estimated capacity of 700,000 TEUs Container throughput: 2010
Slide 29: AGCT - Rijeka, Croatia
AGCT - Rijeka, Croatia Adriatic Gate Container Terminal ICTSI will own 51% of Adriatic Gate Container Terminal Adriatic Gate owns the concession for the Brajdica Container Terminal in the port of Rijeka in the northern part of the Bay of Kvarner; Croatia’s largest seaport Concession period is
Slide 30: Questions and Answers
International Container Terminal re Services, Inc. as
Slide 31: Appendices: Key Operating Terminals
Appendices Key Operating Terminals
Slide 32: MICT - Manila, Philippines
MICT - Manila, Philippines Manila International Container Terminal Annual capacity of 1.9 million TEUs. Berth 6 expansion will increase annual capacity to 2.4 million TEUs MICT has a 63% market share for international containers in the Port of Manila Exclusively handles "end destination" cargo
Slide 33: TSSA - Suape, Brazil
TSSA - Suape, Brazil Tecon Suape S.A. Annual capacity of 600,000 TEUs 3-phase development plan ¾ Take over Recife volumes ¾ Become “relay hub” for Northeast Brazil ¾ International trans-shipment Concession period until April 2031 Fixed fee of BRL 8.2M adjusted yearly based on IGPM (General I
Slide 34: BCT - Gdynia, Poland
BCT - Gdynia, Poland Baltic Container Terminal Ltd. Annual capacity of 700,000 TEUs Largest container terminal in Poland Exclusive focus on "end destination" cargo Containerization rate in Poland well below European average Concession period until May 2023 EUR20M investment commitment ov
Slide 35: MICTSL - Toamasina, Madagascar
MICTSL - Toamasina, Madagascar Madagascar International Container Terminal Services Ltd. Annual capacity of 220,000 TEUs Commenced operations in October 2005 90% market share in Madagascar container market Concession period until June 2025 Fixed fee schedule: ¾ 2005-2007 1.0M Euros ¾ 2008-
Slide 36: YRDICT - Yantai, China
YRDICT - Yantai, China Yantai Rising Dragon International Container Terminals Ltd. Annual capacity of 1,000,000 TEUs. Acquired in March 2007 a 60% stake for PhP2,439 million (US$50.5 million); 40% partners are SDIC Communications Co. and Yantai Port Group Co. Ltd. Commenced operations in April
Slide 37: CGSA - Guayaquil, Ecuador
CGSA - Guayaquil, Ecuador Contecon Guayaquil S.A. Annual capacity of 900,000 TEUs. Commenced operations on August 1, 2007 20-year concession of the Container and Multipurpose Terminal at the Port of Guayaquil Concession period until 2027, renewable for another 20 years Fixed fee of US$2.1M
Slide 38: Appendices: Terminals Under Development
Appendices Terminals Under Development
Slide 39: TECPLATA - La Plata, Argentina
TECPLATA - La Plata, Argentina TECPLATA S.A. TECPLATA will be located at the head waters of the River Santiago Este in the Port of La Plata, province of Buenos Aires Concession period is 30 years or until 2038; renewable for another 30 years Fixed rental fee schedule: ¾ First 24 months of cons
Slide 40: CMSA - Manzanillo, Mexico
CMSA - Manzanillo, Mexico Contecon Manzanillo S.A. CMSA will be located in the Port of Manzanillo, on the Pacific coast of Mexico The concession is for 34 years or until 2044, and involves the development and operation of the second specialized container terminal (ECT) Fixed annual lease fees
Slide 41: SPIA - Buenaventura, Colombia
SPIA - Buenaventura, Colombia Sociedad Puerto Industrial Aguadulce S.A. SPIA will be located in the Port of Buenaventura, on the Pacific coast of Colombia Concession period for 30 years or until 2037; renewable for another 30 years Private terminal with no concession fees; instead US$1.4M lice
Slide 42: Appendices
International Container Terminal re Services, Inc. as
Slide 43: Capitalized Borrowing Cost
Capitalized Borrowing Cost IAS 23, Borrowing Costs ¾ Requires capitalization of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. ¾ Capitalization ceases when the asset is substantially ready for its intended use ¾ Capitalized borr
Slide 44: Preferred Shares
Preferred Shares Creation of a class of voting and low par value preferred shares: Objective: To address the problem of the ceiling on foreign shareholdings restricting the active trading by foreign investors of ICTSI’s listed shares in the Philippines Key Terms ¾ 700,000,000 Preferred “B” share
Slide 45: Pro Forma Foreign Ownership Structure
Pro Forma Foreign Ownership Structure as of Nov 2, 2010 as of Nov. 2, 2010 (PRO FORMA) Issuance of 700 million Preferred “B” shares 280 million (or 10.6%) additional shares available to foreigners Foreign investors will be allowed to own all free floating common shares 45
Slide 46: 2010 Financing Charges & Other Expenses
2010 Financing Charges & Other Expenses 2009 2010 % Change Financing charges & other expenses 27,413 48,475 77% Increase primarily due to higher debt balance & higher interest cost Interest Expense on Loans/Bonds1 19,380 37,748 95% Amortization of Debt Issue Cost 2,375 1,178 -50% Higher accelerated
Slide 47: Revenue Profile By Currency
Revenue Profile By Currency Revenue Currency by Subsidiary Revenue Breakdown by Currency Subsidiaries USD/EUR Local Currency MICT 42% USD 58% PHP BCT 58% USD 42% PLN TSSA 100% BRL MICTSL 100% EUR PTMTS 100% IDR YRDICTL 100% RMB CGSA 100% USD BICTL 100% USD TICT 100% USD SPIA*** 100% USD NICTI 100% J
Slide 48: Key Volume Drivers
Key Volume Drivers Consumer Goods, Electronics (raw materials) Electronic components, Commodities MICT (Philippines) Construction Material Furniture, Housing Fixtures, Paper Paper, Agriculture (wheat flour, rice, meat), Refractory Aluminum, Steel, Cement, Consumer Goods TSSA (Brazil) Material, Heavy
Slide 49: 2010 Capacity Utilization – International
2010 Capacity Utilization – International 2,000,000 85% 1,500,000 1,000,000 19% 79% 40% 500,000 85% 64% 56% 25% 11% - MICT TSSA BCT MICTSL PT MTS YRDICTL CGSA TICT BICT Volume Capacity 49
Slide 50: ICTSI Milestones
ICTSI Milestones Source: Bloomberg (ICTSI Stock Price) 50
Slide 51: International Container Terminal Services, Inc.
International | Container Terminal Services, Inc. ExCELLENCE UNCONTAINED
International Container Terminal Services — FY2010 Earnings Presentation on 6ix