2Q 2020 INVESTORS'BRIEFING AUGUST6,2020 - INTERNATIONAL CONTAINER TERMINALS ...
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2Q 2020 Investors’ Briefing August 6, 2020
COVID 19 Update
Ensuring strength and resiliency: our response to COVID-19
Areas of Focus (4Cs)
▪ Cash Preservation
o Focus on cash collection
o Accelerate and maximize upstream of cash
▪ Capital Expenditure Re-assessment
o Stringent review of groupwide capex budget
▪ Capital Structure Strength and Flexibility
o Strengthen capital structure and create flexibility to take advantage of
market opportunities
▪ Cost Control
o Rebase OPEX
2
Highlights
Financial and Operational Performance
Net income
attributable to
Volume Revenues EBITDA equity holders
-5% -4% -2% -12%
EBITDA
Margin
57%
▪ Volume and revenues lower in 1H2020 due to continuing impact of COVID19 on global trade in
2Q2020 as stricter quarantine measures took effect
▪ Less percentage decline in EBITDA compared to volume and revenues due to successful cost
optimization measures
▪ Net Income down mainly due to reduction in operating income and COVID19 related expenses
3
MoM Segment Performance
2020
Jan Feb Mar Apr May Jun
Asia
EMEA
AMERICAS
Total
Consolidated
Volume Revenues
(lowest month) (lowest month)
4
Quarterly Highlights
Geographical diversification, stringent cost management and our rapid response to the COVID19
pandemic mitigated potential adverse effects on operating results
(In US$ million except Volume,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Yield per TEU & EBITDA margin) 2018 2018 2018 2018 2019* 2019* 2019* 2019* 2020 2020
Volume (in TEU ‘000) 2,326 2,389 2,438 2,584 2,479 2,563 2,548 2,588 2,509 2,291
Gross Revenue 325 336 344 380 384 368 356 374 376 348
Yield per TEU (in US$) 140 141 141 147 155 144 140 145 150 152
Port Fees 48 48 49 57 49 46 46 46 45 40
Operating Expenses 129 137 132 142 112 120 110 123 119 104
EBITDA 148 152 162 180 223 202 200 206 212 204
EBITDA Margin 45% 45% 47% 47% 58% 55% 56% 55% 56% 59%
Net Income 44 54 56 68 72 56 56 (84) 60 54
*2019 EBITDA and Net Income include IFRS 16 adjustments
5
Agenda 01 Recent Financial Performance 02 Liquidity and Capital Resources 03 Other Matters 04 Questions and Answers 05 Appendix
01 Recent Financial Performance
Volume
First Half Second Quarter
(in TEUs) (in TEUs)
4,714,255 5,041,916 4,799,765 2,388,715 2,563,244 2,290,779
7% -11%
456,377 (18%)
384,809 (16%)
+19% -6% 427,155 (19%)
7% -5% 752,389 (29%)
750,123 (31%)
+0.3% -5% 711,602 (31%)
890,664 (18%)
772,190 (16%) 883,553 (18%)
+8% -15%
+15%
-1% 1,253,784 (52%) 1,354,478 (53%)
1,152,022 (50%)
1,498,004 (30%)
1,446,973 (31%) 1,499,549 (31%)
+4% +0.1% 2Q 2018 2Q 2019 2Q 2020
Asia Americas EMEA
+6% 2,653,248 (53%) -9%
2,495,093 (53%) 2,416,663 (50%)
▪ 1H2019 vs 1H2020 consolidated volume down 5%; Organic volume down 6%
1H 2018 1H 2019 1H 2020 ▪ Volume decrease was mainly due decline in trade activities due to the impact of
COVID-19 pandemic on global trade and lockdown restrictions
Asia Americas EMEA
8
Revenues
First Half Second Quarter
(in US$ ‘000) (in US$ ‘000)
661,764 751,785 724,261 336,384 368,001 348,485
9% -5%
14% -4%
78,753 (21%)
71,460 (21%) +10% 73,424 (21%)
-7%
154,274 (21%) 106,537 (29%)
148,344 (20%) 103,226 (31%) 101,090 (29%)
+3% -5%
+10% -4%
140,439 (21%)
+13% -5%
161,698 (48%) 182,711 (50%) 173,971 (50%)
218,552 (29%)
221,536 (31%)
+1%
204,590 (31%) +7%
2Q 2018 2Q 2019 2Q 2020
Asia Americas EMEA
-6%
+20% 378,959 (50%) 354,381(49%) Yield:TEU
316,736 (48%)
(in US$)
151
146
143 142
1H 2018 1H 2019 1H 2020 135 135 136
130 130
125 127
Asia Americas EMEA 119
▪ Consolidated revenues 4% lower in 1H2019 vs 1H2020; Organic revenues decreased 6%
▪ Consolidated 1H2020 yield to TEU at US$151
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1H 9
Consolidated P&L Highlights
(In US$ 000, except Volume and EPS) 1H 2019 1H 2020 % Change
Volume slightly decreased 5% as trade activities declined due to the impact of COVID-19 pandemic on global trade and
Volume (in TEU) 5,041,916 4,799,765 -5% lockdown restrictions; partially tapered by the contribution of ICTSI Rio, a new terminal in Rio de Janeiro in Brazil.
Organically, volume down 6%
Revenues were 4% lower as trade activities declined due to the impact of COVID-19 pandemic and lockdown
Gross Revenues from Port
Operations
751,785 724,261 -4% restrictions; partially tapered by the contribution of ICTSI Rio; and new services at certain terminals.
Organically, revenues were 6% less
Cash Opex 4% lower due to the continuous group-wide cost reduction and optimization measures and favorable
Cash Operating Expenses 232,043 222,834 -4% translation impact of BRL, AUD, MXN & PKR; partially tapered by the cost contribution of ICTSI Rio
EBITDA 2% lower mainly due to lower operating revenues, partially tapered by lower cash operating expenses
EBITDA 424,399 416,370 -2% resulting from continuous cost reduction and optimization measures, and positive contribution of ICTSI Rio.
EBITDA margin increased to 57% from 56%
EBIT 309,174 305,360 -1%
Financing Charges and Other Financing charges and other expenses increased 14% primarily due to COVID19-related expenses and the absence of
Expenses
59,623 67,677 +14% capitalized borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019
Net income attributable to equity holders down 12% due to lower operating income, increase in interest on concession
Net Income Attributable
to Equity Holders
128,470 113,379 -12% rights payable and COVID-19 related expense; partially tapered by a reduction in net loss in VICT and lower equity in
net loss in SPIA
Fully Diluted EPS 0.048 0.043 -10%
10Consolidated P&L Highlights
(In US$ 000, except Volume and EPS) 2Q 2019 2Q 2020 % Change
Volume decreased 11% as trade activities declined due to the impact of COVID-19 pandemic on global trade and
Volume (in TEU) 2,563,244 2,290,779 -11% lockdown restrictions; partially tapered by the contribution of ICTSI Rio, a new terminal in Rio de Janeiro in Brazil.
Organically, volume down 12%
Revenues were 5% lower as trade activities declined due to the impact of COVID-19 pandemic and lockdown
Gross Revenues from Port
Operations
368,001 348,485 -5% restrictions; partially tapered by the contribution of ICTSI Rio; higher revenues from ancillary services, and new services
at certain terminals. Organically, revenues were 8% less
Cash Opex 14% lower due to the decline in volume and continuous group-wide cost reduction and optimization
Cash Operating Expenses 120,015 103,793 -14% measures and favorable translation impact of BRL, AUD, MXN & PKR; tapered by mandated and contracted salary rate
adjustments at certain terminals and the cost contribution of ICTSI Rio
EBITDA 1% higher mainly due to lower cash operating expenses resulting from continuous group-wide cost reduction
EBITDA 201,856 204,218 +1% and optimization measures and positive contribution of ICTSI Rio. EBITDA margin increased to 59% from 55%
EBIT 144,023 148,938 +3%
Financing Charges and Other Financing charges and other expenses increased 10% primarily due to COVID19-related expenses and the absence of
Expenses
31,301 34,496 +10% capitalized borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019
Net Income Attributable Net income attributable to equity holders down 4% due to increase in interest on concession rights payable and COVID-
to Equity Holders
56,067 53,782 -4% 19 related expense; partially tapered by lower equity in net loss in SPIA
Fully Diluted EPS 0.020 0.020 -
11Financing Charges & Other Expenses
1H 2019 1H 2020 % Change
(In US$’ 000)
Increased primarily due to COVID19-related expenses and the absence of capitalized
Financing Charges & Other Expenses 59,623 67,677 +14% borrowing cost related to the Phase 2 expansion project in Basra, Iraq in 2019
▪ Interest Expense on Loans/Bonds 51,090 48,151 -6%
▪ Capitalized Borrowing Cost (1,331) - -100%
▪ Amortization of Debt Issue Cost 3,980 3,820 -4%
▪ Other Expenses 5,884 15,706 +167%
Increased due to the US$300M term loan facility, US$530M short term and 18-month
Average Outstanding Debt Balance 1,712,864 1,812,554 +6% loans of ICTSI and ICTSI Global Finance B.V. tapered by the prepayment of the Euro-
loan
Average Remaining Tenor 4.8 yrs 5.7 yrs Longer tenor due to newly issued US$400M Senior Notes
Average Cost of Debt (post CIT) 4.2% p.a. 4.0% p.a.
12Proactive FX Risk Management
ICTSI’s revenue and cash expenses are favourably matched, which provides a natural currency hedge that mitigates against volatility attributable to FX movements
Revenue Currency by Subsidiary Cash Expense Currency by Subsidiary US$ Revenues from Port Operations
(1H 2020 Revenue Breakdown by Currency)
Subsidiaries USD EUR Local Currency Subsidiaries USD EUR Local Currency
MICT 38% 62% PHP MICT 29% 71% PHP
PTMTS 100% IDR PTMTS 4% 96% IDR Others
EUR 8%
YICT 100% CNY YICT 100% CNY BRL
5%
5%
OJA 73% 27% IDR OJA 18% 82% IDR MXN
PICT 80% 20% PKR PICT 24% 76% PKR 6%
Gross Revenues
USD
47%
SBITC/ISI 45% 55% PHP SBITC/ISI 25% 75% PHP AUD US$724M
7%
SCIPSI 100% PHP SCIPSI 100% PHP
Asia
Asia
DIPSSCOR 100% PHP DIPSSCOR 100% PHP PHP
22%
HIPS 100% PHP HIPS 100% PHP
MICTSI 100% PHP MICTSI 100% PHP
BIPI 100% PHP BIPI 1% 99% PHP
LGICT 11% 89% PHP LGICT 100% PHP
Expenses favourably Matching Revenues
VICT 100% AUD VICT 100% AUD (1H 2020 Revenue Breakdown by Currency)
SPICTL/MITL 100% PGK SPICTL/MITL 100% PGK
BCT 66% 10% 24% PLN BCT 7% 1% 92% PLN
MICTSL 100% MICTSL 2% 37% 62% MGA Others
EMEA
EMEA
16%
BICT 100% BICT 15% 85% GEL
IQD
AGCT 79% 21% HRK AGCT 6% 94% HRK 3% USD
MXN 39%
ICTSI Iraq 81% 19% IQD ICTSI Iraq 21% 79% IQD 7%
Cash Expenses*
US$507M
IDRC 100% IDRC 95% 5% CDF BRL
2% 7%
TSSA 100% BRL TSSA 98% BRL
AUD
CGSA 100% CGSA 100%
Americas
Americas
9%
PHP
OPC 100% OPC 49% 51% HNL 19%
CMSA 36% 64% MXN CMSA 2% 98% MXN
TECPLATA 100% TECPLATA 9% 91% ARS
Note
ICTSI RIO 49% 51% BRL ICTSI RIO 100% BRL *Total Cash Expense includes Cash Opex, Port Fees, Realized FX losses, Interest
Cost, Perp Distribution, IFRIC Interest, Other “cash” expenses and Income tax paid
13FX Movement
May-18
May-19
May-20
Aug-18
Sep-18
Nov-18
Dec-18
Aug-19
Sep-19
Nov-19
Dec-19
Feb-18
Mar-18
Feb-19
Mar-19
Feb-20
Mar-20
Jan-18
Jun-18
Jan-19
Jun-19
Jan-20
Jun-20
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
Jul-18
Jul-19
90
110
130
150
170
Currency
BRL COP MXN PKR AUD RMB EUR PHP
Average
1H 2020 4.93 3,697.33 21.66 159.78 0.66 7.04 0.91 50.64
1H 2019 3.84 3,188.99 19.15 143.43 0.71 6.79 0.89 52.22
Growth (%) 21.95% 13.75% 11.56% 10.23% 7.34% 3.53% 2.49% -3.11%
190
14Yield/TEU and EBITDA Margin
Yield/TEU Evolution
160
-3.34
2.13
150
6.55
140
150.90
145.55
130
120
Yield/TEU Organic New Terminals Forex Yield/TEU
Dec 2019 June 2020
EBITDA Margin Evolution
58%
-0.49%
0.31%
57%
1.63%
57.49%
56%
56.04%
55%
EBITDA Margin % Organic New Terminal Forex EBITDA Margin %
Dec 2019 June 2020
15Yield/TEU Analysis
(In US$ million)
2Q 2Q % 1H 1H %
2019 2020 change 2019 2020 change
2,563 2,291 -11% Volume (TEU ‘000) 5,042 4,800 -5%
368 348 -5% Revenues (US$ million) 752 724 -4%
144 152 +6% Yield/TEU (US$) 149 151 +1%
202 204 +1% EBITDA (US$ millions) 424 416 -2%
55% 59% EBITDA Margin 56% 57%
FX due to unfavorable translation impact of AUD, FX due to unfavorable translation impact of AUD,
-5 BRL, MXN, partially tapered by favorable translation
impact of PHP
-4 BRL, MXN, partially tapered by favorable
translation impact of PHP
+8 Higher mainly due to increase in ancillary services,
+2 Higher mainly due to favorable volume mix at
+13 and favorable volume mix at certain terminals and +6 certain terminals and contribution of new terminal
contribution of new terminal ICTSI Rio ICTSI Rio, partially tapered by lower ancillary
services
1602 Liquidity and Capital Resources
Balance Sheet Summary
Financial Ratios
(In US$ millions) Dec 31, 2019 June 30, 2020 Dec 31, 2019 June 30, 2020
Intangible and Property and Equipment 3,590 3,403 Gearing: Debt/SHE 1.02 1.19
Current Ratio:
Lease Assets 576 544 Current Assets/Current Liabilities
0.72 1.16
Cash and Cash Equivalents 235 297 Covenant Leverage Ratio:
Debt/EBITDA
2.10 2.18
Other Current and Non-current Assets 1,351 1,335 DSCR: EBITDA/(Interest + Scheduled
Principal Payments)
4.61 2.38
Total Assets 5,751 5,579
Debt Breakdown
Total Short-term and Long-term Debt 1,663 1,769
As of June 30, 2020
Concession Rights Payable 661 633
EUROthers
Lease Liabilities 1,189 1,108
Floating 2% 2% Subsidiary
6% AUD
11% 14%
Other Current and Non-current
Liabilities
604 585
Rate Currency Subsidiary
Total Liabilities 4,116 4,095
USD Parent
Fixed
Total Equity 1,635 1,484 85% 86%
94%
18Principal Redemption Profile
As of March 31, 2020
(US$ millions)
Perp NC21 (1)
265
Perp NC22 (3)
Perp NC24 (2)
400 394
400
375
333 280
267
77 86
26 19 5 5 3 -
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Proforma August 6, 2020
Perp NC26 (4)
Perp NC22 (3) 300
Perp NC24 (2)
400 394
Perp NC21 (1) 400 400
375
198 285
80 95
16 45 27 20 5 5 4
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Relationship Banks Bonds Perp
Notes:
(1) Callable in 2021 with rate reset and 250–bp step–up in 2021 (3) Callable in 2022
(2) Callable in 2024 with rate reset and 250–bp step–up in 2024 (4) Callable in 2026 with rate reset and 250–bp step–up in 2026
19Capital Expenditures
(In US$ millions)
2019A 2020B (ORIGINAL) 2020B (REVISED)
$1m
$25m 1% $7m
10% 3% $1m
$54m
$23m 1%
20%
14%
US$241m US$270m US$160m
$210m $136m
$215 77% 85%
m
89%
2019 CAPEX mainly for: 2020B CAPEX mainly for:
EXPANSIONARY: Manila, Honduras, Mexico & Iraq EXPANSIONARY: Manila, Mexico & DR Congo
NEW: Rio
Greenfield Expansionary Maintenance New Projects Investment (SPIA)
2003 Other Matters
ICTSI Sustainability Reports
222019 Sustainability Report
23Recent Events
ICTSI concluded the Tender Offer relating to Senior Guaranteed Perpetual Securities of Royal Capital B.V.
July ICTSI signed the concession contract to develop, operate and manage the Multi-Purpose Terminal of the Port of Kribi in Cameroon
ICTSI successfully issued a new USD300 Million senior perpetual capital securities callable in May 2026
2020
June ICTSI successfully issued US$400 Million fixed rate senior unsecured notes with a 10-year maturity
Mar ICTSI declared a regular cash dividend in the amount of Php3.31 per share which was paid on April 16, 2020
Feb South Pacific International Terminal Limited (“SPICTL”) entered into agreements with the local communities - Ahi and Labu, to each acquire a 15% stake of SPICTL
ICTSI received from the Sudanese Government a second partial repayment of the Upfront Fee in the amount of AED110,190,000 (equivalent to approximately EUR27million).
ICTSI continues productive discussions with the Ministry of Finance and Economic Planning of the Republic of the Sudan for the refund of the remaining balance of the
Upfront Fee under the terms of the Refund Bond.
Dec
ICTSI took over the facilities and started to operate Libra Terminal Rio S.A. in the port of Rio de Janeiro City, Federative Republic of Brazil after completing all conditions
precedent and required regulatory approvals.
Contecon Guayaquil, S.A. (CGSA) Concession Agreement, which was to end on July 31, 2027, was extended for approximately 19 ½ more years to December 31, 2046
Federal jury verdict in Portland, Oregon, USA rendered in favor of ICTSI Oregon Inc. with a total sum of $93,635,000 in a case it filed against the International Longshore and
Nov
Warehouse Union (ILWU) and ILWU Local 8 for unlawful labor practices
ICTSI received a letter from the Sudanese Ministry of Finance & Economic Planning confirming the remittance of EUR195.2 million as partial repayment of the EUR410
2019 million upfront fee in accordance with a refund bond, and that the balance will be repaid as soon as possible. ICTSI continues to reserve its rights under the Concession
Aug Agreement
Motukea International Terminal Limited (MITL) entered into agreements with the local Tatana and Baruni communities for the latter to acquire a 30% stake of MITL, in line with
the Terminal Operating Agreement entered by ICTSI and the PNG Ports Authority
ICTSI Americas B.V, signed a Share Purchase Agreement with Boreal Empreendimentos e Participações S.A. to acquire one hundred per cent (100%) of the shares of Libra
Jul Terminal Rio S.A. located in the port of Rio de Janeiro City, Federative Republic of Brazil. Transfer of the facilities to ICTSI expected to take place late 2019, once all
conditions precedent and required regulatory approvals have been obtained
Jun ICTSI declared preferred bidder for the concession to develop, operate and manage the Multi-Purpose Terminal of the Port of Kribi in Cameroon
Complied with the last of the Conditions Precedent (CPs) needed prior to the transfer a further 15.17% MNHPI shares to ICTSI; ICTSI's shareholdings in MNHPI has been
May
increased from 34.83% to 50%
24Concluding Remarks
▪ Safety and wellbeing of the ICTSI team and other stakeholders remains our number one priority
▪ Focused on prudent cash preservation and management
▪ Strengthened our capital structure to capitalise on opportunities
▪ Agile and able to respond swiftly to changing situations
▪ Measures taken mean we are well positioned to navigate an uncertain and challenging H2
2504 Questions and Answers
05 Appendix
COVID-related community support projects
ICTSI Foundation and Sustainable and Development Unit
Organization Beneficiaries
o Provided immunopacks to
indigent senior citizens.
Coalition of Services for the Elderly
Immunopacks contain face
masks, milk, vitamins rice and
other food items
o 1,600 Aeta families in Capas,
Project Liwanag Ph, Inc Tarlac; distributed rice,
vegetables, canned goods
Financial assistance to Foundation
partners: o 78 Parola Ecopatrols
Parola Ecopatrols and Parola Day o 11 Day Care Workers
Care Workers in Manila, Scholars o 162 scholars and coordinators
and School Coordinators, garbage o 8 garbage personnel
haulers in MICT
o Parola Brgy. 20 and Brgy.
Donation of Thermal Scanners 275 (each barangay received 5
units)
Donation of 50 sacks of rice o Parola Brgy. 20
Donation of 60 sacks of rice to
o 300 families in Delpan, Binondo
Community Organizers Multiversity
28COVID-related community support projects
ICTSI Foundation and Sustainable and Development Unit
Organization Beneficiaries
Donation of Php5M for the purchase
o City of Manila
of COVID-19 testing machines
o Residents of Parola Brgy. 20 and
Donation of 50,000 face masks
Brgy. 275 and Isla Puting Bato
o Philippine Association of Social
Workers, Inc –NCR. This donation
Donation of personal protective benefitted 14 institutions including
equipment (PPEs) all the Manila District Social
Welfare Offices and selected
hospitals.
o Parola Brgy frontliners and
families of identified COVID-19
Donation of 900 grocery packs
patients
o 700 PAROLA Toda and ASPT
TODA (tricycle operators and
Donation of 5 kilos rice each
drivers association) and MTPB
Task Force Parola
Donation to the Philippine Commission for the Urban Poor
29COVID-19: Supporting our Stakeholders
▪ Php355m to national and local government agencies,
communities, employees and port stakeholders
▪ Donated personal protective equipment, ventilators,
test kits, face masks and disinfectants to local
hospitals and stakeholders
▪ Mass rapid antibody testing of our employees
▪ Logistical support for hospitals, and mental health
support for employees for those in need of it
▪ Php100m donation to Project Ugnayan, a feeding
programme for the economically vulnerable
30Thank you!
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