International Container Terminal Services Inc: 2Q26: Beat, beat again – new highs for revenue, profit, and Op-CF despite cost pressure

Research evidence excerpt

International Container Terminal Services Inc: 2Q26: Beat, beat again – new highs for revenue, profit, and Op-CF despite cost pressure

Karen Li, CFA Asia Pacific Equity Research

(852) 2800-8589 03 August 2026

karen.yy.li@jpmorgan.com

than offset by the contribution from DGT and other terminals. Excluding

DGT, EMEA volume would have decreased by 27.4% Y/Y, and revenue

by 11.4% Y/Y, underscoring the importance of recent acquisitions in

mitigating geopolitical risk. ICTSI continues to monitor the situation and

implement measures to protect staff and assets in affected regions.

• Margin pressure is a key watchpoint, as higher operating costs, fuel,

labor, and FX effects weighed on profitability despite strong revenue

growth. Cash operating expenses rose 37.9% Y/Y in 2Q26, driven by

DGT, higher labor, fuel, equipment rentals, and FX. EBITDA margin

declined to 64% (from 65.5% in 2Q25), and EBIT margin to 53.1%

(from 54.9%). ICTSI is focused on cost control, deploying fuel

surcharges, and driving efficiency gains, but acknowledges that the step-

up in costs from new terminals and macro headwinds will take time to

absorb. Excluding new and discontinued operations, EBITDA margin

would have increased to 65.8%.

• Liquidity and capital structure remain sound, with strong cash

generation offset by higher capex, dividends, and debt service. Op-

CF rose 26.5% Y/Y to US$1.02B in 1H26, but cash and cash equivalents

declined to US$855MM due to capex, dividends, and redemption of

perpetual securities. Total debt rose 6.8% to US$3.37B, with debt/equity

at 1.37x and current ratio at 1.51x. The group redeemed US$298MM in

perpetual capital securities in May 2026, further optimizing its capital

structure. Liquidity remains adequate, with 91% of long-term debt

maturing in 2028 and beyond.