“The performance of our energy-related businesses continues to illustrate the key characteristics of infrastructure – stability and growth in cash generation,” said James Hooke, chief executive officer of Macquarie Infrastructure Company. “The result produced by IMTT during the quarter, in particular, was outstanding.”
MIC has a 50% equity interest in International-Matex Tank Terminals (“IMTT”), the operator of one of the largest independent bulk liquid storage terminal businesses in the U.S. IMTT owns and operates 10 marine storage terminals in the U.S. and has interests in two terminals in Canada. The terminals store and handle a wide variety of petroleum grades, chemicals and vegetable and animal oils.
Strong demand for tankage, particularly in IMTT’s key New York Harbor and lower Mississippi River markets, helped drive terminal gross profit up by 17% and generate an increase in average storage rental rates of more than 10% year over year. The rental of 16 tanks constructed during the past year at the St. Rose facility on the lower Mississippi River also contributed to the increase.
Environmental response gross profit for the quarter increased to $3.3 million, from a loss of $807,000 in the prior comparable period. IMTT’s Oil Mop subsidiary was involved in an oil spill clean-up effort along the Texas coast in January and February of 2010.
Maintenance and environmental capital expenditures at IMTT totaled $7.8 million during the quarter. The business expects that full-year maintenance and environmental capital expenditures will be approximately $55.0 million.
IMTT is evaluating growth capital projects having an aggregate capital cost in excess of $150.0 million. Free cash flow generated by IMTT, other than $5.0 million distributed to each of its two shareholders, including MIC, in the first quarter of 2010, is being retained to fund growth capital expenditures. IMTT will proceed with these projects if development can be undertaken on economically favorable terms.
Free cash flow generated by IMTT in the first quarter of 2010 increased 53% to $33.5 million from $21.9 million in the first quarter of 2009.