ICTSI 2024 capex set at $450M

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ICTSI 2024 capex set at $450M
North Port Terminal 1. Photo courtesy of Manila North Harbour Port, Inc.
  • International Container Terminal Services, Inc. has set aside $450 million in capital expenditures this year
  • ICTSI chairman and president Enrique Razon, Jr said the group is “very actively looking” for investments in regions where they have achieved success such as Asia, Latin America, Africa, and the Middle East
  • The 2024 capex will be used mainly to complete expansion in Brazil, develop a new terminal in Indonesia, and continue expansion in Mexico, the Philippines and D.R. Congo

International Container Terminal Services, Inc. (ICTSI) has set aside about $450 million in capital expenditures this year.

“The year 2024 is ripe with opportunities,” ICTSI chairman and president Enrique Razon, Jr. said in a speech during the company’s virtual annual stockholders’ meeting on April 18.

The 2024 capex, which includes $60 million carried over from 2023, is higher than the previous year’s $336.32 million.

Razon said they will continue their strategy of expanding in regions “we are focused on to give the company the best growth opportunity.”

He added, “We intend to pursue further growth in 2024 as we employ our strategy of operating gateway terminals we have management control, in locations with favorable competitive dynamics and high growth potential.”

Razon said the group is “very actively looking” for investments in regions where they have achieved success such as Asia, Latin America, Africa, and the Middle East.

China operations are not affected by tensions between the Philippines and China over the West Philippine Sea, Razon said, noting they “deal mainly with local authorities.”

ICTSI operates the Yantai International Container Terminals Ltd.

The capex will be used mainly to complete the expansion in Brazil, development of East Java Multipurpose Terminal (EJMT) in Indonesia, and continue expansion in Mexico, the Philippines and Democratic Republic of Congo.

It will also be used to pay the last tranche of concession extension-related expenditures in Madagascar; develop the Visayas Container Terminal in Iloilo; equipment acquisitions and upgrades; and for capital maintenance requirements.

For 2023, Razon said the company “did remarkably well” despite risks to the global economy such as the war in Ukraine and new conflicts in the Middle East causing disruptions to shipping in the Red Sea and resulting in supply chain delays.

ICTSI handled a consolidated volume of 12.749 million twenty-foot equivalent units (TEUs) in 2023, 4% higher than the 12.216 million TEUs handled in 2022. The increase in volume was mainly due to the contribution of North Port in the Philippines, improvement in trade activities, and new services at certain terminals.

Gross revenues from port operations rose 6% to $2.39 billion in 2023 from $2.24 billion in 2022 mainly on account of the contribution of North Port; tariff adjustments, volume growth and higher revenues from ancillary services and general cargo business at certain terminals; and favorable translation impact at Contecon Manzanillo S.A. (CMSA) in Mexico, ICTSI Iraq, Tecon Suape S.A., and ICTSI Rio in Brazil.

RELATED READ: ICTSI 2023 net income down 14% from 2022

In July 2023, ICTSI was declared the preferred bidder for the operation and development of Durban Container Terminal (DCT) Pier 2 at the Port of Durban in South Africa.

Razon said they were recently informed they can proceed with finalizing the handover and will start operation in the middle of this year.

In September 2023, ICTSI also acquired a 60% stake in CLIA Pouso Alegre, a Customs-integrated industrial logistics center in the industrial region of Brazil, located in the state of Minas Gerais.

In October 2023, ICTSI’s new gateway, EJMT, in East Java, Indonesia, broke ground and is scheduled to be operational in September 2024.

In December 2023, ICTSI officially inaugurated the Phase 3A expansion of Victoria International Container Terminal (VICT) in Melbourne, Australia. The expansion increases the terminal’s capacity by 30% to 1.25 million TEUs.

Also last December, the terminal extension in Matadi Gateway Terminal in D.R. Congo was completed.

In August 2023, ICTSI secured a $750 million loan from Metropolitan Bank & Trust Co. to further expand port operations worldwide.

Razon said proceeds from the six-year loan facility will be used to refinance short-term obligations and fund strategic mergers and acquisitions.