ICTSI confident of prospects but wary of ‘global cycle of crises’

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ICTSI's flagship, Manila International Container Terminal. Photo from ICTSI.
  • ICTSI confident of prospects but wary of ‘global cycle of crises’
  • At the annual stockholders’ meeting, chairman and president Enrique Razon Jr says ICTSI is “only about to start seeing effects” of the Russia-Ukraine war
  • The company is “well prepared” to handle the impact of China’s recent lockdowns, Razon says

After a record year in 2021, International Container Terminal Services, Inc. (ICTSI) chairman and president Enrique Razon Jr. said the global port operator is confident of its performance going forward but is mindful of challenges brought about by recent global events.

“Just as the pandemic seems to be waning so far, new challenges emerge as war clouds engulf Europe with the Russian invasion of Ukraine. We seem to be in a global cycle of one crisis after another,” Razon said in a speech during ICTSI’s recent annual shareholders’ meeting.

He said although the war is mainly a European affair, “we can all expect to feel the impact globally in terms of the global economy, stability and security.”

He added, “We are confident of the performance of ICTSI going forward, but we are mindful of the challenges we face with these global events.”

Asked about the effects of the Russia-Ukraine war on ICTSI operations, particularly the Europe, Middle East and Africa segments, Razon said they are “only about to start seeing the effects” of the war that began with Russia’s invasion.

Razon said the war will heavily impact trade relations and activities of countries doing trade with Russia and Ukraine. He said there may be other impacts as well created by the uncertainty and changing global security order.

On recent pandemic lockdowns in China, Razon said these will also have a “rolling effect” such as congestion in many terminals around the world, similar to what happened when China imposed lockdowns at the early stages of the pandemic.

He said ICTSI is “well prepared to handle” the situation, noting that the group still performed “very well” in 2021 in spite of challenges brought about by the pandemic.

Razon noted ICTSI “had its best year ever in 2021” despite the global pandemic raging in its second full year “with cases surging at different times and lockdowns being imposed in one region or another.”

“In every metric, whether financial or operational, International Container Terminal Services Inc. set new records both with our organic and new terminals,” Razon noted.

In 2021, ICTSI handled a consolidated volume of 11.163 million twenty-foot equivalent units (TEUs), 10% more than its 10.193million TEU throughput in 2020.

Gross revenues from port operations grew 24% and consolidated earnings before interest, tax, depreciation and amortization (EBITDA) surged 30% to US$1.14 billion, the first time that the company’s EBITDA breached the $1-billion mark.

Net income attributable to equity holders also 321% to US$428.57 million, the company’s highest ever, from US$101.76 million in 2020.

For this year, ICTSI budgeted about US$330 million for capital expenditure. This will be used mainly for paying upfront fees for the concession extension at Madagascar International Container Terminal Services Ltd. in Madagascar; ongoing expansion at ICTSI–DR Congo in Matadi, Democratic Republic of Congo; expansion projects at Victoria International Container Terminal in Melbourne, Australia, and Contecon Manzanillo S.A. de C.V. in Manzanillo, Mexico, which are both operating at very high utilization levels.

Part of the capex will be used for the Berth 8 expansion project at Manila International Container Terminal in Manila; equipment acquisitions and upgrades; and various maintenance requirements.