Global port operator International Container Terminal Services, Inc. (ICTSI) reported a net income of US$68.8 billion in the first quarter of 2020, 16% lower than the $81.5 billion earned in the same period last year, as lockdowns in various countries to prevent the spread of the coronavirus disease (COVID-19) hit trade activities.
Gross revenues from port operations for January to March 2020 decreased by 2% to $375.8 million from $383.8 million posted year-on-year. The drop was attributed to a decline in trade activities due to the impact of COVID-19 pandemic and lockdown restrictions; lower revenues from storage; partially tapered contribution of the new terminal in Rio de Janeiro, Brazil; tariff adjustments and new services at certain terminals.
Excluding the contribution of ICTSI Rio, consolidated organic gross revenues would have decreased by 5% in the first quarter of 2020.
“This pandemic is having, and will continue to have, devastating effects on our societies and it will take a significant amount of combined effort from organizations, governments and individuals to bring back some degree of normality,” ICTSI chairman and president Enrique K. Razon, Jr. said in a statement.
“The effect of the virus was felt in the latter part of the first quarter and our volumes compared to the previous year were largely flat. Regions are at different stages of the viral outbreak which is reflected in our portfolio performance; Asia delivered lower volumes compared to previous year while EMEA (Europe, Middle East, Africa) and America segments both still registered positive volume growth for the quarter. However, the latter two regions showed signs of weakness in March,” Razon explained.
Razon said ICTSI has taken measures, which include reducing its cost base and capital expenditure, while seeking ways to increase market share in certain markets.
“We continue to monitor the situation carefully so we can adapt our responses. ICTSI is an agile business and able to act swiftly to ensure the business remains robust during these uncertain times,” he noted.
For the first quarter of the year, ICTSI handled consolidated volume of 2.509 million twenty-foot equivalent units (TEUs), 1% more than the 2.479 million TEUs handled in the same period in 2019.
The slight increase in volume was primarily due to the contribution of a new terminal in Rio de Janeiro in Brazil and new services at certain terminals, tapered by decline in trade activities due to the impact of COVID-19 on global trade.
Without the contribution of ICTSI Rio, consolidated organic volume would have decreased by 1% in the first quarter of 2020.
Capital expenditures, excluding capitalized borrowing costs, amounted to $59.7 million for the first quarter of 2020.
The capital expenditures for the first three months of 2020 were mainly for ongoing expansions at Manila International Container Terminal in the Philippines; Contecon Manzanillo S.A. in Mexico; and ICTSI DR Congo in Matadi, Democratic Republic of Congo.
Amid the COVID-19 pandemic, the group has reduced its capital expenditure plan for the rest of the year to approximately $100 million, which will be utilized mainly to complete the ongoing expansion projects.
ICTSI is involved in 31 terminal concessions and port development projects in 18 countries worldwide.