ICTSI jacks up capex by 30% to $250M

INTERNATIONAL Container Terminal Services Inc. (ICTSI) is spending $250 million in capital expenditures this year, a third larger than its actual spend in 2020, as it completes the expansion and the construction of its various ports globally.

Based on a statement attached to a disclosure, the company has decided to increase its capital spending program for 2021 by 30 percent to $250 million from its actual capital outlays of $198.7 million in 2020.

The budget will be used to complete the expansion of the Manila International Container Terminal Inc. (MICT), the yard expansion of its port in Matadi, Democratic Republic of Congo, and the new expansion project in Melbourne, Australia.

It will also be used to acquire and upgrade new equipment and for its annual maintenance requirements.

ICTSI also reported that its profits grew by a percentage point to $101.8 million in 2020 from $100.4 million the year prior thanks to the 2-percent increase in its gross revenues to $1.51 billion from $1.48 million the previous year, and the lower cash operating expenses resulting from the continuous group-wide cost reduction and optimization measures.

The port operator’s volumes were flattish in 2020 at 10.19 million twenty-foot equivalent units (TEUS) due to the pandemic’s effect on global trade and lowdown restrictions.

“We were swift to take action at the start of the pandemic to initiate cost reduction, reduce capital expenditures, and later seized opportunities to lengthen our debt maturities at lower rates,” said Enrique K. Razon, Jr., ICTSI chairman and president.

These, plus its health and safety measures, helped the company navigate through the weakened demand for terminal services in some of its ports around the world, he added.

“And as our volumes rebounded from their lows when lockdown restrictions began to lift in the second half, so did our margins reflect the benefits of these actions. Those gains have continued into the new financial year as ICTSI emerges from these trying times leaner, stronger and optimistic of the future as governments around the world begin the herculean task of global mass vaccination,” he said.