ICTSI eyes opportunities amid COVID

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International Container Terminal Services Inc. (ICSTI) has cut by 11 percent its operating cost across-the-board and is poised to reduce that further as the port operator grapples with the impact of the economic disruptions of the new coronavirus disease 2019 (COVID-19) pandemic.

Enrique K. Razon Jr., ICTSI chairman, at the company’s stockholders meeting held virtually yesterday said the company is “still keenly on the lookout for opportunities” to expand its portfolio, and is seeking potential acquisitions or new projects “whose potential or valuation makes sense in this environment.”

Razon said the pandemic’s impact on the company “has not been as severe” when compared to its effect on “global trade starting from China in February and cascading to all by the end of March.”

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But he added: “At this juncture we still do not see the end in sight.”

The company has reduced its capital expenditures to $160 million, focusing on ongoing expansion projects.

“Reacting quickly to the situation we have slashed almost all new capital expenditures to almost nothing leaving only those projects that were about to be completed and those absolutely necessary. We have cut our capex budget from the original $270 million to approximately $160 million, having already spent $60 million at the time of the pandemic. We have also drastically cut our operating cost budget by 11 percent across the board with further cuts planned,” Razon said.

ICTSI this week completed it 10-year $400 million senior notes offering, sold at a 4.750 percent coupon, payable on a semi-annual basis. It was also offered at an offer price of 99.607 percent of par value, to bring the senior notes’ yield to 4.8 percent per annum.

The notes issuance was 4.6x oversubscribed with tenders reaching over $1.8 billion.

“The global pandemic started to engulf the world in early March and one after another, countries began locking down as the virus spread throughout. By the end of March, every single country where we operate was on lockdown in one way or another,” Razon said.

“As a result, all trade whether by sea or air was impacted and travel ceased to exist.

Throughout these lockdowns, all of our ports — without exception –continued 24/7 operations being an essential and vital service,” he added.

ICTSI profit dropped 18 percent while revenue decline 2 percent

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