International Container Terminal Services Inc. (ICTSI) continues to actively seek investment opportunities in the country and overseas despite the impact of the US-China trade war on the global economy.
Christian Gonzales, ICTSI senior vice president and global corporate head, said on the sidelines of the Innovation Forum in Makati last week the trade war has no direct impact on the company’s port operation but on the confidence in the global economy.
“Our portfolio is made predominantly of what you call gateway port, import-export. Many of these countries are outside that China-US supply chain, so the impact has come more from confidence on the global economy as opposed to direct trade impact for those particular countries, like the Philippines. We’re still moving along, still growing,” Gonzales said.
While the trade war continues, businesses around the world hold off investments and other economic activities, but this presents business opportunities for ICTSI.
“We will spend very prudently but we will continue very active looking for projects. When there’s little confidence in the global economy, it makes a lot of opportunity for us,” Gonzales said.
In the first half this year, ICTSI reported revenues from port operations of $751.8 million, up 14 percent from $661.8 million in the first six months of 2018.
Earnings before interest, taxes, depreciation and amortization rose 19 percent to $424.4 million, from $356.1 million generated in the first half of 2018.
ICTSI said net income attributable to equity holders grew 42 percent to $128.5 million from $90.2 million earned in the same period last year, mainly due to improved operating income contribution from the terminals in Iraq, Australia, Democratic Republic of Congo and Subic in the Philippines; the continuing ramp-up at the new terminals in Papua New Guinea; and a decrease in equity in net loss at Sociedad Puerto Industrial Aguadulce S.A., its joint venture container terminal project with PSA International Pte Ltd. in Buenaventura, Colombia.
The increase was partially tapered by a non-recurring gain from the interest rate swap related to the pre-payment of the project finance loan at its terminal operations in Manzanillo, Mexico in 2018.
ICTSI handled consolidated volume of 5 million twenty-foot equivalent units in the first six months of 2019, 7 percent more than the 4.7 million handled in the same period in 2018.
The increase in volume was mainly due to continuing ramp-up at ICTSI’s operations in Melbourne, Australia and Manzanillo, Mexico; improvement in trade activities in Subic, Philippines, in Matadi, Democratic Republic of Congo and in Rijeka, Croatia; new shipping lines and services in Gdynia, Poland; and the new terminals in Lae and Motukea in Papua New Guinea.
The company’s capital expenditures (capex) for the six-month period amounted to $120.5 million, approximately 32 percent of the $380 million budget for 2019.
The estimated capex budget will be utilized mainly for the ongoing expansion projects in Manila, Mexico and Iraq; equipment acquisitions and upgrades; and maintenance requirements.
ICTSI operates in 19 countries across six continents and continues to pursue container terminal opportunities around the world.