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ICTSI draws investors after finishing Manila terminal expansion

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INVESTORS loaded up on shares of International Container Terminal Services, Inc. (ICTSI) last week after it completed its Manila container terminal expansion project.

Data from the Philippine Stock Exchange (PSE) showed a total of 7.04 million shares worth P8.98 million exchanged hands from Jan. 18 to 22, making it the fifteenth most actively traded stock last week.

The share price of the Razon-led port operator closed at P128.50 on Friday, up by 1.3% from a week ago. Year to date, the stock has gained two percent.

“ICTSI moved notably higher through the week as it exhibited relative strength over the PSEi,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail, referring to the bellwether PSE index.

Mr. Mercado noted that the pickup of trading volume from last Wednesday to Friday was likely driven by news on the completion of the Manila International Container Terminal (MICT) capacity expansion project as well as the ICTSI’s Colombia terminal hitting one million twenty-foot equivalent unit (TEU) milestone.

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“The stock, however, failed to sustain the rally on Thursday (wherein it attempted to breach the P130 resistance) — but this is likely more attributable to broad market weakness,” Mr. Mercado added.

The completion of the berth expansion at the MICT is already priced into the ICTSI stock, according to AAA Southeast Equities, Inc. Research Head Christopher John Mangun.

“Although the expansion will help ease congestion once import volumes pick up, investors are still more focused on actual volumes, which are still slightly lower compared to 2019,” he said in an e-mail.

ICTSI last Tuesday said it had completed a berth expansion project at the MICT, which increased the terminal’s annual capacity by a tenth to 3.3 million TEUs.

It added another 150 meters to the Berth 7 of the MICT that created a 600-meter contiguous berth together with the adjacent Berth 6 to fit in more than 8,000 TEU capacity vessels.

This expansion was complemented by the extension of the container yard by another 5.5 hectares, raising the terminal’s added capacity of an estimated 200,000 TEUs for laden containers and 150,000 TEUs for empties.

ICTSI’s revenue was lower by 0.9% year on year to $1.13 billion in the nine months to September, while its attributable net income edged down by 1.2% to $182.61 million during the same period.

It is involved in 32 terminal concessions and port development projects in 19 countries worldwide.

“We are expecting revenues for the fourth quarter to be slightly lower than the year before, but because of cost preservation measures that the company took, net income may still see growth year on year, similar to what has happened in the first nine months of 2020,” Mr. Mangun said.

He projects ICTSI’s fourth-quarter earnings in 2020 at $65 million to $70 million and a full-year net income at around $245 million to $250 million.

Going forward, Mr. Mangun expects the stock to recover all its losses from last year and move toward P130 as volumes pick up.

He placed the support between P120 and P125 with resistance at P130 to P135.

“For this week, ICTSI may attempt another breakout off the P130 resistance. In case this doesn’t materialize, then we see the issue trading between P125 to P130,” Mr. Mercado said. — Michelle Anne P. Soliman

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