ICTSI sets aside $380 million for 2019 capex

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INTERNATIONAL CONTAINER Terminal Services, Inc. (ICTSI) is allotting around $380 million for capital expenditure (capex) this year, 45% lower than the $261.3 million the company spent in 2018.

In a disclosure to the stock exchange, the Razon-led port giant said the capex budget will be mainly used for “ongoing expansion projects in Manila, Mexico and Iraq; equipment acquisitions and upgrades; and for maintenance requirements.”

At the same time, ICTSI reported its net income attributable to equity holders rose 22% to $221.5 million in 2018, from $182.1 million recorded the previous year.

The company attributed the higher profit to “strong operating income from organic terminals; a decrease in the Company’s share in the net loss at Sociedad Puerto Industrial Aguadulce S.A. (SPIA)… in Buenaventura, Colombia, which decreased from $36.8 million in the year of 2017 to $23.4 million for the same period in 2018 as the company continued to ramp-up container volume; lower restructuring and separation costs; and a $2.8-million non-recurring gain from the pre-termination of interest rate swap related at its terminal in Manzanillo, Mexico in May 2018.”

However, ICTSI noted earnings growth was tempered by the increase in port lease expenses at Melbourne, a $5.8-million non-recurring impairment charge at its Davao terminal, and the termination of its sub-concession agreement in Nigeria.

“Our drive in maintaining positive volume growth organically and through (mergers and acquisitions), our focus on cost and operating efficiency, and the constructive global trade dynamics outside of the US-China ‘trade war’ combine to provide a case for cautious optimism in 2019,” ICTSI Chairman Enrique K. Razon was quoted as saying in a statement.

ICTSI gross revenues increased by 11% to $1.4 billion in 2018, on the back of its 6% volume growth to 9,736,621 twenty-foot equivalent units (TEUs) handled in 2018.

“The increase in volume was mainly due to continuous improvement in trade activities; new contracts with shipping lines and services; and the contribution of new terminals in Lae and Motukea in Papua New Guinea, and Melbourne, Australia,” the company said.

ICTSI’s operating expenses also rose 14% to $540.5 billion during the year due to increased costs from new terminals, higher fuel prices, among others. — Denise A. Valdez