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Investors cash in on ICTSI as Russia-Ukraine war, China lockdowns to weigh on operations

By Lourdes O. Pilar, Researcher

INVESTORS took profit on International Container Terminal Services, Inc. (ICTSI) last week following the risks posed by Russia’s invasion of Ukraine as well as the renewed lockdowns in China to its performance this year.

Data from the Philippine Stock Exchange (PSE) showed a total of 5.08 million ICTSI shares worth P1.15 billion exchanged hands from April 18 to 22, making it the eighth most actively traded stock last week.

The share price of the Enrique K. Razon, Jr.-led port operator finished at P225.00 apiece on Friday, up by 2.1% from a week ago. The stock has increased 15.4% since the start of the year.

“ICTSI felt the impact of the war starting February of this year, but they don’t have any business in Ukraine or Russia,” Mercantile Securities Corp. Analyst Jeff Radley C. See said in a Viber message.

“Similar to the pandemic, the war will bring congestions in many terminals around the world,” he added.

Although ICTSI does not have port operation in Ukraine or Russia, “its port operation could still be affected by trade disruptions and rising commodity prices,” COL Financial Group, Inc. Research Analyst Adrian Alexander N. Yu in an e-mail.

Meanwhile, Regina Capital Development Corp. Equity Analyst Arielle Anne D. Santos said the renewed lockdowns in China placed heavyweight issues like ICTSI into the spotlight last week. 

“My thinking is that the market expects that the operations of ICTSI will be affected by such mobility restrictions, causing the stock to become volatile. Others used this volatility as an opportunity to make quick profits on the stock,” she said in an e-mail interview.

Mr. Razon said during the ICTSI’s annual stockholders’ meeting last week that he is confident regarding the company’s outlook but noted the impact of China’s renewed lockdown policy to contain the surge of coronavirus disease 2019 (COVID-19).

He also noted that they are about to start seeing the effects of Russia-Ukraine war, which started in late February that sent oil benchmarks surging past $100 a barrel for the first time in many years.

In a Bloomberg report, Shanghai’s lockdown has caused congestion at the world’s largest port, with queues of vessels building there and at other stops handling diverted shipments.

A shortage of port workers in Shanghai is slowing the delivery of documentation needed for ships to unload cargoes, according to ship owners and traders.

ICTSI’s gross revenues rose by almost a fourth to $1.93 billion last year from $1.55 billion in 2020.

Meanwhile, its attributable net income jumped more than fourfold to $428.57 million last year from $101.76 million previously.

For this year, it has budgeted approximately $330 million in capital expenditures, the bulk of which will be used for expansion projects and 13% for maintenance.

There will be overall risk aversion globally toward equities, but ICTSI will be relatively more defensive due to the diversified nature of its operation, said Mr. Yu.

“We project revenues to grow by 4% in 2022, as throughout is expected to continue to grow despite the Russia-Ukraine crisis. Meanwhile, we project earnings per share to grow by 15% for 2022 brought about by higher EBITDA (earnings before interest, taxes, depreciation, and amortization) margins,” said Mr. Yu.

Ms. Santos noted that Europe, Middle East, and Africa segments, which contribute 23% on average to ICTSI’s top line, are expected to be affected with the ongoing war between Russia and Ukraine.

“Factoring in the influence of the war in Ukraine, the mentioned segments would probably contribute in the mid- to high teens, but not anywhere close/lower to 10%,” she said.

“For this year, we expect ICTSI’s topline to post double-digit growth, roughly around 15% year on year,” Ms. Santos added.

Ms. Santos expects it to become range-bound again next week as it failed to close above its resistance at P225 on Friday.

She gave ICTSI a support of P220.00 per share and a resistance of P225.00 per share this week.

Mr. Yu, for his part, sees ICTSI to trade this week with support and resistance levels at P215 and P230, respectively.

Ms. See expects the company to trade sideways this week, with support levels at P220.40 and P210.60 and resistance levels at P230 and P236.60. — with inputs from Bloomberg

All-new Toyota Veloz set for April 29 launch

PHOTO FROM TOYOTA THAILAND AND A ‘VELOCITY’ SOURCE

TOYOTA MOTOR Philippines (TMP) has confirmed that it will bring in the Veloz, a spirit sibling of the Avanza MPV (whose all-new version was launched here last March) but is positioned as a subcompact SUV.

The vehicle will be officially unveiled via a livestreamed event on April 29, 11 a.m., through the Toyota Motor Philippines Facebook and YouTube accounts. There will also be a physical display of the Veloz at the BGC Amphitheater from April 29 to May 1, where people may join “experience activities,” said TMP in a statement. Dealerships will also be displaying the model from that date.

“The upcoming introduction of the all-new Veloz marks another milestone for Toyota in the Philippines,” said TMP First Vice-President for Vehicle Sales Operations Sherwin Chualim. “Previously known as the top-grade variant of the Avanza compact MPV range, the Veloz has evolved to become a new standalone brand ready to claim its position as a subcompact SUV of choice for customers seeking new adventures.” Dealerships started taking reservations last April 23.

TMP’s release provided scant information outside of saying that pricing of the Veloz will start at P1.185 million. However, a reliable source shared with “Velocity” that there will be two trims of the model: 1.5 G CVT (which takes the aforementioned tag) and 1.5 V CVT (priced at P1.225 million). The Veloz will be available in four colors: Platinum White Pearl Mica (plus P15,000), Purplish Silver Mica Metallic, Black Metallic, and Dark Red Mica Metallic.

The all-new seven-seater Veloz stretches 4,475mm, is 1,775-mm wide, and stands 1,700mm; it clears the ground by 190mm. Compare this to the Avanza, which measures 4,395mm, is 1,730-mm wide, and assumes the same height.

Powering the Veloz is the Avanza’s familiar 1.5-liter mill, the 2NR-VE — a four-cylinder, inline, 16-valve DOHC with VVTi. Output numbers are the same: 106ps and 138Nm, coursed to the front wheels. Speaking of which, the vehicle gets 17-inch alloys fitted with 205/50 tires (the top-spec Avanza gets 195/60R16s).

More significantly, the higher variant of the Veloz will get Toyota Safety Sense features — particularly the pre-collision system, automatic high beam, and lane departure alert. These join the blind spot monitor, rear cross traffic alert, and the four SRS air bags standard only on the aforementioned range-topping Avanza G CVT.

“The Veloz basically addresses what’s lacking in the Avanza,” said our source. “Plus, it’s really sporty. It provides more value for money, for sure.” — KMA

Peso may depreciate ahead of May polls

BW FILE PHOTO

THE PESO may depreciate versus the greenback this week due to the upcoming national elections.

The local unit closed at P52.315 per dollar on Friday, gaining by five centavos from its P52.365 finish on Thursday, based on Bankers Association of the Philippines data.

However, it weakened by 28.5 centavos from its P52.03 close on April 13.

The peso’s weakest showing on Friday was at P52.45 versus the dollar, while its intraday best was at P52.215 against the greenback.

Dollars exchanged dropped to $1.283 billion on Friday from $1.344 billion on Thursday.

The decline in global oil prices boosted the peso on Friday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Reuters reported that oil prices dropped by nearly 5% on Friday from their levels a week earlier, with the market pricing in prospects of slower global growth, higher interest rates, as well as the impact of the lockdowns in China to demand.

Price of Brent crude dropped by 1.6% or $1.68 to $106.65 a barrel on Friday, while the US West Texas Intermediate crude decreased by $1.72 or 1.7% to $102.07.

The International Monetary Fund on Tuesday slashed its global growth forecast for this year by 0.8 percentage point to 3.6% as it factored in the impact of the war between Russia and Ukraine while economies have yet to fully recover from the pandemic.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the market also factored in hawkish signals from the US Federal Reserve ahead of its May 3-4 policy review.

San Francisco Federal Reserve President Mary Daly on Wednesday said she is backing a broad consensus to increase interest rates to about 2.5% by the end of 2022, Reuters reported.

“Once accommodation is removed, we need to evaluate the effects — observe how financial conditions adjust, how much inflation recedes, and what more remains to be done to ensure a sustained expansion,” Ms. Daly said.

The Fed hiked rates by a quarter percentage point in its March review to start its tightening cycle to quell surging inflation.

For this week, Mr. Asuncion said the peso may continue to weaken versus the greenback due to uncertainties usually associated with election cycles.

Meanwhile, Mr. Ricafort said the next two weeks leading to the polls could lead to increased election-related spending that could partly be financed by funds from abroad.

Former Senator Ferdinand R. Marcos, Jr., the son of the late dictator, is still the survey frontrunner for the presidential elections. His closest rival in the race, Vice-President Leonor G. Robredo, seems to be the market’s preference, based on a Bloomberg poll of analysts and investors.

The market will also continue to watch the unfolding events on the war in Ukraine, Mr. Asuncion said, noting this could lead to safe-haven demand for the dollar.

Russian news agencies reported that Moscow is eyeing to take full control of Donbas and the southern part of Ukraine during the second phase of what it calls a “special military operation.” The war has dragged on for two months, with both sides still not backing down. — Luz Wendy T. Noble with Reuters and Bloomberg

Dairy giant Arla wants to pay farmers more for low-emission milk

REUTERS

DAIRY GIANT Arla Foods is willing to pay European farmers extra for milk based on how many carbon-reducing activities they can tick off a company list.

The reward program would cover about 20 variables, such as using natural additives in feed to cut methane emissions by cows or following precision farming techniques, Chief Executive Officer Peder Tuborgh said in an interview. The bonus amounts still need to be determined, and the plan could be implemented as soon as next year.

The incentives, which are still being hashed out, are meant to help the Denmark-based cooperative achieve its target of reducing farm-level emissions by 30% this decade. The agriculture industry is being pushed to become greener, and Arla has committed to using fossil-free trucks, renewable sources of electricity and low-energy operations at its sites.

“The more activities you do that reduce the climate impact, the better the milk price you get from us,” Mr. Tuborgh said. “We know it will make a huge difference to the farmers if they are financially motivated to do the right thing.”

The Nordic region’s biggest dairy company also is researching how to remove carbon from the atmosphere using plantings and how to make energy production greener by converting manure into biogas or installing solar panels. Those actions could be included in the upcoming milk-price model.

The closely-held producer’s brands include Castello cheese, Lurpak butter and Cocio chocolate milk. It reported revenue of 11.2 billion euros ($12.1 billion) last year, an increase of 6% from 2020.

Arla raised milk prices in April, saying inflation was adding pressure on farmers wanting to invest in animal welfare and sustainability initiatives.

Almost 9,000 producers in Arla’s European network already receive one extra euro cent per liter (34 ounces) of milk in exchange for allowing annual checks of their climate-related practices. Those reviews ask 200-plus questions about herds, feed, crop production, fertilizer use, manure handling, electricity and fuel. The answers are put into a social network-like database, launched in 2020, so farmers can compare their performance.

“They can benchmark themselves up against other farms and see where they are and how they can improve,” Mr. Tuborgh said. That competition is prompting many farmers to adopt practices that not only reduce carbon-dioxide emissions but also improve efficiency, he said. Using 2015 as a baseline, the company has cut emissions from its own production processes and from its energy usage by almost a quarter, according to its annual report for 2021.

Arla’s producers emit about half the amount of carbon dioxide (CO2)-equivalent per kilogram of milk than the global average, the company said. And Mr. Tuborgh believes those emissions can be reduced even more. “We may even end at the point where this can be CO2-neutral,” he said. — Bloomberg

General Wholesale Price Index in the Philippines

GROWTH in wholesale prices for general goods in January was 4.6%, the highest since late 2011, according to preliminary data released by the Philippine Statistics Authority (PSA). Read the full story.

General Wholesale Price Index in the Philippines

How PSEi member stocks performed — April 22, 2022

Here’s a quick glance at how PSEi stocks fared on Friday, April 22, 2022.

Philippines lags in green economy list

The Philippines ranked 105th out of 160 nations globally in the 2022 edition of US
consultancy firm Dual Citizen LLC’s Global Green Economy Index (GGEI), which
assessed a nation’s performance in climate change, sector decarbonization, green
markets, and the environment. In a percentile score ranging from 0 (worst) to 1
(best), the country scored an aggregate GGEI result of 0.465. Among the nine
Southeast Asian countries included in the index, the Philippines placed sixth,
ahead only of Myanmar, Malaysia, and Indonesia.

Philippines lags in green economy list

Jayson Tatum, Celtics take 3-0 series lead over Brooklyn Nets

JAYSON Tatum scored 39 points as the Boston Celtics led most of the way and beat the Brooklyn Nets 109-103 on Saturday night in New York to open a commanding three-games-to-none lead in their Eastern Conference first-round series.

Tatum made 13 of 29 shots for his second 30-plus-point game of the series, putting the second-seeded Celtics on the verge of sweeping the seventh-seeded Nets in Game 4 on Monday. Tatum, who scored 14 points on 5-of-8 shooting in the fourth quarter, also finished with six assists and six of Boston’s 13 steals.

Jaylen Brown added 23 points on 9-of-16 shooting as the Celtics led for the final 39:58. Marcus Smart added 14 points as the Celtics shot 50% for the game and heard loud “Let’s Go Celtics” chants in the final minutes.

Bruce Brown led the Nets with 26 points, but superstars Kevin Durant and Kyrie Irving were held to a combined 32 points as the Nets shot 50.6% but also allowed 37 points off 21 turnovers.

Durant and Irving each scored 16 points. Irving made only 6 of 17 shots from the field and missed all seven of his 3-point tries.

Brooklyn remained within striking distance early in the fourth before Boston began pulling away. The Nets got the lead down to 88-84 on a 3-pointer by Blake Griffin with 7:42 remaining. — Reuters

Man City keeps up pace in title race; Arsenal goes fourth

LONDON — Manchester City opened up a four-point lead in the Premier League title race by thrashing Watford 5-1 and Arsenal seized the initiative in the battle for fourth spot on Saturday.

Brazilian Gabriel Jesus scored four goals as City applied pressure on chasing Liverpool ahead of their Merseyside derby on Sunday against struggling Everton.

Watford, meanwhile, suffered a fourth successive league defeat as their hopes of staying up receded.

Arsenal followed up their midweek win at Chelsea with a 3-1 home defeat of Manchester United to move into fourth place, ahead of Tottenham Hotspur who could only draw 0-0 away to Brentford in the day’s late kickoff.

Nuno Tavares struck early for Arsenal with Bukayo Saka doubling their lead from the penalty spot.

A sluggish United finally woke up with Cristiano Ronaldo sweeping in Nemanja Matic’s cross and they squandered a chance to level when Bruno Fernandes hit the post from the penalty spot before Granit Xhaka made sure of the points for the hosts with a 70th-minute thunderbolt.

“It’s a big performance in a game that had everything. We created chances, we had to suffer, there were moments when we lacked energy and they were on top, we were efficient in the boxes, we had luck,” Arsenal boss Mikel Arteta said.

“This is going to be a rollercoaster — today it went in our favor.”

The win took Arsenal into fourth spot, two points above Tottenham Hotspur who was lackluster in a stalemate at Brentford for whom Ivan Toney was twice denied by the woodwork.

Sixth-placed Manchester United, who announced earlier this week that Erik ten Hag would become their new manager, suffered a fourth successive away defeat in the league and their chances of qualifying for the Champions League are dwindling.

“For me, even before the game it wasn’t very likely, but after today’s result it’s gone, yes,” interim boss Ralf Rangnick, who faces a tough task in his final four games, said.

The title race is predicted to go right down to the wire and Man City made sure they retained the slight edge as they swept Watford aside at The Etihad Stadium.

Jesus struck twice in the opening 24 minutes to put City in control but Watford briefly threatened to make a game of it as French defender Hassane Kamara halved the deficit.

A stunning strike from Spain international Rodri restored City’s two-goal advantage in the 34th minute before Jesus completed his first Premier League hat trick early in the second half after converting from the penalty spot.

The 25-year-old tapped home his fourth in the 53rd minute from Kevin De Bruyne’s pass to complete the rout and City took their foot off the gas ahead of Tuesday’s Champions League semifinal first-leg against Real Madrid.

City has 80 points from 33 matches with Liverpool on 76 having played a game less. Watford are in 19th place, seven points from the safety zone.

“We have one month of the season to go, we need players like Gabriel,” City manager Pep Guardiola said.

Time is running out for bottom club Norwich City who look destined for a quick return to the second-tier Championship after a 3-0 home defeat by in-form Newcastle United.

Newcastle’s Brazilian contingent fired Eddie Howe’s side up to ninth place with Joelinton scoring a brace and Bruno Guimaraes also on target at Carrow Road.

While Newcastle is on the up and up, Norwich is now eight points from safety with five matches left to play. — Reuters

PSG clinches record title, but faces rocky off-season after European debacle

PARIS — Paris Saint-Germain (PSG) has clinched a record-equaling 10th French title, but the achievement will do little to soothe the pain of yet another embarrassing exit from the Champions League as the club face a rocky off-season.

PSG secured the Ligue 1 title with four games to spare but has already been knocked out of the French Cup and were eliminated by Real Madrid in the last 16 of Europe’s major competition after squandering a 2-0 aggregate lead in just over 15 minutes at the Bernabeu.

The failure leaves Argentine coach Mauricio Pochettino, who has been unable to give the team a proper playing style since he took charge 16 months ago, on the brink of an early exit, too.

After wasting a four-goal lead against Barcelona in 2017 and a two-goal away advantage against Manchester United in 2019, PSG reached the final in 2020 and the last four in 2021, but this season will remain as one of their most disappointing in the Qatari era.

Whether the club owners, Qatar Sport Investment, who have spent well over one billion euros on transfers in 11 years, will allow Pochettino to stay until his contract expires in June 2023 is anyone’s guess.

On the domestic front, their financial power has helped PSG to once again crush the opposition and they have so far scored goals, 22 of them through Kylian Mbappé.

The France forward was one of the rare players to live up to his reputation after saying he wanted to leave last summer.

Club president Nasser Al Khelaifi and sporting director Leonardo did not let him go — their best decision amid a number of questionable moves.

Lionel Messi, who joined amid much fanfare as a free agent from Barcelona, has not delivered, scoring only four goals in Ligue 1 in 22 appearances.

The Argentine delivered 13 assists, though, but the attacking trio he formed with Mbappé and Neymar clicked only deep into the season, and after the Champions League exit.

Keeper Gianluigi Donnarumma joined from AC Milan after guiding Italy to the European title, but he has had to share his place between the posts with the experienced Keylor Navas — a situation that seemed to prevent both of them performing at their best level.

“I have a very good relationship with Gigi but I want to play every game, it’s a complicated situation,” Navas said last weekend.

“I’m happy in Paris, but somehow, it has to change.”

Center back Sergio Ramos was also announced as a major recruit but was injured for most of the season and featured in only nine league matches.

The biggest challenge for PSG’s management will, however, be to convince Mbappé to extend his stay at the club.

“You must adapt to every circumstance and personal situation involving players with regard to their club and contracts. On a selfish level, I’d like to keep him. And take him on a holiday with me, take him home,” Pochettino told reporters.

“We would like him to renew and stay. That’s very obvious. It would be important for him to stay, but these decisions come down to the player, club and different parties.”

Leonardo said: “There are always discussions with Kylian. He is in a period of reflection. He could be staying, it’s a possibility, and he could leave as after all his contract expires at the end of the season.”

Lagging far behind PSG, second-placed Olympique de Marseille are the favourites to clinch the other direct qualifying spot for next season’s Champions League while the battle rages on between Stade Rennais, Racing Strasbourg, Nice and Monaco to secure third spot, which would send them into the third qualifying round. — Reuters

NFL to stage first-ever Christmas Day tripleheader

The National Football League (NFL) will hold a tripleheader on Christmas Day for the first time in 2022.

NFL vice-president of broadcast planning Mike North told Buffalo’s WGR 550 this week that with Christmas falling on a Sunday this year, the league will expand its footprint on the holiday despite Christmas traditionally being the NBA’s domain.

“We’ll play one game on CBS in the afternoon, one game on Fox in the afternoon and our regular Sunday night game on NBC,” North said. “Christmas, when it falls on an NFL game day, we’ve had a lot of success there, all due respect to our friends at the NBA.”

The NFL will have 11 games on Saturday, Christmas Eve, along with its usual Thursday and Monday night games surrounding the Christmas tripleheader.

The Christmas matchups are expected to be leaked during the week of May 9 before the full schedule is released May 12.

The league scheduled two games on Christmas in 2021, when it fell on a Saturday, and played one Friday evening Christmas game in 2020.

The National Basketball Association (NBA) plays five games back to back every Christmas. — Reuters

Świątek credits balancing act for 21st straight win

WORLD number one Iga Świątek said she found the right balance between taking risks and playing aggressively in her 6-4, 6-4 win over Britain’s Emma Raducanu in Stuttgart on Friday as the Polish star celebrated her 21st victory in a row.

Świątek reached the semifinals of the WTA 500 claycourt tournament after overcoming a strong effort from US Open champion Raducanu in the quarterfinals.

“I think (it was) just about balancing the risk I was taking with some sort of games,” Swiatek after the match. “I still needed to adjust a few things and get used to the surface during the match.

“I played more solid and less risky sometimes, but on the other hand, also aggressively. So, when I balanced that act, it was pretty good.”

Świątek, 20, has not dropped a set in her last 13 matches and also leads the women’s tour with 28 wins this season.

Asked how she has managed to achieve those feats, Świątek said, “Honestly, just step by step. (I’m) not thinking about what’s happened and what’s going to happen. I’m just focusing on the next match.

“I am doing everything well to prepare and recover after each round. It’s huge work, honestly, (from) me and my team. It looks like I am going with the flow but behind it, it is hard work.”

Świątek, who won the French Open in 2020, will meet Liudmila Samsonova in the final four. — Reuters

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