INTERNATIONAL Container Terminal Services, Inc. (ICTSI) has slashed its capital expenditure (capex) budget for this year by 40.7% to about $160 million as the coronavirus pandemic continues to hamper global trade.
“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,” ICTSI Chairman and President Enrique K. Razon, Jr. said during the company’s annual stockholders’ meeting on Thursday.
“We have also drastically cut our operating cost budget by 11% across the board with further cuts planned,” he added.
Mr. Razon said the company saw the “severe impact” of the pandemic on the global trade flows starting from China in February and cascading to all by the end of March. “At this juncture, we still do not see the end in sight.”
“But I can tell you that the impact has not been as severe as we ourselves expected, proving once again the tremendous resilience of our business,” he added.
Despite the pandemic, ICTSI is still on the lookout for new opportunities to expand its portfolio, Mr. Razon said.
He said the company remains “very active in seeking out potential acquisitions or new projects whose potential or valuation makes sense in this environment.”
In the first quarter, ICTSI saw its net income attributable to equity holders drop by 18% to $59.6 million due to lower operating income, increase in concession interest, and pandemic-related expenses.
The net income decrease was partially tapered by the 10% decrease in equity in net loss of its joint ventures and an associate to $5.5 million from $6.1 million for the same quarter in 2019.
The global port developer and operator saw its gross revenues from port operations fell by 2% to $375.8 million in the January-March period from $383.8 million in the same quarter last year, dragged down by lockdowns and decline in trade activities, no thanks to the pandemic, as well as lower revenues from storage.
“Given the great uncertainty of many economies and the global economy itself, we have shored up our balance sheet, and we will continue to seize every opportunity to further strengthen our finances going forward,” Mr. Razon said.
On Thursday, shares in ICTSI went down 2.04% to close at P101 apiece. — Arjay L. Balinbin