ICTSI shares rise on port developments, earnings

RAZON-LED International Container Terminal Services, Inc. (ICTSI) was the most actively traded stock last week, with its share price rising following reports of strong earnings and developments at its Luzon terminal, which is expected to be operational by 2028.

Analysts said investor confidence remains upbeat given the company’s resiliency amidst global trade disruptions.

Data from the Philippine Stock Exchange (PSE) showed that ICTSI was the most actively traded stock from Aug. 4-8, with P4.23 billion worth of 8.77 million shares changing hands.

ICTSI shares closed at P488 apiece on Friday, higher by 7.3% from P455 on Aug. 1. The services index likewise grew by 4.6%, while the benchmark PSE index inched up by 0.5%.

Year to date, the listed port operator jumped 26.4%, outperforming the 11.2% growth in its sector and reversing the PSE’s 2.9% decline.

Andrei Jorge G. Soriano, research associate at China Bank Securities Corp., said that beyond the strong earnings results, investors remain optimistic about ICTSI due to its resilience amid global trade developments.

He also noted the company’s expansion prospects, including potential mergers and acquisitions, and an outlook for yields to stay above $200 per twenty-foot equivalent unit (TEU).

Some terminals are still anticipating upward tariff adjustments for the rest of the year, which could further uplift yields, he said in an e-mail.

Aside from its strong second-quarter results, Juan Alfonso G. Teodoro, an equity research analyst at Timson Securities, Inc., said that the market probably likes ICTSI’s steady growth in cargo volumes, its global operations, and the long-term boost expected from the Luzon terminal project.

“Being a major player in a critical industry like ports makes it attractive to both local and foreign investors, which is why it’s often one of the most actively traded stocks,” Mr. Teodoro said in a Viber message.

He added that investors see it as relatively stable even when the broader market is choppy, which draws consistent buying interest.

Jash Matthew M. Baylon, an equity analyst at The First Resources Management and Securities Corp., similarly attributed the strong price action of the listed port operator to its expansion plans and earnings performance for the first half of the year.

He said the strong volume growth from its operations may be driven by robust trade prior to the effectivity of US tariffs.

“Meanwhile, the sector indices showed better performance fueled by lower inflation, which translated to higher consumer spending and boosted business confidence, resulting in significant growth across the industry,” Mr. Baylon said in a Viber message.

For the second quarter, the global operator’s net income climbed 16% to $244.31 million from $210.67 million in the same period a year earlier.

This brought first-half net income to $483.84 million, 15% higher than the $420.55 million in the first six months of 2024.

Meanwhile, gross revenues from port operations during the April to June period rose 11.8% to $764.63 million, while for the first half, it amounted to $1.51 billion, a 14.3% increase from $1.32 billion a year earlier.

“The jump in both income and revenues mainly came from higher cargo volumes and better operational efficiency across ICTSI’s terminals,” Mr. Teodoro said.

Additionally, the company benefited from strong performance in key markets and saw contributions from new and expanded port operations. Favorable exchange rates and cost control measures likely helped boost profits, Mr. Teodoro said.

“Overall, it’s a mix of more business coming in, running operations more efficiently, and making the most out of its global network.”

He also said that ICTSI looks “financially solid” in the second half as earnings and revenues have been growing steadily and cargo volumes are on the rise, followed by projects in its pipeline.

“For the rest of the year, we’d expect them to stay profitable and possibly beat last year’s numbers if market conditions hold up. Overall, they seem on track for another strong full-year performance.”

Meanwhile, Mr. Soriano sees full-year attributable net income reaching $966 million.

Last week, reports showed that the Department of Transportation said that ICTSI’s Luzon International Container Terminal will be operational by 2028, with completion targeted by 2027.

Additionally, ICTSI said it is investing $580 million in capital expenditures, mainly for the development of the Southern Luzon Gateway in the Philippines and expansion projects at ICTSI Rio in Brazil and Mindanao Container Terminal.

“These developments bode well with respect to ICTSI’s prospects as these further support the company’s long-term profit growth story through a mix of organic and inorganic expansion,” China Bank’s Mr. Soriano said.

For Mr. Baylon, the recent development aligns with the long-term potential for the port operator.

The projected commencement of its Luzon terminal in 2028 is expected to cater to rising trade in the country, which could translate to the company’s earnings moving forward.

He added that this planned project could boost business activity in the region, supporting growth in the local economy.

Mr. Teodoro highlighted that this meant positive sentiment around ICTSI, as investors tend to like big, long-term projects because they show the company is planning for future growth.

“Pairing that with the $580-million capex announcement signals that ICTSI is serious about expanding both locally and internationally,” he added.

He said that traders and investors will be drawn to ICTSI as its steady earnings growth, strong global operations, and a track record of delivering big projects are compelling enough.

“The company also operates in a critical industry that stays in demand regardless of economic swings, which gives it some stability.”

He also noted that for traders, the stock’s active trading and price movements create short-term opportunities, while for long-term investors, it’s the mix of solid fundamentals and clear future projects that make it appealing.

He pegged support at P470 per share while resistance is around the P500 per share mark.

Meanwhile, for Mr. Baylon, trade agreements between the US and other nations will continue, which could positively affect ICTSI as its trade may not be hampered as well as port operations.

“We are considering the P450 level as the support while P500 as the psychological resistance for the stock,” he added.

For Mr. Soriano, dividend prospects could compel investors to consider the listed global port operator, as for the past three years, ICTSI has grown annual dividends, and this trend is expected to continue given sustained profit expansion.

He placed support levels at P469 while resistance at P500. — Abigail Marie P. Yraola