Bullish ICTSI braces for inflation fallout
MANILA -International Container Terminal Services Inc. (ICTSI) is bracing for economic challenges brought about by inflationary pressures but remains bullish with their outlook for the year after booking record-high net profits.
Enrique Razon Jr., ICTSI chair and president, said in a virtual stockholders’ meeting on Thursday that the “company’s business remains strong” amid the pandemic-induced global supply chain disruptions and rising fuel costs.
“We have inflationary headwinds throughout the globe right now and we expect that to continue and there’s really no telling when this inflationary environment will end,” he said.
“I believe these problems will continue for the foreseeable future but the company will overcome them eventually,” he added.
Razon gave a rosy outlook after the port operator registered record-high net income of $618.46 million last year, showing 44-percent growth from $428.57 million in 2021. Consolidated revenues for the period rose by 20 percent to $2.24 billion while earnings before interest, taxes, depreciation and amortization climbed by 24 percent to P1.41 billion.
ICTSI rakes in all-time high income as global trade rebounds
Last year, ICTSI handled a volume of 12.22 million twenty-foot equivalent units (TEU),which was 9-percent more than 11.16 million TEUs in 2021. The heavier volume was attributed to the easing of mobility restrictions that permitted more economic activities.
Cost optimization
This year, the port operator is earmarking $400 million for its capital outlays, which is more than it spent in 2022 at $386.35 million. The capital expenditures are allocated for equipment acquisitions and upgrades and maintenance requirements, in addition to ongoing expansion plans.
“For several years now, we have been prudent in controlling our capital expenditures, allocating funds for ongoing projects and for terminals demonstrating imminent growth. At the same time, we continue with our cost optimization efforts in this inflationary environment,” Razon said.
Last year, it bought majority ownership of a multipurpose terminal in Lamongan Regency, East Java, Indonesia.
ICTSI renewed the concession for the Baltic Container Terminal in Poland last December for another 30 years or until 2053.
It has also started the third phase of its $230-million port expansion project at Mexico-based subsidiary Contecon Manzanillo SA de CV. The project is expected to boost the terminal’s capacity to more than 2 million TEUs within the next five years from the current 1.4 million TEUs.
