ICTSI scans horizon for more acquisitions

MANILA, Philippines—International Container Terminal Service Inc. (ICTSI), the country’s largest port operations company, remains on the lookout for port projects being privatized abroad, mainly in emerging economies, according to a top company official.

ICTSI treasurer and vice president for finance Rafael Consing said the company is looking at a “handful” of opportunities in Africa, Eastern Europe and Asia.

The move is in line with the ICTSI’s strategy to expand port operations outside the Philippines, where it operates the Manila International Container Terminal. Investments outside the Philippines account for about 65 percent of the company’s earnings, Consing said.

The company will soon take over a port in Honduras. It is also finalizing investment details for the Aguadulce Port project in Columbia with partner PSA International Ltd., he added.

The company, through a joint venture with Anglo Ports, has submitted a bid for a port project in Melbourne. Consing said the bid is still being evaluated in Australia.

Capital spending next year will be “lower than $500 million,” which is below the $550 million it is projected to spend this year, Consing said.

By next year, the company will have finished paying for its investment in Mexico, which is expected to start formal operations soon. He added that most of the financial requirements for a port project in Argentina would be settled this year.

“Next year, Colombia will be the only greenfield project,” Consing said.

Should it succeed in acquiring new projects, Consing said, the company may decide to raise more funds.

ICTSI earlier increased its note borrowing program by a quarter to $1 billion. So far, it has issued $607 million worth of debt paper, Consing said.

ICTSI’s $550-million budget this year will be used to complete terminal development projects in Argentina and Mexico, and to ramp up expansion in Colombia and Davao.

Net income in the six months to June this year reached $82.9 million, up 18 percent, the company reported. Revenue from port operations also increased 20 percent to $413.7 million.

The company operates seven key terminals in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan. Collectively, they account for 85 percent of the company’s revenues.

In the first half of 2013, ICTSI handled consolidated volume of 3.03 million twenty-foot equivalent units (TEUs)—12 percent more than the 2.7 million TEUs handled in the same period last year.