Razon's ICTSI recaptures lost ground to end 2020 in black

MANILA, Philippines — Logistics magnate Enrique Razon recovered his losses in early parts of 2020 and managed to end the year in black.

A combination of easing global lockdowns that allowed deliveries to push through, a new venture in Brazil, and fresh contracts that augmented revenue streams buoyed profits of International Container Terminal Services Inc. (ICTSI) by 1% to $101.8 million.

Prior to this audited report, ICTSI was running a 1% decline in net income in the first 9 months, financial results showed. 

“We were swift to take action at the start of the pandemic to initiate cost reduction, reduce capital expenditures, and later seized opportunities to lengthen our debt maturities at lower rates,” Razon, ICTSI chair and president, said in a statement.

Shares in ICTSI, however, were not left unscathed by a rout in the broader market on Thursday. Shares in the company went down 1.66% to close at P118.80 apiece.

Broken down, yearend gross revenues inched up 2% year-on-year to $1.51 billion, while expenses decreased a bigger 3.1% annually to $858.81 million. ICTSI said a “continuous group-wide cost reduction and optimization measures” pushed down disbursements last year. It did not go into specifics.

Revenue-wise, ICTSI was said to have benefited from its new terminal in Rio de Janeiro in Brazil which the company started operating in December 2019. On top of that, decisions of jurisdictions to ease coronavirus lockdown measures helped trade gain some steam that fed into logistics in the second half.

As a result, ICTSI was able to move more containers to the tune of 10.19  billion twenty-foot equivalent units, a measure of maritime shipping volume. The number represented a slight 0.2% increase from those handled in 2019.

Apart from better operations, the strong peso was also deemed “favorable” to the company since it cut import costs. Earnings before interest, taxes, depreciation and amortization (EBITDA)— another measure of financial strength— went up a larger 6% from year-ago to $876.8 million.

Despite disruptions on business activity last year, ICTSI was able to spend $198.7 million and invest them in boosting capacities of its terminals. The total amount spent exceeded a downgraded spending plan of $160 million early last year when the health crisis appeared to have already messed with the flow of goods and services.

The company plans to jack capital expenditures up to $250 million this year, ICTSI said.

“The estimated capital expenditure budget will be utilized mainly for the completion of the expansion project at MICT in Manila, Philippines, the ongoing yard expansion at IDRC in Matadi, Democratic Republic of Congo; the new expansion project at VICT in Melbourne, Australia; equipment acquisitions and upgrades; and for various maintenance requirements,” the firm said.