ICTSI shrugs off tariff war, boosts profit in Q1

MANILA, Philippines — Logistics giant International Container Terminal Services Inc. (ICTSI) shrugged off uncertainties in world trade as it opened the year with a double-digit growth in both profit and revenue.

In a disclosure to the Philippine Stock Exchange, ICTSI said its profit jumped by 14 percent to $239.54 million in the January to March period, from $209.88 million a year ago.

ICTSI attributed the hike in its net income to the diversity of its portfolio, managing to weather the impact of a second trade conflict between China and the US.

ICTSI chairman Enrique Razon Jr. assured investors that the company is well-funded to invest in new projects that could bring in growth. He also said ICTSI has little exposure to US trade, so it has the opportunity to scale up in spite of the risky environment.

“Our balance sheet is robust and cash generation has been strong, reinforcing our ability to invest and capitalize on growth opportunities. Looking ahead, we are mindful of the uncertainties over global trading arrangements and potential macroeconomic headwinds, but for ICTSI, the direct impact of announced tariffs is small owing to limited exposure to US trade,” Razon said.

In the first quarter, ICTSI grew its re–venue by 17 percent to $745.42 million, due to the growth of trade volume in certain terminals.

The company handled 3.47 million twenty-foot equivalent units up by 12 percent from a year ago’s 3.09 million TEUs, thanks to contributions from new projects, particularly the Visayas Container Terminal.

To support future growth, ICTSI is spending $580 million for capital expenditures this year, of which 23 percent or $133.22 million has been used up as of March.

In particular, the capex funded expansion works for Contecon Manzanillo in Mexico and several Philippine terminals. ICTSI is also purchasing new equipment, so it can manage more containers in the future.

Razon earlier said he expects ICTSI to withstand the impact of higher US tariffs in Donald Trump’s return to the White House. He said only three percent of ICTSI volume comes from the US, primarily concentrated in its Mexico terminal.

The US slapped higher tariffs on trading partners, including the Philippines, as ordered by Trump last April 2, but has since suspended this policy for 90 days to make way for negotiations.

ICTSI is one of the biggest port developers in the world in the 50,000 to 3.5 million TEU range, benefitting from a portfolio of terminals scattered across six continents.