Stock Commentary

ICT FY23 net income down 17% to US $511-M

Merkado Barkada
ICT FY23 net income down 17% to US $511-M

International Container Terminal Services [ICT 283.20, down 2.0%] [link], the multi-national port operator owned by Enrique Razon, posted FY23 net income of $511 million, which was down 17% from FY22’s $618 million due to a “non-recurring and non-cash impairment of goodwill” related to ICT’s acquisition of Pakistan International Container Terminal (PICT), and to various other increases in expenses and liabilities. ICT said that without the impairment of goodwill attributed to PICT, the company would have had a FY23 net income of $677 million which would have been a 7% improvement over FY22. ICT’s revenues increased 6% to $2.39 billion, and the volume of containers handled increased 4% to 12.7 million.

MB bottom-line: ICT operates in markets and conditions that would make most PSE-based companies brown their pants. Mr. Razon’s seeming comfort in operating abroad across wildly different costumes and cultures has always impressed me, and as I get older, I have begun to consider this the prime competitive advantage of Mr. Razon’s approach. He has figured out a way to monetize his ability to somehow harvest the ripe and juicy fruit at the top of the tree that is out-of-reach to most that only reach up from the ground to the low-hanging branches. What sets his organization apart from its contemporaries is its ability to take this fruit repeatedly (year after year, through changing conditions), and to replicate the approach across different trees (markets and industries). He’s the opposite of fellow tree-climber, Dennis Uy, who seemed to be so entranced by the juicy fruits at the top that he started climbing as fast as he could without any regard for what he’d do with the fruits once he got them. I could imagine Mr. Razon patiently climbing down the tree, pack filled with his amazing harvest, knowingly ignoring the spectacle of Mr. Uy, a tangle of cuts, bruises, and broken limbs, desperately clinging to one of the tree’s lower branches after having fallen from the top through the limbs because he was carrying more fruit than he could reasonably handle. Maybe Mr. Razon stops to grab a few of Mr. Uy’s fruits. Maybe he just continues his descent. Either way, he returns to base with yet another pack of mysteriously delicious fruits.


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