ICTSI sets sights on expanding presence abroad

By Lawrence Agcaoili, The Philippine Star

Posted at Apr 19 2013 08:40 AM | Updated as of Apr 19 2013 04:40 PM

MANILA, Philippines - Port giant International Container Terminal Services Inc. (ICTSI) is setting its sights on further expanding its overseas presence and is looking at several acquisition opportunities in Europe, the US, Africa, the Middle East, and Asia Pacific.

ICTSI chairman and president Enrique K. Razon said in an interview with reporters after the company’s annual stockholders’ meeting that the company is set to expand its operations in other countries.

“We are watching Myanmar, Cambodia and Vietnam in Asia. Among the three, we are watching Myanmar but there is no plan to expand there right now and Cambodia is the most promising but the government is not decided yet to privatize,” Razon stressed.

He pointed out that the company is bullish about the prospects of the shipping industry with the expected increase in global trade.

He said that ICTSI is spending $500 million or lower than the earlier announced $550 million this year to bankroll its operations abroad particularly in Argentina and Mexico and at the same time expand its presence in the Philippines.

The budget would be used to complete the company’s terminal development projects in Argentina and Mexico as well as to ramp-up of construction activities in Colombia as well as in Davao, southern Philippines.

The company spent $465.6 million for its expansion against a full year capital expenditure budget of $550 million in 2012.

Projects last year included the construction of a new berth, additional yard space and acquisition of major cargo handling equipment in the company’s container terminal operation in Manila, capacity expansions in its operations in Ecuador and Brazil, and development of new container terminals in Argentina and Mexico.

Early this year, the company through its ICTSI Treasury BV raised $400 million as part of its $750 million medium term note program to fund expansion programs.

ICTSI vice president and treasurer Rafael Consing said the company’s financing requirements is already covered for this year after raising $400 million.

Consing said the company would stick to the debt market for its fund raising activies unless there would be “game changing” acquisition opportunities requiring huge funds.

“In my opinion, unless there’s some game-changing acquisition, we will stick with debt. If we find a large acquisition that requires us to raise equity beyond debt capacity, then we will,” he added.

ICTSI booked a 10 percent growth in net income to $144 million last year from $131 million recorded in 2011 as consolidated volume handled climbed 7.5 percent to 5.628 million twenty-foot equivalent units (TEUs) from 5.233 million TEUs.

Volume growth was traced to the increase in international and domestic trade, new shipping line customers and routes, continuous containerization of break bulk cargoes, the full period contribution of the company’s new ports in Portland, Oregon, USA and Rijeka, Croatia.

The growth was also traced to the consolidation of the volume generated by the ICTSI’s new terminal operations in Jakarta, Indonesia and Karachi, Pakistan.

This translated to a 10 percent growth in revenues from port operations to $729.3 million last year from $664.8 million in 2011.