ICTSI cautious on expansion

Port operator International Container Terminal Services Inc. (ICTSI) is taking a cautious stance on its expansion initiatives as the global macroeconomic scenario makes it difficult to predict how long the current economic slowdown will last, the company top official said.

“We’re cautious because of what’s going on right now,” said ICTSI chairman and president Enrique K. Razon Jr. in an interview with reporters following the company’s annual shareholders’ meeting yesterday.

He, however, said the company remains open to acquisitions should anything interesting crop up.  ICTSI is looking at Africa, Middle East, Latin America, Eastern Europe and Asia as sites for future expansion.

ICTSI is setting aside P10 billion this year for the construction of a new multi-user container terminal at the Port of Buenaventura in Colombia, as well as the acquisition of new equipment. 

The programmed capital budget is slightly higher than the P9.9 billion spent last year  which went to the expansion of operations in Manila, Poland, Brazil and Madagascar, and the acquisition and rehabilitation of new terminals in Ecuador, China, Syria, Georgia, Colombia and Davao.

Razon said a looming recession in the US could affect the company’s operations and result in lower revenues.  Management, however, is looking at measures to mitigate the effects of a global downturn, he said.

The Colombia terminal’s concession is for a period of 30 years with an estimated investment requirement of around $180 million.  Upon completion, the facility is expected to have an opening throughput capacity of 450,000 twenty-foot equivalent units (TEUs) and maximum capacity of 1.2 million TEUs.

ICTSI reported a net income of P2.7 billion last year, up 52 percent from the 2006 figure, on strong revenue growth of its domestic and international operations.  Gross revenue  rose 27 percent to P15 billion, with revenue from its international operations growing 44 percent to P7.4 billion. 

Revenue contribution from its domestic operations reached P7.6 billion, up 13 percent from the previous level.

ICTSI handled three million TEUs in total volume last year or an increase of  51 percent from the 2006 level.