ICTSI cruises in H1, books $420 million profit

MANILA, Philippines — The logistics arm of the second richest Filipino is sailing smoothly into the year, booking more than $420 million in profit in the first semester and keeping its cash flowing steadily.

Port operator International Container Terminal Services Inc. (ICTSI) of billionaire Enrique Razon Jr. is on track for another year of growth, as profit rose by 34 percent to $420.55 million in the first half, from $313.8 million a year ago.

Razon, who is now the richest in the Philippines on an individual count, according to the Forbes, said ICTSI is prepared to invest on expansion projects, armed with a free cash flow of $602 million.

As of June, revenue has gone up by 15 percent to $1.32 billion. ICTSI traced its earnings growth to ancillary services, tariff adjustments and volume growth, with favorable foreign exchange on the appreciation of the Mexican peso.

ICTSI also expanded its container volume by one percent to 6.31 million twenty-foot equivalent units (TEUs), as the company gained from the introduction of new services in certain terminals. ICTSI would have recognized a bigger growth if not for the decline in volume in Ecuador and the expiration of its concession in Pakistan.

Expenses also shot up by seven percent to $349.43 million, as ICTSI invested more in operating costs so that its terminals are able to serve volume increases.

“We have a robust balance sheet and cash generation is strong with free cash flow up 24 percent to $602 million, which means we have significant headroom to invest for future growth,” Razon said.

“While we remain vigilant of the continuing economic and geopolitical uncertainties, we have a proven and sustainable growth strategy which gives us confidence in our outlook and continued ability to generate value for all our stakeholders,” he added.

ICTSI has so far spent $185.72 million for capital expenditures, mainly for infrastructure works. Currently, ICTSI is expanding its terminals in Brazil, Democratic Republic of Congo, Indonesia, Mexico and the Philippines.

For 2024, the company has allocated $450 million for capex, including $60 million of carryover from 2023. It is looking for investment opportunities here and abroad, building up its capacity for future demand, such as the development of the Visayas Container Terminal in Iloilo.

Apart from this, ICTSI is acquiring new equipment to bolster the capacity of its existing projects.

ICTSI is one of the biggest port operators in the 50,000 to 3.5 million TEU a year range, running terminals in six continents with intent to further expand.