ICTSI: 2021 was our best year

By EMMIE V. ABADILLA

International Container Terminal Services, Inc. (ICTSI) "had its best year ever in 2021" despite the global pandemic raging on in its second year, with cases surging at different times and lockdowns being imposed in one region or another, Chairman Enrique K. Razon Jr. reported Thursday, April 21, 2022, during the company's virtual annual stockholders' meeting.

"In every metric, whether financial or operational, ICTSI set new records both with our organic and new terminals," he announced.

In terms of consolidated volume, ICTSI handled 11,163,473 twenty-foot equivalent units (TEUs) in 2021, higher by 10 percent versus the 10,193,384 throughput in 2020.

The double-digit growth was due to improved trade as lockdowns and restrictions began to ease, plus new shipping line contracts at certain terminals.

"Without the contribution of our new terminal Onne Multipurpose Termcinal (OMT) in Nigeria, consolidated volume would have increased by nine percent," Razon noted.

Gross revenues from port operations grew by 24 percent in 2021 to $1.87 billion compared to $1.51 billion in 2020.

Aside from improved trade demand for trade, the favorable impact of foreign exchange in certain terminals and the contribution of new terminals contributed to the company's revenue growth.

"Without these new terminals, consolidated gross revenues would have increased by just 21 percent," according to the Chairman.

Net income attributable to equity holders, at $428.57 million was "the highest ever", and was 321 percent higher than the $101.76 million earned previously.

The four-fold increase was due to higher operating income and non-recurring charges in 2020.

In addition, equity in net loss of joint ventures was practically reduced to zero, from a $12.27 million loss in 2020, because of our higher share in net income from Manila NorthPort and lower net loss in Colombia.

Furthermore, consolidated EBITDA increased 30 percent to $1.14 billion in 2021, from $876.83 million in 2020.

"This was the very first time that the company generated EBITDA of over $1 billion," Razon pointed out.

EBITDA margin increased to 61 percent in 2021 from 58 percent.

Consolidated cash operating expenses in 2021 was 15 percent higher at $523.33 million compared to $453.63 million.

The increase was mainly caused by the surge in prices of fuel and power, and costs associated with the new terminals.

Consolidated cash operating expenses would have increased by 12 percent without the costs of the new terminals.

The Chairman also reported a number of business developments.

These include signing an agreement with the Nigerian Ports Authority to develop and operate OMT in Rivers State, Nigeria last March.

"After only 2 months, our fourth African terminal was ready for business."

Victoria International Container Terminal (VICT) serviced the MV Soroe Maersk, the longest vessel to ever call at the Port of Melbourne the following month.

In June, ICTSI acquired full ownership of Manila Harbor Center Port Services, the largest international breakbulk and bulk operation at the Port of Manila.

"We now have 10 terminals in the Philippines," Razon noted.

In the same month, Adriatic Gate Container Terminal in Croatia celebrated its 10th year, with the handling of its 2 millionth TEU.

In July, ICTSI added rail logistics to our operations when ICTSI Rio Brasil formed IRB Logistica to operate the Floriano Intermodal Terminal in Barra Mansa, Rio.

Basra Gateway Terminal handled its three millionth TEU in August, coinciding with its seventh anniversary.

Not far behind, Pakistan International Container Terminal handled its 10 millionth TEU since operating in 2002.

"We ended 2021 on a high point, securing a 15-year concession extension for Madagascar International Container Terminal (MICTSL) in the Port of Toamasina, our first African terminal."

As for fund management, ICTSI drastically cut back on capital expenditures, allocating funds only for projects already started and for terminals with very high growth.

Capital expenditure, excluding capitalized borrowing costs, in 2021 amounted to $165 million.

The capex funded the ongoing expansion at Manila International Container Terminal (MICT), Matadi Gateway Terminal (MGT) in the Democratic Republic of the Congo, VICT in Australia, Contecon Manzanillo (CMSA) in Mexico, acquisition and upgrades in infrastructure and equipment at OMT and Contecon Guayaquil (CGSA) in Ecuador.

For 2022, ICTSI allocated $330 million for its capital expenditure to pay the concession extension upfront fees for MICTSL, expansion at MICT, MGT, VICT and CMSA.

"During the year, we recalibrated our capital structure by successfully repurchasing $185 million worth of 5.875 percent and $85 million of 4.875 percent of senior guaranteed perpetual capital securities with call dates in 2022 and 2024, respectively," says the Chairman.

To fund the tender offer, the company priced and launched in a separate transaction a new issue of 10-year 3.5 percent fixed rate senior bonds amounting to $300 million.

These combined transactions will reduce ICTSI’s overall financing cost, enhance return on equity and reflect the rising cash flow from international subsidiaries in our long-term balance sheet strategy, Razon maintained.

But "Just as the pandemic seems to be waning so far, new challenges emerge as war clouds engulf Europe with the Russian invasion of Ukraine. We seem to be in a global cycle of one crisis after another," he noted.

"Although the war is mainly a European affair, we can all expect to feel the impact globally in terms of the global economy, stability and security," he acknowledged.

Razon ended his report by saying, "We are confident of the performance of ICTSI going forward, but we are mindful of the challenges we face with these global events."