Despite the global economic impact of the Ukraine war, the International Container Terminal Services, Inc. (ICTSI) had "a record year in 2022" and has earmarked a controlled capex of $400 Million for 2023, Chairman of the Board and President Enrique K. Razon Jr. reported at the virtual Annual Stockholders Meeting, Thursday, April 20.
ICTSI reports record year in 2022
At a glance
Despite the global economic impact of the Ukraine war, the International Container Terminal Services, Inc. (ICTSI) had "a record year in 2022" and has earmarked a controlled capex of $400 million for 2023, Chairman of the Board and President Enrique K. Razon Jr. reported at the virtual Annual Stockholders Meeting, Thursday, April 20.
Economies recovering from pandemic restrictions boosted trade and the consolidation of Manila NorthPort increased ICTSI's volume by nine percent to 12,216,190 twenty-foot equivalent units (TEUs) from 11,163,473 TEUs handled in 2021.
"Without the contribution of NorthPort, and Onne Multipurpose Terminal (OMT) in Nigeria, consolidated volume would have increased by five percent," he explained.
"Growth was not spread out evenly as some countries did better than others."
And due to volume growth, along with tariff adjustments at certain terminals, higher revenues from ancillary services, and the contribution of NorthPort, Manila Harbor Center, OMT and IRB Logistica in Brazil, ICTSI grossed 20 percent more revenues, US$2.24 billion versus US$1.87 billion in the comparative period.
The increase was partially tapered by a decline in trade at Pakistan International Container Terminal, and the unfavorable impact from the depreciation of the Philippine Peso, Australian Dollar and the Euro.
"Without revenues from NorthPort and the new terminals, gross revenues would have increased by 17 percent," according to Razon.
Excluding non-recurring charges, recurring net income attributable to equity holders of the parent firm in 2022 was 43 percent higher at $634.48 million compared to the $442.83 million in 2021.
Consolidated EBITDA increased 24 percent to $1.41 billion, from US$1.14 billion in 2021.
Consequently, EBITDA margin increased to 63 percent in 2022, from 61 percent the previous year.
Consolidated cash operating expenses was 17 percent higher at $612.12 million compared to $523.33 million in 2021.
The increase was due to costs of NorthPort, new terminals, and massive increases in fuel and power, and the unfavorable foreign exchange effect of the Brazilian Reais.
The increase was partially reduced by continuous cost optimization measures. Without costs from NorthPort and new terminals, cash operating expenses would have increased by 12 percent.
Overall, 2022 was a relatively quiet year for acquiring new terminals, Razon observed. "However, we expect that to change in the near future. "
On the other hand, ICTSI undertook expansion projects at the MICT, VICT in Australia and Contecon Manzanillo in Mexico likewise for Matadi Gateway Terminal (MGT) in DR Congo and OMT in Nigeria.
"We acquired majority ownership of a multi-purpose terminal in Lamongan Regency, East Java, Indonesia. The East Java Multipurpose Terminal is our 11th terminal in Asia Pacific," he enumerated.
The company formed iTracker Logistica Inteligente, a new multimodal business operating in Rio de Janeiro and Barra Mansa in Brazil.
The Adriatic Gate Container Terminal launched the first direct train service between Rijeka, Croatia and Enns in Austria. The block train is operated by Maersk Line with CD Cargo Adria.
In December, South Pacific International Container Terminal in Papua New Guinea became capable of handling larger box ships after receiving a pair of new quay cranes, the first of its kind in PNG.
Still in December, we renewed our concession for the Baltic Container Terminal in Poland for another 30 years. The new concession will run until 2053.
At the same time, Contecon Manzanillo commenced its third phase expansion project, which will increase capacity from 1.3 million to two million TEUs once completed.
"For several years now, we have been prudent in controlling our capital expenditures, allocating funds for ongoing projects and for terminals demonstrating imminent growth," said Razon.
"At the same time, we continue with our cost optimization efforts in this inflationary environment."
Capital expenditures, excluding capitalized borrowing costs, in 2022 amounted to $386.35 million.
These were mainly for ongoing expansion at VICT, the MICT, MGT and in Contecon Manzanillo, land acquisition in the Port of Manila and concession-extension related expenses in Madagascar.
The ICTSI Group’s estimated capital expenditure for 2023 is approximately $400 million.
This will be used for ongoing expansion in VICT, Contecon Manzanillo, MICT, and MGT and is primarily a spill over from last year.
It will also go into the second tranche of concession extension related expenditures in Madagascar, yard expansion at OMT and berth expansion at Rio Brasil Terminal.
"We remain steadfast in our strategy and approach in ensuring that our portfolio continuously performs and to transform any additions to the portfolio," Razon concluded.