ICTSI bags 20-year contract to operate Ecuador port

Port operator International Container Terminal Services Inc. (ICTSI) said yesterday it has won a 20-year contract to operate a multi-purpose terminal at the Port of Guayaquil in Ecuador.

In a disclosure to the Philippine Stock Exchange, ICTSI said the concession agreement is scheduled to be signed in May.

Guayaquil is at the commercial center of Ecuador, and offers a wealth of business opportunities. The port handles 93 percent of container traffic in and out of the country and 62 percent of total import-export cargo, representing 453,000 twenty foof equivalent units TEUs and 5.1 million tons respectively, positioning it as the 13th largest port in Latin America and the Caribbean.

ICTSI has been aggressively acquiring new terminals abroad since 2001 as part of efforts to rebuild its operations overseas and boost revenues.

To further expand its international reach, ICTSI is looking at ports in Eastern Europe, Latin America, Middle East, and Asia. It is eyeing ports with a capacity of 300,000 to one million TEUs.

ICTSI operates container terminals in Poland, Brazil, Madagascar, Indonesia and Japan. Last year, it won a 10-year concession to operate the Tartous Container Terminal in Syria.

In January 2007, ICTSI signed an agreement to buy 60 percent of Yantai Gangtong Container Terminal Co. Ltd., which manages the Yantai Gangtong port in the eastern Chinese province of Shandong.

International operations continue to be a significant contributor to ICTSI’s earnings, accounting for 60 percent of the company’s total net profit last year compared with only 34 percent in 2005.

ICTSI’s flagship operation is the Manila International Container terminal — the main entrance and exit point for the country’s imports and exports.

Last year, ICTSI invested P1.8 billion to continue to expand the handling capacity and improve the operating efficiency of its operations in Manila, Poland, Brazil and Madagascar.

Funding for the port operator’s continued expansion will come from proceeds of a planned secondary offering and private placement of shares, estimated to raise about P6.85 billion. Proceeds from the offering could increase by an additional P1.02 billion should the underwriters exercise their overallotment option over 39 million shares.

Its unit ICTSI Warehousing Inc. is offering up to 261 million ICTSI common shares at P26.25 each, or a 7.9 percent discount to the closing price of ICTSI shares last March 21.

This transaction will be crossed through the exchange after approval for a regular block sale is obtained from securities regulators.

ICTSI posted a net profit of P1.84 billion last year, up 37 percent from the P1.35 billion reported in 2005. Gross revenues from port operations likewise grew 14 percent to P11.85 billion from only P10.44 billion.