ME, Japan crises won't dent profits - ICTSI

Manila, Philippines - Cargo operator International Container Terminal Services Inc. (ICTSI) said the escalating nuclear crisis in Japan and continued unrest in the Middle East and North Africa may likely affect its performance this year, but expressed confidence the impact will hardly make a dent on its bottom line.

On the sidelines of the company’s annual stockholders meeting yesterday, ICTSI chairman and chief executive officer Enrique K. Razon Jr. said a widening nuclear crisis could upset the global supply chain and affect economic recovery.

Razon said Japan accounts for 10 percent of the company’s total volume.

He said continued growth in trade in other countries wil take up the slack left by Japan, which is a major producer of cars, heavy machinery, auto parts and electronic goods and components.

“The biggest imponderable the global economy faces are the economic effects in Japan and the financial impact on global finance of the unfortunate incidents in that country. On the one hand, there is the country’s massive national debt and the temporary immobilization of key manufacturing plants for some of Japan’s most desired products,” Razon said.

Nevertheless, Razon believes the company’s earnings will continue to grow this year as it enters new markets. ICTSI reported a 79 percent jump in net profit last year to $98.3 million, mainly due to the recovery in global trade, higher revenues and improved lower tax rate.

Asian port operations contributed 52 percent to ICTSI’s full year consolidated gross revenues last year.

Full year revenue contribution from container terminal operations in the Americas was 30 percent higher at $192.1 million compared to $147.4 million a year earlier.  

ICTSI has earmarked $356 million for its capital expenditures this year or nearly three times the amount spent in 2010 as it gears up to further widen its presence overseas. Of the total, $214 million will go to projects in Argentina, Mexico and Colombia. The balance will be mainly for civil works, systems improvement and purchase of major cargo handling equipment for operations in Manila, Brazil and Ecuador.

ICTSI is currently involved in 23 terminal operating concessions and development projects in 17 countries worldwide. These are six operating terminals in the Philippines and one each in Brunei, japan, China, United States, Ecuador, Brazil, Croatia, Poland, Georgia, Syria and Madagascar.