Coronavirus sinks ICTSI's profits by 18% in Q1 2020, cuts capex by 60%
MANILA, Philippines – Enrique Razon Jr's International Container Terminal Services Incorporated (ICTSI) saw its earnings drop in the 1st quarter of 2020, as the coronavirus pandemic crippled global trade.
ICTSI posted a net income of $59.6 million (P3 billion) in January to March, 18% lower than the $72.4 million (P3.65 billion) posted in the same period last year.
Revenues from port operations reached $375.8 million (P18.95 billion), 2% lower than last year.
"The effect of the virus was felt in the latter part of the 1st quarter and our volumes compared to the previous year were largely flat," Razon said.
ICTSI earlier appealed to the government and stakeholders to remedy lockdown rules, as containers piled up at the Manila port. The issue has since been resolved. (READ: Razon's ICTSI, Solaire start coronavirus mass testing for employees)
ICTSI also announced a drastic 60% cut in its capital expenditures (capex) for the year. From the original $270-million (P13.6-billion) budget, ICTSI's capex for 2020 is now at around $100 million (P5.04 billion), to be used mainly to finish ongoing expansion projects.
Razon said regions were at different stages of the coronavirus outbreak during the quarter, which eventually led to the slump in ICTSI's portfolio performance.
"Asia delivered lower volumes compared to [the] previous year while EMEA (Europe, the Middle East, and Africa) and America segments both still registered positive volume growth for the quarter. However, the latter two regions showed signs of weakness in March," the ports tycoon added.
ICTSI also cited lower operating income, increase in interest on concession rights payables, and COVID-19-related expenses as factors in the earnings dip.
The company's capex during the 1st quarter amounted to $59.7 million (P3.01 billion), mainly for the expansion of the Manila International Container Terminal, as well as ongoing expansions of its ports in Mexico and Congo. – Rappler.com
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