Last week, after finishing its Manila container terminal expansion project,INVESTORS loaded up shares of International Container Terminal Services, Inc. (ICTSI).
According to data from the Philippine Stock Exchange (PSE), only 7.04 million shares worth P8.98 million were exchanged from January 18 to 22, rendering it the fifteenth most actively traded stock.
The share price of the Razon-led port operator closed on Friday at P128.50, up by 1.3 per cent from a week earlier. Year to date, the stock has grown by two points.
“ICTSI has risen considerably over the week as it showed relative strength over the PSEi,” said China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail, referring to the PSE bellwether index.
Mr. Mercado observed that the acquisition of trading volume from last Wednesday to Friday was possibly motivated by news of the completion of the Manila International Container Terminal (MICT) Capacity Expansion Project as well as the Colombian ICTSI Terminal touching a milestone of one million twenty-foot equivalent units (TEUs).
The stock struggled to maintain the rally on Thursday (wherein it tried to break the P130 resistance). I believe it would be something of a small step, since it seems that market weakness as a whole has led this stock to struggle stated by Mr. Mercado.
According to AAA Southeast Equity, Inc., the completion of the berth expansion at MICT is already priced on ICTSI’s reserve. The director of analysis, Christopher John Mangun.
“While expansion will help alleviate congestion once import volumes pick up, investors are much more concentrated on real volumes, which are still marginally smaller than in 2019,” he said in an e-mail.
ICTSI reported last Tuesday the completion of the MICT berth expansion scheme, which expanded the terminal’s annual size by tenth to 3.3 million TEUs.
It added another 150 meters to the MICT Berth 7 and, together with the adjacent Berth 6, provided a 600-metre contiguous berth for more than 8,000 TEU vessels.
This development was complemented by a further 5.5 hectares extension of the container yard, expanding the terminal’s additional capacity by an expected 200,000 TEUs for filled containers and 150,000 TEUs for empty containers.
ICTSI’s sales declined by 0.9% year-on-year to $1.13 billion in the nine months to September, although its attributable net income decreased by 1.2% to $182.61 million in the same period.
It is active in 32 terminal concessions and port growth schemes in 19 countries around the world.
“We anticipate sales for the fourth quarter to be marginally lower than in the previous year, but due to the cost-preservation steps taken by the firm, net income will continue to rise year on year, comparable to what happened in the first nine months of 2020,” Mr. Mangun said.
It forecasts ICTSI’s fourth quarter earnings in 2020 at $65 million to $70 million and a full-year net earnings of about $245 million to $250 million.
Moving forward, Mr. Mangun expects the stock to restore all its losses from last year and shift towards P130 as volumes pick up.