ICTSI seen to withstand Middle East war shock

Tycoon Enrique Razon Jr.-led International Container Terminal Services Inc. (ICTSI) is seen well-positioned to weather the Middle East crisis, with limited direct exposure to the conflict and with measures already in place to cushion rising fuel costs.

This is according to First Metro Securities Brokerage Corp., which, in a recent report, projected ICTSI’s earnings growth at 11.9 percent to 15.4 percent over the next two years, saying the conflict was “unlikely” to materially derail the ports giant’s earnings trajectory.

If realized, the projected growth would still mark a slower pace than the 23.3-percent surge in ICTSI’s net income in 2025, when profit climbed to $1.05 billion on the back of stronger cargo volumes across its global portfolio.

While ICTSI operates the Basra Gateway Terminal in Iraq, First Metro said that the exposure remained relatively small. The brokerage estimated that Iraq accounted for only around 2,000 of ICTSI’s 23,853 attributable TEU (twenty-foot equivalent unit) capacity.

In terms of revenue contribution, Basra terminal makes up only about 4 percent to 5 percent of ICTSI’s revenues, First Metro said.

It added that while the terminal remains closed indefinitely amid disruptions in the Strait of Hormuz, the full impact on ICTSI was “still uncertain, given the early stage of the conflict.”

Still, the brokerage described ICTSI as “built to weather rough seas,” citing the company’s pricing power, operational efficiency and expansion pipeline.

ICTSI is targeting to grow its attributable capacity to 30 million TEUs by the end of the decade from around 21 million currently.

Fuel exposure

Apart from port disruptions, ICTSI’s largest exposure to the conflict has been through fuel costs.

At the company’s recent annual stockholders’ meeting, Razon said that fuel remained available, although at significantly higher prices. He added that he was uncertain about whether current supply conditions would hold if the conflict drags on.

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First Metro noted that fuel had already accounted for about 10 percent of ICTSI’s operating expenses even before the conflict escalated.

Still, the brokerage said that the company has managed to soften the impact through fuel surcharges implemented on terminal services starting mid-April.

“While fuel costs (around 10 percent of opex) likely pressured margins in March to early April 2026, the implementation of fuel surcharges on terminal services from mid-April should help protect margins going forward,” it added.

First Metro added that its outlook could change if disruptions to global trade become prolonged, or if ICTSI’s mechanisms for passing on higher fuel and operating costs become insufficient.

ICTSI plans to increase capital expenditures to about $740 million in 2026 from $650.44 million last year, backed by a “robust” cash position of roughly $1.1 billion as of end-2025.