Analysts Predict Hutchison Whampoa Expansion Will Offer Long Term Benefits

Tuesday, May 29, 2001
Hutchison Whampoa Ltd's deal to expand its container port network to six new countries will not bring big near term gains in revenue and net asset value, but analysts said it offers good long-term growth potential.

Hutchison said on Monday it had acquired the overseas ports arm of the Philippines' International Container Terminal Services Inc., bringing 23 container and general cargo berths in Mexico, Argentina, Saudi Arabia, Pakistan, Tanzania and Thailand.

The Hong Kong conglomerate, controlled by tycoon Li Ka-shing, has declined to disclose the price, but analyst estimates on the size of the deal ranged from US$240 million to US$542 million. Most estimates were based on the 1999 sale of a 29 percent stake in ICTSI International Holdings Inc (IIHI) for US$70 million to J.P. Morgan International Capital Corp and Capital International Global Emerging Markets Private Equity Fund.

This implied a then-valuation of US$241 million for IIHI, and analysts have been estimating new valuations based on higher throughput and revenues since then. Several said the ports had total container throughput of 1.6 million 20-ft.-equivalent (TEUs) in 2000.

Analysts at Goldman Sachs (who advised Hutchison on the deal) estimated a total equity value of US$300-350 million, or about 17 to 20 times historic 2000 earnings of US$17 million for the seven container ports involved in the deal. "We would view such a valuation as reasonable when compared with our existing net asset value estimate of 20 times forward earnings for Hutchison's developing port network in China," on equity analyst said.

Goldman Sachs advised Hutchison on the deal. He added that the ports acquired under the deal are at an early stage of development and would not provide any material upside to 2001 and 2002 earnings and net asset valuation estimates but said Hutchison would be able to enhance the value of the ports in the longer term.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

NYK Vessel First to Make Commercial Transit through Expanded Panama Canal

On June 27, the expanded Panama Canal opened for commercial transit, and Lycaste Peace, a very large liquefied petroleum gas (LPG) carrier operated by NYK, was

MSC Partners with Peel Ports for Liverpool2 Trials

Mediterranean Shipping Company (MSC) is pleased to be working with Peel Ports as commissioning work for Liverpool2 gets into full swing.   Berthing and Marine

Latin America Ports to Berth Larger Vessels

Foreign trade and energy have boosted economies throughout the Americas. From the USA, to Argentina, Ecuador and the Bahamas, Maersk is helping unleash the region’s

Maritime Security

Russia, US Blame Each Other for Maritime Incident

Russia and the United States gave contradictory accounts on Tuesday of an incident involving the two countries' navies in the Mediterranean Sea on June 17, each

Red River Closed after Barge Grounding

The Red River was closed Sunday from mile marker 40 to mile marker 42, after a barge reportedly ran aground and was protruding into the channel near mile marker 41, according to the U.

Chemical Tanker Runs Aground off Alaska

A 599-foot Norway flagged chemical tanker Champion Ebony ran aground near Nunivak Island, Alaska on June 24.   U.S. Coast Guard Sector Anchorage watchstanders

 
 
Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2498 sec (4 req/sec)