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 Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

October Imports up 9% at Port of Oakland

Containerized imports shipped through the Port of Oakland were up 9.17% in October from a year ago, the port said, citing the surge as the biggest jump in import cargo volume in six months.

BG Group's Queensland Curtis LNG to Ship First Cargo

BG Group is set to ship the first cargo of liquefied natural gas from its flagship gas project Queensland Curtis LNG on Dec. 20, a source familiar with the matter told Reuters.

Belgian Strike to Impact Antwerp Port

A strike in parts of Belgium on Monday is expected to disrupt rail services and one of Europe's largest ports as trade unions and workers voice their anger over

Maritime Security

Bouchard Vessels Honored by SCA

Forty-three Bouchard Transportation Co., Inc. vessels have been honored by The Chamber of Shipping America (CSA) with Certificates of Environmental Achievement.

IMO Steps Up Safety in Polar Waters

United Nations’ International Maritime Organization (IMO) has adopted global, binding regulations to enhance safety of navigation in polar waters. After several years’ intense negotiations,

DGS Marine Advises Fixed Premium P&I Cover

DGS Marine, a leading global P&I management provider and exclusive manager for the British European and Overseas (BE&O) P&I facility, has highlighted the benefits

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Port Authority Salvage Ship Electronics Ship Repair Ship Simulators
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1102 sec (9 req/sec)