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Thursday, April 10, 2014

ICT: ICT to operate and expand Iraq port

ICT to operate and expand Iraq port. ICT disclosed today that has signed an agreement with General Company for Ports of Iraq (GCPI) for the construction and operation of three new quays and management and operation of Quay No. 20 in the Port of Umm Qasr in Iraq. ICT said that the agreement grants ICT the right to manage existing container facility at Berth 20 of the Port for 10 years, and to build under a Build-Operate-Transfer scheme a new container terminal for 26 years. Phase 1 of the new terminal will have an estimated capacity of 300,000 TEU, while the new port will have a full potential of 900,000 TEU. Total cost for Phase 1 and the rehabilitation of Berth 20 is estimated at US$130Mil and is expected to be operational in two years.

The capacity of the Phase 1 of the new Iraq port of 300K TEU represents 4.5% of ICT’s total volume handled. This is in line with ICT’s overall goal of further expanding its portfolio of across the world. The impact of the new port can be determined as more details on the project is disclosed.

Reiterate HOLD rating with a FV estimate of Php108.00/sh. We have a HOLD rating on ICT with FV estimate of Php108.00/sh. While we still like the company’s long term outlook given its successful track record of growing its port portfolio through acquisitions and greenfield projects, and its focus on emerging economies which have a favorable long term growth outlook compared to overall global economy, valuations are not compelling at this point. Based on ICT’s current price of Php109/sh, there is no more upside to our FV estimate of Php108.00/sh.

Source: Col Financial

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