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Today's announcement on Portek having signed 2 separate MOUs to explore the feasibility of developing and operating container and multi-purpose terminals in Russia, makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...B000F5528/$file/Portek-Announcement-of-MOUs-with-Russian-Companies.pdf?openelement
In the 1st MOU on the feasibility of investing in the development of a multipurpose terminal in the city of Vladivostok in the Russian Far East, CWT is also involved as a potential partner. More info on Vladivostok.....
http://en.wikipedia.org/wiki/Vladivostok
In the 2nd MOU on the feasibility of jointly developing a new container terminal in Kaliningrad, Russia, Portek is involved with (an unfamiliar company) Armley Investments Ltd. More info on Kaliningrad.....
http://en.wikipedia.org/wiki/Kaliningrad
I am more looking forward to review the coming AR for FY10 (ended 30Jun10), and the announced $0.02572/share Final dividend, which will be paid on 19Nov10 (with "ex-date" fixed on 8Nov10).
Meanwhile, it is useful to note that in FY10, Portek had again raised both the quantum and quality of its earnings, as evidenced in the FY10 results announcement.....
http://info.sgx.com/webcoranncatth.nsf/V...8003AF13B/$file/Portek-Masnet-FY30Jun2010.pdf?openelement
Based on FY10's EPS of $0.0848, and 30Jun10 NAV/share of $0.4636, I believe Portek's last done price of $0.44 remains very much under-priced.
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14-10-2010, 05:23 PM
(This post was last modified: 20-11-2010, 03:16 PM by dydx.)
Portek's just released FY10 (ended 30Jun10) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/07aed3...b00188a79/$FILE/Portek%20International%20Limited%202010%20AR%20(SAR1006020).pdf
I think it is reasonable to expect that in FY11, Portek should continue to improve its financial performance at group level. As a whole, Portek's Port Operations & Management ("POM") businesses is now already quite well-established, and the current still increasing international trade volume should lift POM's revenue and profit further. A return to growth for international trade volume will also lift business volume and profit for Portek's well-established Port Equipment Engineering ("Engineering") business, which is now much better managed than before, after the restructuring and margin improvement measures implemented in the last few years.
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What are your thoughts on operating in developing countries? How does Portek mitigate political risk in Gabon, Algeria and Malta, or is that risk not a significant concern?
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21-10-2010, 07:25 PM
(This post was last modified: 20-11-2010, 03:53 PM by dydx.)
(21-10-2010, 02:45 PM)cif5000 Wrote: What are your thoughts on operating in developing countries? How does Portek mitigate political risk in Gabon, Algeria and Malta, or is that risk not a significant concern?
I suppose as part of its risk management, Portek will have to critically assess the country risks (political, currency conversion, nationalisation, etc.) of each of these developing countries first-hand and carefully before engaging; and after that, manage the local port operations and finances in such a way in order that the company is not taken advantage of.
We have to bear in mind ports are critical to all countries in ensuring that goods can go in and out and 2-way international trade can function efficiently. A smooth and efficient port operation nowadays is based on hardware, advanced IT, human expertise, plus a lot of operational experience gained over time and constant improvement and learning. Many developing countries just do not have that and cannot possibly attain it on their own; that's the main reason why they are willing to admit Portek, and for the bigger ports, PSA or Hutchison.
In some cases, there are local j-v partners involved. Presumably, these local partners must try to make sure that relationships with the local politicians and government are well managed.
In a worst-case scenario, in a dispute Portek can switch off the computers and ship out the cranes they have brought in, and take a financial write-off in its investment in the port. But I think this has never happened before...
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21-10-2010, 11:19 PM
(This post was last modified: 21-10-2010, 11:24 PM by cif5000.)
(21-10-2010, 07:25 PM)dydx Wrote: I suppose as part of its risk management, Portek will have to critically assess the country risks (political, currency conversion, nationalisation, etc.) of each of these developing countries first-hand and carefully before engaging; and after that, manage the local port operations and finances in such a way in order that the company is not taken advantage of.
We have to bear in mind ports are critical to all countries in ensuring that goods can go in and out and 2-way international trade can function efficiently. A smooth and efficient port operation nowadays is based on hardware, advanced IT, human expertise, plus a lot of operational experience gained over time and constant improvement and learning. Many developing countries just do have that and cannot possibly attain it on their own; that's the main reason why they are willing to admit Portek, and for the bigger ports, PSA or Hutchison.
In some cases, there are local j-v partners involved. Presumably, these local partners must try to make sure that relationships with the local politicians and government are well managed.
In a worst-case scenario, in a dispute Portek can switch off the computers and ship out the cranes they have brought in, and take a financial write-off in its investment in the port. But I think this has never happened before...
We can only hope that they have done sufficient risk assessment.
Correct me if I am wrong, Portek is in these countries because the concessions involve first a port transformation and then the operation. A BOT model. The investment made by Portek in the past few years cannot be "shipped" out. A write-off would involve the intangibles (money already paid out) and fixed assets. That could wipe out a huge portion off the balance sheet.
If JV is one way to mitigate political risk, then Gabon should be classified as critical, because they operate as a 100% owned subsidiary without local partners, and the group derive 35% of its revenue from there.
It is also interesting to note that Algeria has a high amount of fixed asset "stuck" there while the revenue is relatively mild. So I guess one of the following is true.
1. The port is under utilized
2. They over invested (because it is their first time going outside Indonesia)
3. The other ports need more investment
It also struck me that Portek could get someone to insure them against political risk. World Bank has a program. Insurers can do the underwriting. Why aren't they doing that?
I'll be at the AGM.
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23-10-2010, 12:36 AM
(This post was last modified: 24-10-2010, 08:33 AM by pianist.)
if i didnt read wrongly, the chairman statement in paragraph 3 of the recent annual report dated 2009 (crisis period) said that one of the success factor was that their operations and ports are strategically located in developing countries/geography where there are commodity export from the port. i guess it is a risk mgt issue that they probably have to consider and weigh the risk-return. i may be wrong as i am pretty new in port operations
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Very briefly. ED Ooi said they do not do BOT and have no political insurance. Gabon although 100% owned has a 45% profit sharing to the locals. Share transfer in progress.
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Just a reminder, Portek will be XD on 3 Nov 2010.
A public-opinion poll is no substitute for thought.
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Just checked my bank account and noted a very nice credit from Portek's $0.02572/share Final dividend for FY10 (ended 30Jun10). Feeling great!
Based on the last done share price of $0.445 (19Nov10), and assuming the same dividend payout - which is backed by Portek's stated 30% dividend payout policy - is sustained, current dividend yield now stands at 5.78%p.a.
Of course, I want to see Portek's business volume/revenue and profits - especially from the now established Port Operations & Management (POM)division - growing. As a sustainable business, the POM division should become even more valuable with time, and should enable Portek to pay out even higher dividends over time. Some day in the future, the POM division may well bring in a big sum if the right suitors appear again, or may itself qualify for a separate listing, as the long-term growth potential for ports in many under-served or lesser developed countries will exist for a long, long time to come.
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Ecuador: Portek Submits $100 million PPP Proposal to APM
http://www.dredgingtoday.com/2011/01/03/...al-to-apm/
Chanced upon this news. While nothing material is revealed, it does show that the Management is actively looking for opportunities to grow its port operating business in new countries. At the moment, Portek is trading at a dividend yield of 5.2%.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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