ICTSI to take majority stake in Indonesian terminal

LISTED port operator International Container Terminal Services, Inc. (ICTSI) announced on Wednesday that it had signed a purchase deal to acquire majority ownership in a multi-purpose terminal in East Java, Indonesia.

The company signed on July 27 a conditional share subscription and purchase agreement with Indo Port Holding Pte Ltd. and Eastlog Holding Pte Ltd. to acquire majority ownership in PT East Java Development, the global port operator said in a disclosure to the stock exchange.

“This transaction is expected to generate synergies and value-accretive returns for ICTSI’s shareholders,” the company added.

With 47 years left in its concession, PT East Java Development holds the rights to a multi-purpose terminal in Lamongan Regency, East Java.

The number of shares to be acquired is one million for $46.5 per share.

“The amount of the consideration was negotiated and determined based on a discounted cash flow method,” ICTSI said.

“The purchase price will be paid in cash in multiple tranches over the next year,” it added.

The company announced recently that it ranked eighth among global terminal operators in terms of equity TEU (twenty-foot equivalent unit).

In 2021, ICTSI’s consolidated throughput increased by 10% to 11.1 million TEUs as a result of the reopening of markets and improvements in trade amid the global health crisis.

The listed port operator saw a 58% growth in its first-quarter attributable net income to $142.3 million from $90.1 million in the same period a year earlier.

The company’s revenue rose by 21% to $528.3 million, while its EBITDA — or earnings before interest, taxes, depreciation, and amortization — increased by 28% to $337.9 million.

ICTSI shares closed 0.43% higher at P185 apiece on Wednesday. — Arjay L. Balinbin