DCF Studio

    POT.NZ · NZE · Industrials

    Port of Tauranga Limited

    Also onConsensus Drift

    Implied value per share

    NZD 1.70

    Market price

    NZD 8.23

    Implied upside

    -79.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    Current EV/EBITDA of 28.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    NZD 1.70-79.4%
    Exit multiple
    NZD 4.56-44.5%
    Market price
    NZD 8.23

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m61m121mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 439.0mNZD 443.9mNZD 448.9mNZD 453.9mNZD 458.9m+1.1%
    EBITNZD 167.6mNZD 169.5mNZD 171.4mNZD 173.3mNZD 175.2m+1.1%
    NOPATNZD 123.6mNZD 124.9mNZD 126.3mNZD 127.7mNZD 129.2m+1.1%
    Add depreciation & amortisationNZD 43.9mNZD 44.4mNZD 44.9mNZD 45.4mNZD 45.9m+1.1%
    Less capital expenditureNZD -51.7mNZD -52.3mNZD -52.9mNZD -53.5mNZD -54.0m+1.1%
    Less increase in working capitalNZD 183.5kNZD 185.5kNZD 187.6kNZD 189.6kNZD 191.8k-1.1%
    Free cashflow to firmNZD 116.0mNZD 117.3mNZD 118.6mNZD 119.9mNZD 121.2m+1.1%
    Discount factor0.96250.89150.82580.76500.7086-
    Present valueNZD 111.6mNZD 104.5mNZD 97.9mNZD 91.7mNZD 85.9m-6.3%
    Present Value Of The ForecastNZD 491.6m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%NZD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.597Reported 0.399, pulled toward 1.0 (Blume)
    Cost of equity8.38%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationNZD 5.6bn91.6% of capital
    Total debtNZD 516.5m8.4% of capital, book value as a proxy
    Tax rate26.3%Effective, capped at statutory
    WACC7.95%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareNZD 1.70

    71% of EV

    Forecast FCFF, final year
    NZD 121.2m
    Capex at depreciation, working capital in reinvestment
    NZD 129.2m
    Less reinvestment at g/ROIC (31.4% of NOPAT)
    NZD -40.6m
    Capitalised
    NZD 88.6m
    ROIC (WACC floor)
    8.0%
    Terminal value, undiscounted
    NZD 1.7bn
    Terminal value, discounted
    NZD 1.2bn
    Enterprise value
    NZD 1.7bn
    Less net debt
    NZD 514.8m
    Equity value
    NZD 1.2bn

    Exit at 20.0x EBITDA

    Value per shareNZD 4.56

    86% of EV

    Terminal value, undiscounted
    NZD 4.4bn
    Terminal value, discounted
    NZD 3.1bn
    Enterprise value
    NZD 3.6bn
    Less net debt
    NZD 514.8m
    Equity value
    NZD 3.1bn

    Spread between methods: 92%.

    Sensitivity

    Value per share (NZD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.95%2.492.502.512.532.54
    6.95%2.032.042.052.062.07
    7.95%1.681.691.701.711.71
    8.95%1.411.421.431.431.44
    9.95%1.201.201.211.221.22

    Outlined: this model. Green text: above today's price of 8.23. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year1.1%34.3%+33.2pp
    Discount rate8.0%3.4%-4.6pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.