As the company does not have any right of first refusal (ROFR) on the port when it comes up for lease renewal, we have not built in any valuation upside from the renewal of the port back to GPPV. We use an average of book value and depreciated replacement value of the existing assets at the exit in 2028 to arrive at the terminal value. But if we consider depreciated replacement value of the existing assets at the exit in 2028, our target price would increase by around 6% to ~R78.5 per share.
The company had a good quarter with the Q1CY14 results beating consensus estimates led by better margins and realisations, which was partly also due to one-off reversal of discounts provided earlier in the year. Volumes were slightly below expectations led by muted bulk cargo volumes even as container cargo grew 16% y-y. The company has also started paying the full MAT tax rate beginning this quarter.