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Forest Valuation
Evergreen’s forests were independently valued at 30 June 2001 by
Jaakko Pöyry Consulting (Asia-Pacific) Limited. The net present value,
or “expectation value”, approach was used, whereby projected
future net cash flows were discounted to provide a current market value
of the collective forest and land resource. An estimate of the land value
was then subtracted to provide a value of the tree crop.
The following process was adopted in the valuation methodology:
- A stand-based approach was employed whereby
stands are scheduled to be harvested at or near their optimum economic
rotation age.
- The cash flows are those arising from the
current rotation of trees only. No account was taken of revenues or
costs from re-establishment following harvest, or of land not yet planted.
- The cash flows do not take into account
income taxation.
- No allowance for inflation was provided.
Future revenues and costs were expressed in current dollar values.
EFFECT
OF REAL PRICE INCREASE AND DISCOUNT RATE ASSUMPTIONS
Forest crop valuations assuming three annual real price increase scenarios:
In $NZ millions |
|
Discount Rate
|
Nil%
Per Annum
Real Price
Increase*
|
One
%
Per Annum
Real Price
Increase*
|
Two
%
Per Annum
Real Price
Increase*
|
| Eight
per cent |
179.2
|
203.4
|
229.5
|
| Nine
per cent |
157.4
|
178.0
|
200.3
|
| Ten
per cent |
139.0
|
156.6
|
175.7
|
| *Over
the ten-yearperiod 2006 to 2016. |
LOG
PRICES ADOPTED IN
THE 2001 VALUATION
In $NZ per m3 at wharf gate/at mill gate |
| |
2002
|
2003
|
2004
|
2005
|
2006+
|
| Pruned
– P1 Sawlog |
174.00
|
174.00
|
174.00
|
174.00
|
174.00
|
Pruned
– Small Pruned
& High Quality Structural |
136.00
|
136.00
|
136.00
|
136.00
|
136.00
|
| Export
– A Grade Longs |
114.00
|
113.00
|
115.00
|
115.00
|
114.00
|
| Export
– A Grade Shorts |
92.00
|
92.00
|
94.00
|
94.00
|
93.00
|
| Export
– K Grade Longs |
72.00
|
74.00
|
76.00
|
79.00
|
81.00
|
| Export
– K Grade Shorts |
50.00
|
53.00
|
55.00
|
58.00
|
60.00
|
| Domestic
– S1/S2 |
94.00
|
92.00
|
94.00
|
95.00
|
97.00
|
| Domestic
– Packaging |
73.00
|
72.00
|
71.00
|
71.00
|
71.00
|
| Domestic
– Pulpwood |
50.00
|
50.00
|
50.00
|
50.00
|
50.00
|
| Note:
Prices from 2007 onwardsare the same as those shown for 2006. |
| PROJECTED
AVAILABLE HARVEST VOLUMES IN ,000M3 |
| Period |
Pruned
Logs
|
Sawlogs
|
Pulp
Logs
|
Total
|
| 2002-2006 |
314
|
916
|
402
|
1,632
|
| 2007-2011 |
239
|
1,111
|
447
|
1,797
|
| 2012-2016 |
247
|
978
|
418
|
1,643
|
| 2017-2021 |
370
|
1,480
|
491
|
2,341
|
| 2022-2026 |
909
|
3,163
|
870
|
4,942
|
| 2027-2030 |
220
|
380
|
99
|
699
|
| Total |
2,299
|
8,028
|
2,727
|
13,054
|
| VALUE
DISTRIBUTION BYAGE CLASS $NZ MILLIONS USING 9% DISCOUNT RATE |
| Age |
Area
in
Hectares
|
Value
|
%
|
| 0
to 4 years |
2,884
|
$1.8
|
1%
|
| 5
to 9 years |
6,958
|
$26.2
|
16%
|
| 10
to 14 years |
2,672
|
$20.1
|
13%
|
| 15
to 19 years |
2,890
|
$28.1
|
18%
|
| 20
to 24 years |
3,110
|
$37.0
|
24%
|
| 25
years and over |
2,686
|
$44.2
|
28%
|
| Total |
21,200
|
$157.4
|
100%
|
The
tables on this page are sourced from the Jaakko Pöyry Consulting forest
valuationas at 30 June 2001.
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to Annual Reports
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