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Forest Valuation
Evergreen’s forests were independently valued at 30 June 2003 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 currect 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 revenue or costs from re-establishment following harvest,
or of land not yet planted.
- The cash flows
have been derived on a pre-tax basis. The impact of income taxation
is recognised in the transaction implied discount rate.
- The cash flows
have been prepared in real terms, excluding the effects of inflation.
The tables on this
page are sourced from the Jaakko Pöyry ConsultingForest Valuation as at
30June 2003.
EFFECT OF LOG PRICE ASSUMPTIONS ON TREE CROP VALUE -
NZ$ M
| DISCOUNT RATE
- APPLIED TO REAL PRE-TAX FLOWS |
REAL
ANNUAL CHANGE IN
LOG PRICE - 2008 TO 2018 |
| |
0%
|
1%
|
2%
|
|
VALUE
- $NZD M
|
| 8% |
161.4
|
184.3
|
208.8
|
| 9% |
141.9
|
161.6
|
182.8
|
| 10% |
125.3
|
142.3
|
160.6
|
RADIATA PINE LOG PRICES
ADOPTED IN THE JUNE 2003 VALUATION - NZ$/M3 AWG/AMG
| LOG GRADE |
2003
ACTUAL PRICES RANGE
|
PRICES
APPLIED
DURING YEAR ENDING
30 JUNE
|
| |
|
2004
|
2005
|
2006
|
2007
|
2008+
|
| Pruned – P1 Sawlog |
139
- 183
|
166
|
169
|
171
|
174
|
176
|
| Pruned – Small
Pruned and High Quality Structural |
104
- 118
|
125
|
127
|
129
|
131
|
132
|
| Export – A |
66
- 88
|
82
|
85
|
88
|
92
|
95
|
| Export – K |
60
- 83
|
68
|
71
|
74
|
76
|
79
|
| Domestic – S1/S2 |
88
- 93
|
89
|
89
|
90
|
91
|
92
|
| Domestic – Packaging |
51
- 74
|
68
|
69
|
70
|
72
|
74
|
| Domestic
Pulpwood |
41
- 51
|
48
|
48
|
48
|
48
|
48
|
Note:
Prices from 2008 onwards are the same as those shownfor 2008. AWG –
at wharf gate, AMG – at mill gate. PROJECTED
AVAILABLE HARVEST VOLUMES
| PERIOD (IN 000M3) |
PRUNED
LOGS
|
SAWLOGS
|
PULP
LOGS
|
TOTAL
|
| 2003-2007 |
230
|
1,017
|
393
|
1,640
|
| 2008-2012 |
205
|
1,178
|
447
|
1,830
|
| 2013-2017 |
254
|
1,220
|
423
|
1,897
|
| 2018-2022 |
624
|
2,184
|
714
|
3,522
|
| 2023-2027 |
544
|
2,048
|
499
|
3,092
|
| 2028-2031 |
164
|
445
|
122
|
731
|
| Total |
2,021
|
8,093
|
2,598
|
12,712
|
VALUE DISTRIBUTION
BY AGE CLASS
| AGE
AT 30 JUNE 2003 |
STOCKED
AREA HA
|
TREE
CROP VALUE $NZD M
|
PROPORTION BY VALUE
|
| 0-4
years |
1,910.8
|
1.7
|
1%
|
| 5-9
years |
7,417.7
|
28.6
|
20%
|
| 10-14
years |
2,960.2
|
19.9
|
14%
|
| 15-19
years |
2,528.2
|
22.5
|
16%
|
| 20-24
years |
2,206.0
|
26.5
|
19%
|
| 25
years and over |
3,406.1
|
42.7
|
30%
|
| Total |
20,429.0
|
141.9
|
100%
|
The tables on this
page are sourced from the Jaakko Pöyry Consulting Forest Valuation
as at 30 June 2003.
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