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SUPPLEMENTARY FOREST INFORMATION
FOREST VALUATION
Evergreen’s forests were independently valued at 30 June 2004 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 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 transaction-implied discount rate.
- The cash flows
have been prepared in real terms, excluding the effects of inflation.
xxForest 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.
EFFECT OF LOG PRICE ASSUMPTIONS ON TREE CROP VALUE -
NZ$ M
| DISCOUNT
RATE - APPLIED TO REAL PRE-TAX CASH FLOWS |
REAL
ANNUAL CHANGE IN LOG PRICE -2010 TO 2017
|
|
-2%
|
-1%
|
0%
|
1%
|
2%
|
|
VALUE
-$NZD M
|
| 9% |
88.7
|
111.11
|
136.14
|
164.34
|
196.21
|
| 10% |
79.64
|
98.80
|
120.21
|
144.38
|
171.59
|
| 11% |
71.69
|
88.08
|
106.55
|
127.30
|
150.64
|
RADIATA PINE LOG PRICES ADOPTED IN THE JUNE 2004 VALUATION - NZ$/M³
AWG/AMG
|
LOG
GRADE
|
JAN-MAR
2004
ACTUAL
PRICES RANGE
|
PRICES
APPLIED
DURING
YEAR
ENDING
30 JUNE
|
|
2005
|
2006
|
2007
|
2008
|
2009+
|
|
Pruned
|
120
- 144
|
146
|
153
|
161
|
166
|
170
|
|
High
Quality Unpruned
|
88
- 112
|
107
|
112
|
118
|
118
|
118
|
|
Export
– A
|
71
- 88
|
82
|
88
|
92
|
94
|
94
|
|
Export
– K
|
59
- 77
|
70
|
74
|
79
|
82
|
82
|
|
Domestic
– S1/S2
|
75
- 92
|
87
|
89
|
89
|
89
|
89
|
|
Industrial/Packaging
|
59
- 73
|
63
|
67
|
72
|
74
|
74
|
|
Pulpwood
|
39
- 49
|
45
|
45
|
45
|
45
|
45
|
AWG – at wharf gate,
AMG – at mill gate.
PROJECTED AVAILABLE
HARVEST VOLUMES - IN 000M³
| PERIOD |
PRUNED
LOGS
|
SAWLOGS
|
PULP
LOGS
|
TOTAL
|
| 2005-2009 |
238,871
|
1,261,242
|
486,906
|
1,987,019
|
| 2010-2014 |
196,626
|
1,029,734
|
389,626
|
1,615,986
|
| 2015-2019 |
342,758
|
1,325,359
|
436,201
|
2,104,318
|
| 2020-2024 |
676,582
|
3,147,253
|
851,150
|
4,674,985
|
| 2025-2029 |
194,854
|
1,229,900
|
281,758
|
1,706,512
|
| 2030-2034 |
52,491
|
143,797
|
44,808
|
241,096
|
| Total |
1,702,182
|
8,137,285
|
2,490,449
|
12,329,916
|
VALUE DISTRIBUTION
BY AGE CLASS
| AGE AT 30 JUNE
2004 |
STOCKED
AREA
HA
|
TREE
CROP VALUE
$NZD M
|
PROPORTION
BY VALUE
|
| 0-4 years |
2237.4
|
0.1
|
0%
|
| 5-9 years |
6955.8
|
25.2
|
21%
|
| 10-14 years |
2820.6
|
15.5
|
13%
|
| 15-19 years |
2492.0
|
21.5
|
18%
|
| 20-24 years |
1911.5
|
21.4
|
18%
|
| 25 years and
over |
3044.1
|
36.5
|
30%
|
| Total |
19461.4
|
120.2
|
100%
|
The tables on this
page are sourced from the Jaakko Pöyry Consulting Forest Valuation
as at 30 June 2004.
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