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Forest Valuation
Evergreen's forests were independently valued at 30 June 1999 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 %
real price increase |
One % per annum
real price increase* |
Two % per annum
real price increase* |
| Eight per cent |
148.8 |
166.0 |
184.8 |
|
Nine per cent
|
129.9
|
144.3
|
159.9
|
|
Ten per cent
|
114.1
|
126.2
|
139.4
|
*per annum, over the ten-year period 2005 to 2015.
|
Log Prices Adopted in the 1999 Valuation
|
| In $NZ per m3 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
|
Pruned
|
164.90
|
172.50
|
182.50
|
182.50
|
180.50
|
177.50
|
|
Small pruned and high quality structural
|
116.74
|
127.76
|
132.34
|
130.90
|
127.95
|
126.45
|
|
Export A Longs
|
98.90
|
113.79
|
112.91
|
109.95
|
105.93
|
105.93
|
|
Export A Shorts
|
92.26
|
106.25
|
105.43
|
102.65
|
98.88
|
98.88
|
|
Export K Longs
|
69.46
|
78.48
|
80.25
|
85.09
|
83.44
|
84.98
|
|
Export K Shorts
|
64.92
|
73.42
|
75.09
|
79.66
|
78.10
|
79.56
|
|
Domestic structural
|
98.58
|
113.02
|
112.17
|
109.30
|
105.40
|
105.40
|
|
Domestic packaging
|
64.59
|
70.98
|
71.50
|
72.81
|
71.39
|
71.99
|
|
Domestic pulpwood
|
50.00
|
50.00
|
50.00
|
50.00
|
50.00
|
50.00
|
Note: Prices from 2006 onwards are the same as those shown for 2005.
|
Projected Available Harvest Volumes
|
| In 000m3 |
|
|
|
|
| Period |
Pruned logs
|
Sawlogs
|
Pulp logs
|
Total
|
|
2000 to 2004
|
279.4
|
647.3
|
387.4
|
1,314.1
|
|
2005 to 2009
|
188.6
|
642.8
|
361.2
|
1,192.6
|
|
2010 to 2014
|
186.3
|
488.9
|
258.6
|
933.8
|
|
2015 to 2019
|
258.8
|
797.3
|
276.6
|
1,332.7
|
|
2020 to 2024
|
865.6
|
1,913.2
|
750.8
|
3,529.6
|
|
2025 to 2029
|
370.1
|
1,568.3
|
346.4
|
2,284.8
|
|
Total
|
2,148.8
|
6,057.8
|
2,381.0
|
10,587.6
|
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Value Distribution by Age Class
|
| $NZ millions using nine % discount rate |
|
|
|
| Age |
Area in hectares
|
Value
|
%
|
|
0 to 4 years
|
7,172
|
13.5
|
10.4
|
|
5 to 9 years
|
2,062
|
10.1
|
7.8
|
|
10 to 14 years
|
1,756
|
14.1
|
10.9
|
|
15 to 19 years
|
1,676
|
12.4
|
9.5
|
|
20 years and over
|
5,526
|
79.8
|
61.4
|
|
Total
|
18,192
|
129.9
|
100.0
|
The tables on this page are sourced from Jaakko Pöyry Consulting forest valuation as at 30 June 1999.
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