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Forest Valuation
Evergreens 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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