Terms and queries about investing in forestry
When the Financial Statements are prepared each year, an update is made to an investment's Indicative Value at Balance Date (for a typical share unit of 200 shares). An update to the Indicative Value may also be provided in the Investment Report prepared when a client is selling their Forest Enterprises shares. If you have [...]
With many of our forest investments approaching harvesting age, this question from investors is understandable because it is an indication of when to expect investment returns. Indicative harvest dates have been reported each year in the investment’s annual Financial Report, reflecting the expectations in the original Prospectus to harvest exactly at tree age 28 years. [...]
Closer to harvest and when the harvest plan for your investment forest has been communicated with investors, we produce an updated Cashflow Projection for your investment based on the latest available log price series, latest cost estimates, the mix of hauler vs ground-based logging operations, and the pre-harvest inventory of your forest's log grade mix. [...]
Income earned by the limited partnership in a tax year, such as from harvest, is taxable at the investor level. This taxable income (or loss) is noted on your annual Tax Details Statement. Broadly speaking, taxable income is calculated on investment income (e.g. log sales) less expenses (e.g. road building, replanting) for the year. Investors [...]
An updated Cashflow Projection is included each year in the investment’s Financial Report. The cashflow will include the projected income and expenses for each year until the conclusion of the investment, and will therefore show if any income is expected for the coming year. If you have shares in a Forest Enterprises Limited Partnership investment, [...]
Payments to investors from harvest cashflow will occur when surplus funds allow, and will be regular throughout the harvest programme. There are no set dates or amounts but we aim for quarterly payments of an economic amount. We will advise investors if any upcoming distributions in the harvest reports. These are cash payments and tax [...]
Building harvest infrastructure - roads and landings (log processing areas) - is a significant but necessary expense required to access, harvest and remove the valuable timber in your forest. Roads are built throughout the harvest programme, but the primary outlay occurs during the early stages to establish the network, with maintenance generally occurring as harvest [...]
The areas harvested will be replanted the following winter, so that at the conclusion of harvest, most (if not all) of the land will have been replanted. When the harvest is complete, the investment must be brought to a conclusion. Towards the end of the harvest programme, a decision is made whether or not to [...]
During the late 1970s and early 1980s, the annual planting rate in New Zealand was between 50,000 and 60,000 hectares, a level to which we only returned in 1993. As the total forest estate increases, production will also increase, however New Zealand’s contribution to the world market is very small and represents only a fraction [...]
Yes, it will. The figures set out in the information you received when first investing with Forest Enterprises are projections based on a number of assumptions and the actual costs at that time. Even with low inflation, costs will increase. All factors being equal, what you will pay in the future will represent the same [...]