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Kangaroo Island timber valued at $107m

As part of its end of financial year reporting duties, Kangaroo Island Plantation Timbers (KIPT) has sought a revaluation of its standing timber. Source: Timberbiz

The company owns 86% of the plantation timber on Kangaroo Island – pine and bluegum – the majority of which is ready for harvest.

It first valued the standing timber at June 30, 2017, as the probability of the construction of its Kangaroo Island Seaport export facility became more likely than not. It then valued its timber at $80.9 million.

The Board determined that approval for the proposed KI Seaport was more probable than not and so the timber should be valued upon this basis.

At 30 June 2018, the Board has adopted a standing timber valuation that uses timber prices approximately 5% below current headline prices, a forward USD/AUD exchange rate of 0.79 and a real discount rate of 11.65% per annum.

The value adopted for standing timber is $107.8 million, an increase of $26.9 million over the corresponding 2017 valuation. The increase has largely been driven by strengthening prices for hardwood chip and softwood logs.

In a release to the ASC the company said that it believes that information about the carrying value of its standing timber assets may be considered market sensitive and so has made this announcement in anticipated release of its preliminary final report due around 31 August 2018.

In its evaluation of the assets the Board considered independently conducted inventory measurement and valuation analysis.