Estimating Annual Investment Returns from Industrial Planted Forests of Radiata Pine in New Zealand

David Evison

Journal of Forest Economics, 2022, vol. 37, issue 2, 185-198

Abstract: The purpose of this paper is develop an industry-level (average) estimate of annual investment returns from industrial planted forests in New Zealand, from publicly-available financial statement data. The research used data from seven New Zealand commercial forest-growing companies, for the period 2008 to 2018. These companies managed around 600,000 ha of planted forest (or about half of the industrial forest estate in New Zealand), and had a total asset value of approximately NZ 11 billion in 2018. The data were used to calculate an average industry-level estimate of annual investment returns, from 2009 to 2018. The calculated value is directly equivalent to the one-period internal rate of return and is separable into two components – cash return on assets and the real change in asset value. Since 2009, commercial forestry investment returns (unleveraged, pre-tax) have increased. The average investment return for 2009 to 2013 was 5.4%, while for 2014 to 2018 the average investment return was 14.7%. These returns are superior to returns from pastoral farming.

Keywords: Investment return; commercial forests; pastoral farming (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1561/112.00000544 (application/xml)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:now:jnljfe:112.00000544

Access Statistics for this article

More articles in Journal of Forest Economics from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().