A revaluation of Holmen’s forests holdings is to boost the company’s fourth quarter operating profits by SKr3.6bn (US$518m).
The revaluation is based on a new harvesting plan and on changed assumptions regarding future price and cost development, particularly the view that the price and demand for sawn timber and energy wood will continue to increase.
Holmen’s new harvesting plan, based on an inventory of forest holdings, shows that harvesting can be increased by almost 20% over the next 10 years as a result of active silviculture and a better age structure.
“This is a much larger increase than in previous assessments,” Holmen said. “Even in the periods after the next 10 years, it is estimated that harvesting will be considerably higher than in the old harvesting plan.”
The volume of wood in its forests is also expected to grow by 40% over the next 40 years, despite the increased harvesting rate.
“The rapid price rises of recent years have been driven by strong demand from the sawmills plus greater use of wood for energy production,” said Magnus Hall, president and CEO of Holmen.
“Viewed over a longer timeframe, wood prices have risen in line with inflation. The new valuation is based on the view that the forest is an asset that will increase in value over time.”
Holmen has 1.3 million ha of land, of which 1 million ha is productive forest land.
