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First figures from Foresight Forestry

221215 fsf

Foresight Sustainable Forestry has published results covering the period from its incorporation on 31 August 2021, through its listing on 24 November 2021, to 30 September 2022.The NAV per share at the end of the period was 105p, which it says means that it generated a total return of 5%, but the convention is to measure these things from the opening NAV after the issue expenses which we think was 98.15p, suggesting an NAV return of 7.0%.

The chairman’s statement says “The key driver of this gain was a 16.9% upwards revaluation of our afforestation sites, driven by rising prices for land suitable for afforestation development, securing of grants and planting permissions, and the completion of planting. Valuations for established forest properties have remained relatively muted during the period, reflecting relative softness in the timber market. The second half of the period has seen substantial investment into the afforestation assets as well as getting new debt and equity capital in place, and the related costs of that. We are very encouraged that the two afforestation properties that were planted during the period achieved a 42% valuation increase (contributing strongly to the overall uplift for afforestation assets) before any consideration of the value of voluntary carbon units.

With up to 25 further assets in the afforestation development pipeline due to reach the planted milestone in the next two financial years, we expect to see the hard work and capital investment continue to deliver development returns going forward. Recognition of the value of voluntary carbon credits in the company’s NAV is also an exciting development.”

“Over the course of 2022, we have seen a softening of timber prices due to additional supply caused by extreme weather events, such as Storm Arwen, and sawmill destocking driven by economic caution. As a result, we have delayed harvesting plans at a number of properties to ensure we maximise value by bringing the company’s timber to market when prices are more favourable in the future. Despite these partial delays, FSF harvested approximately 26,000 tonnes of sustainable timber in the period and, over the next five years, we expect to have in the region of 213,000 tonnes of fully FSC and PEFC certified timber available for harvest.”

FSF : First figures from Foresight Forestry

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