Tornator Oyj Stock Exchange Release 15 September 2020 at 09:00 a.m.
Fair value of Tornator's Finnish forests increases by EUR 184 million
Fair value (IFRS) of Tornator's Finnish forests will increase by EUR 184 million. The company owns an area of approximately 633,000 hectares in Finland, with a balance sheet value of approximately EUR 1,480 million (biological assets) in the financial statements at 31 December 2019 and approximately EUR 1,664 million after the valuation update, i.e. approximately EUR 2,630 per hectare. The fair value is determined by an external evaluator Indufor Oy.
The increase in the fair value of forests is mainly due to an update of the parameters used in the valuation model. Harvesting income and silviculture costs relating to currently standing trees were updated. In addition, the purchases of new forests increase the balance sheet value of Tornator’s Finnish forests.
Tornator continues to use the discounted cash flows method to value its forests. The real discount rate used to discount future cash flows remained unchanged at 3.25%.
The more detailed accounting principles for the fair value of the forest are described in the notes to the company's financial statements for 2019 under accounting principles for consolidated financial statements and accounting policies that require management judgement.
The increase in the fair value of forests will significantly improve the 2020 income measured at fair value but will have no cash flow effect in 2020.
For further information, please contact:
CEO Henrik Nieminen, tel. +358 40 869 7613
CFO Antti Siirtola, tel. +358 40 773 0975
Tornator is a leading company specialised in sustainable forestry in Europe. It owns forests in Finland, Estonia and Romania. In 2019, the Group’s net sales were some €106 million, and the balance sheet value was about €1.8 billion. The Group has around 180 employees. Tornator's own employees, and other companies and their employees working on its forestland, add up to around 1,000 person/years of employment. The owners of the parent company are Finnish, mainly institutional investors. Tornator's mission is to generate sustainable well-being from forests.