State forestry agency Coillte has recommended a €30 million dividend payment to the exchequer, the highest in the company's history.
It follows record revenues in 2021, driven by a combination of “exceptional global demand” for sawn wood and timber products. Financial results for the year, published on Friday, reported an operating profit of €124 million compared to €29 million in 2020.
Earnings before interest, taxes, depreciation, and amortisation (ebitda) came in at €159 million, well ahead of 2020’s €66 million. Revenues stood at a record €422 million, up from €285 in 2020, and operating cash levels were €73 million, up from €24 million.
However, the company said the geopolitical situation caused by the war in Ukraine has quickly emerged as a defining feature of 2022, with "wide-ranging impacts" already evident.
"During 2021, end-market prices for timber and panel board products reached record levels, driven by high demand in the construction and home improvement sectors," said chief executive Imelda Hurley. "Pricing was also influenced strongly by a global supply and demand imbalance which created a series of supply challenges in key markets.
“When taken together, these factors resulted in Coillte achieving a record financial performance.”
Sustainability
With environmental issues expected to amplify the need for timber in the coming years, Coillte is pushing its recently launched Forestry Strategic Vision which it says will play a key role in the supply of sustainably produced products.
Other progress reported during the year included the planting of 21 million trees across 9,000 hectares of restocked forest, and a €45 million upgrade of Smartply's drying plant. The Nature Partners not-for-profit was launched to create native woodlands at scale across Ireland.
Much of the company's outlook is based in environmental ambition. Coillte chairwoman Bernie Gray noted plans to enhance and restore biodiversity, and to provide recreational spaces for visitors in its forests.
“Our vision is designed to result in the potential capture of 28 million tonnes of CO2 from the environment by 2050,” she said.
While 2021 proved a record year, challenges remain. Alongside the unpredictable effects of the war in Ukraine, Coillte’s outlook acknowledged that a high inflationary environment on its cost base was of significant concern.
“The company anticipates that its financial returns in 2022 will reflect a material reduction on the record high levels achieved in 2021,” it said.
