Coillte stockpiling in UK unit ahead of Brexit

State-owned forestry company Coillte has begun stockpiling wood in its UK operation so it can continue to serve British customers after Brexit.

Nearly 50% of revenues of Medite Smartply, Coillte’s MDF and oriented strand board/OSB wood products provider, are generated in the UK construction market.

Coillte, via Medite, operates two wood product warehouses in the UK.

It is stockpiling at both of these in order to allow for enough storage to give it numerous weeks breathing space to continue trading as normal after Brexit.

Medite grew its market sector and geographical spread last year.

However, Coillte’s acting chief executive Gerry Britchfield said the UK will remain a big market for the division as Britain will remain a large importer of wood after either a hard or soft Brexit.

On an overall basis, Coillte reported record earnings and revenues for 2018. 

Revenues jumped 10% to €330m and EBITDA of €115m marked a 35% increase.

The company will pay the Government a dividend of €15m for 2018, up by more than 87% on the €8m paid in respect of 2017.

Last year’s financial growth was partially driven by the sale of the bulk of Coillte’s wind farm assets to renewable energy company Greencoat Renewables and the sale of non-core land.

Coillte chair Bernie Gray said the company’s operating cash flow has increased from zero to €60m over the last four years and Coillte is now generating a cash yield of 4.6% on its €1.3bn net asset base.

The group has been aggressively reducing debt levels over the last number of years and this leaves us in a strong overall position to weather any Brexit impacts and to invest steadily in future growth opportunities.

“The transformation targets set by the management team four years ago have been exceeded and Coillte is now positioned as one of the best forestry and land solutions companies in Europe,” Ms Gray said.

The company’s net debt stood at €14m as of the end of last year.

Coillte will see an overhauling of its board at its agm later this year, with Ms Gray formally taking up the chairperson role and a new chief executive set to be formally appointed in the third quarter.

Outgoing chief executive Fergal Leamy officially leaves the company next month.

Mr Britchfield — currently acting CEO, chief operations officer and chief financial officer — has expressed his interest in assuming the chief executive’s role on a full-time basis.

Coillte also said it remains in exclusive talks with the ESB over the formation of a planned joint-venture targeting onshore wind farm development.

The €1bn development plan envisages wind turbines on 30 sites across Coillte’s landbank, producing one gigawatt of power or enough energy to power around 700,000 homes by 2030.

The deal is expected to be concluded by the end of next month.

The two companies have successfully collaborated on a range of renewable energy projects since 2003.

Coillte’s renewable energy ambitions purely relate to development and land ownership and not to be an active utility company.

To that end, it will sell out of the project once the development is complete.

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