Coillte reports eightfold jump in profit amid strong demand for logs

FORESTRY company Coillte has reported an eightfold jump in its profits, from €4.2 million in 2009 to €32.1m in 2010.

The state-owned commercial enterprise yesterday unveiled an annual report with turnover up 21% to €250.4m, revenue of €7.9m from new products, and EBITDA up 19% to €65.6m. The group also reduced its net debt by €26.8m to €150.6m.

Coillte’s annual report said this growth was largely driven by strong demand and prices for logs sold to sawmills and higher prices for panel board products. The main challenges it foresees are market uncertainty, sterling weakness and price volatility.

Coillte chief executive David Gunning said: “Construction sawn-wood exports from Irish sawmills have risen from approx 5,000m³ at the start of 2009, to an estimated 200,000m³-plus for 2010 and Irish sawmills now have a 7% share of the UK market.

“Sales were up 8% in Coillte Panel Products, with SmartPly OSB achieving price increases. In renewable energy we completed construction of the Garvagh Glebe Wind Farm in Co Leitrim, a joint venture with ESB Power Generation and secured planning permission for two further projects in Co Wicklow and Co Galway.

“We have also been driving innovation to create new value added products and have had a relentless focus on costs across all our businesses. In 2010 we generated €7.9m in revenue from new products, exceeding the target we set ourselves.”

Coillte increased its capital expenditure programme in 2010 by 12% to €45.5m. Over 70% (€33.4m) of this was invested in replanting forests, ensuring the future of the forest resource and enhancing and maintaining the forest estate. Coillte continued to invest in telecom mast sites and in developing its renewable energy strategy during 2010 and will continue to be active in these areas.

Having secured planning permissions for projects in Co Wicklow and Co Galway, seven other renewable energy projects are currently at various stages of planning.

Coillte also completed construction of over 100 telecommunication masts, working in partnership with telecoms operator 3 on the rollout of the National Broadband Scheme.

Coillte Panel Products, manufacturers of SmartPly OSB and Medite MDF, increased prices across some of its product range and exported significant volumes of material. Overall sales volumes were up 8% on 2009.

The group secured planning permission to facilitate reinvestment in the SmartPly panel mill in Waterford port and has developed a new business model that will increase the product range to meet more demanding customer requirements. In Medite a number of investments were completed that improved product quality and lowered input costs.