Coillte profits close to €18.74m but hit by budget cutbacks
The group’s annual results showed it performed solidly in most areas with increased log sales, improved performance at oriented strand board manufacturer SmartPly Europe and good results in its land-based businesses.
But it was a difficult year for the company’s forestry services, responsible for tree planting, and nurseries, both of which were severely affected by the Government cutbacks announced last November.
Total log sales revenue by Coillte Forest increased by 9%, however, due to a record level of sawlog volume sold and an increased volume of pulpwood sold.
This is a reflection of strong demand especially for construction timber, and increased demand from SmartPly, where pulpwood intake increased by 48%.
However, the benefit of higher volume sales was offset by depressed sawlog prices, a change in the product mix sold and increased costs.
According to Coillte chief executive Martin Lowery future demand for logs is underpinned by significant investment in modern, competitive sawmilling and panel board processing capacity.
During 2002, Coillte assumed 100% ownership of SmartPly Europe Ltd. It has a strong market position in Ireland and Britain and demand is continuing to grow at about 30% per annum in Europe.
However, the business continues to be loss making, due to overcapacity in Europe, but losses were halved in 2002. Coillte has to account for 100% of these losses since the date of acquisition, May 1, 2002, compared to 35% in prior years.
Coillte said it is confident further progress will be made in 2003 towards moving this business into profit.
Performance varied in 2002 across Coillte Enterprises, which manages non-forestry businesses. Significant progress was made in the group’s land-based businesses.
Co-development agreements were completed with four significant participants in the wind energy sector leading to the potential development of windfarms on Coillte land.
