Semi-state forestry company Coillte has reported pre-tax profits of €122 million on a turnover of €478 million last year, which is down from €134 million in 2021 due to increased operating costs.

The company’s turnover reached new highs having increased from €422 million in 2021. Operating cash flow rose from €73 million in 2021 to €107 million last year.

Growth in the construction sector meant strong demand for product in the first half of 2022, however, demand moderated significantly in the second half of the year, Coillte said.

In combination with “relatively solid pricing” this resulted in an “overall strong financial performance” in 2022, the company, which expects a “more challenging” 2023, said.

Last year, the semi-state forestry company planted over 20 million trees and replanted 8,300ha of forests, according to its annual report for 2022.

Coillte chair, Bernie Gray said the company’s “strong financial underpinning” is important as the organisation is “repositioning itself” to deliver on its role in achieving national climate targets. 

Coillte annual report

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) were at €157 million last year which was broadly in line with the record level achieved in 2021, Coillte said.

The company has recommended an overall dividend payment of €27.7 million to the state which represents the second highest dividend in the history of Coillte, according to its annual report.

Chief executive, Imelda Hurley said Coillte had a strong financial performance in 2022 despite end market prices for wood and panel board products being down on 2021 record levels. 

Commenting further, Hurley said: “Prices remained relatively strong in the first half of the year with robust demand evident in the construction and home improvement sectors. 

“There was also a global demand and supply imbalance which created a series of supply challenges in key markets. 

“In addition, recent inflationary pressures had a material adverse impact on Coillte’s cost base as many of our key input costs are closely correlated to movements in gas or oil prices.”

Although the long-term demand is expected to grow for wood-based products, the general market environment for 2023 is challenging, the company said.

High inflationary pressures across Coillte’s core markets are expected to persist for much of 2023, and rising interest rates are likely to result in lower disposable incomes.

These factors, the company said, are expected to weaken consumer demand. Against this backdrop, Coillte is focusing on optimising its production volumes while managing the cost base.