Coillte reports €4.2m profits

Coillte, the Irish state forestry to timber and wood panels operation, reported profits down more than 50% at €4.2m in 2009 due to the “stagnation” of European wood markets. But its promotional campaign for Irish timber in the UK led to a 5% increase in log sales to 2.4 million m³. Panel product sales in the market also rose, despite the construction downturn.

The recession also saw Coillte’s overall turnover last year fall by around 17% to €249m.

Besides the general market downturn, Coillte chief executive David Gunning said the organisation was hit by the fall in timber prices and the weaknesss of sterling, which both dented margins.

But he said that Coillte had also taken steps “to respond to these challenges”. These included cutting costs by a total of €24m. This was achieved through short-time working, 95 voluntary redundancies and a reduction in energy and resin spending. The organisation also refinanced and sold immature timber operations to two unit trusts, netting €33.8m.

Coillte’s panels business, including the SmartPly and Medite MDF operations, was also restructured. Its sales to the UK for the year were a record, with the increase attributed to a combination of greater market share and plywood substitution.

“The group also continued to introduce new products, and successfully launched SmartPly SiteProtect,” said Mr Gunning in his results statement.

Looking ahead, he predicted that the market would remain challenging for Coillte and its customers.

“The group will continue to take further action to ensure the financial stability of the business, while also making targeted capital investments in our forest, panel products land and rewnewable energy businesses, where we feel there is potential to create future value,” he said.