Profits at Coillte, the State-owned forestry company, fell 44 per cent to €19.65 million last year, mostly as a result of the implementation of an early retirement and voluntary redundancy scheme. Laura Slattery reports.
Some €10.5 million was set aside to cover the cost of a pension fund top-up and ex gratia payments made to 90 staff who will have left the company by the middle of this year.
A poor market for Christmas trees due to oversupply forced the company to write down its stock of trees by €4.3 million, while difficult start-up trading conditions at its housing joint venture, Griffner Coillte, led to an impairment provision of €3.25 million.
The group said its operating profits before these three exceptional items was €48.51 million, up 13 per cent on 2004. The net increase in the value of forests and land during the year was €26.8 million.
Coillte said the underlying business performance was strong with good contributions from its forestry, land development and SmartPly wood panel businesses.
The volume of logs sold increased by 3 per cent, but the margin on log sales fell by 4 per cent, continuing a recent downward trend that Coillte said remained a serious concern.
Coillte chief executive Martin Lowery said he expected log sales would be flat for the next 10-15 years. SmartPly, which manufactures oriented strandboard at Belview Port in Waterford for the Irish, European and US markets, increased sales last year, although prices were lower than in 2004.
Coillte has emerged as the preferred bidder for the Weyerhaeuser Europe plant in Clonmel, which would allow the group to enter the market for producing medium density fibreboard. The transaction is subject to due diligence, Weyerhaeuser and Coillte board approval and regulatory approval.
The group said it was a good year for its land development business, with waste management sites sold to Cork, Kerry and Wexford county councils and it also completed the sale of a major windfarm site in Kerry.
Mr Lowery said Coillte's objective was to develop into a balanced commercial enterprise, which included maximising the value of its land assets without compromising its core forestry programme.
