Coillte has announced a reduction in operating profit from €63.3m in 2019 to €29m in 2020.
Last year, Brexit and COVID-19 combined to create uncertainty for the company, but the greatest turbulence was caused by a major shortfall in felling and road licence approvals by the Department.
This had serious repercussions not only for Coillte but also their sawmill customers, contractors and downstream industries.
Irish sawmills maintained that at one point in 2020, forestry licensing delays both for Coillte and private forest owners, had stalled the production of 1.1m cubic metres of wood, enough timber to build 50,000 new homes.
The situation began to ease by year end but expected Coillte annual log sales of 2.71m m3 were down by 400,000m3 compared with 2019.
This resulted in a shortfall of 230,000m3 due to sawmills and 170,000m3, which would have been processed by Coillte’s two board mills in Clonmel and Waterford Harbour.
Revenue fell from €327m in 2019 to €285m last year. Operating cash flow was €24m, down from €54.2m, while net debt at the end of 2020 was €28m.
“Despite the challenges we faced, Coillte delivered a solid financial performance in 2020, albeit below our original expectations,” said Bernie Gray, Coillte chair.
“A significant development in January of this year was approval by the Competition and Consumer Protection Commission for the establishment of the new renewable energy joint venture development company with the ESB,” she said.
Subject to shareholder consent, Coillte expects the new company to be operational this quarter.
Wood panel manufacturing
The company has also commenced investment in the €45m upgrade of its SMARTPLY wood panel manufacturing plant. Although borrowings of €28m were required in 2020, Imelda Hurley, Coillte’s chief executive said the company was in a solid position for 2021.
“While demand from our core UK and Irish markets is reasonably strong, forestry licensing issues – now primarily related to road permits – are still restricting supply,” she said.
“There is a level of optimism as society begins to reopen. Accordingly, Coillte is projecting that 2021 will be a year of recovery with a focus on continuing to keep all colleagues safe during the pandemic.”