Coillte delivers strong 2019 results but warns on Covid-19 and timber availability
Irish state forester Coillte has posted strong 2019 financial results but warned that Covid-19, issues with approving felling licences and Brexit are impacting timber availability and economic performance this year.
Coiltte’s earnings before interest, tax, depreciation and amortisation (EBITDA) were €102.8m in 2019 (2018: €115m) from revenues of €327.4m (2018: €330.3m). Operating cash flow was €54.2m while a zero net debt was recorded at the end of 2019 for the first time in Coillte’s history. Operating profit hit €63.3m (2018: €71.5m).
Coillte said the strength of the underlying 2019 financial performance is demonstrated by the fact that it had to deal with increased market turbulence in the second half of the year and additionally, a reduction in recurring EBITDA and operating cash of €7m which arose directly as a result of the sale of the majority of Coillte’s operating wind farms in 2018.
Some 22 million trees were planted across 9,000 hectares of restocked forest.
But Coillte warns that the market environment in 2020 is and will continue to be challenging. Covid-19 , it said, would have a significant impact on its business for at least the current year.
“We are also being impacted by a slowdown in the approval of forestry felling licences as a result of new procedures introduced by the Department of Agriculture, Food and the Marine in 2019 and these have, to date, impacted on the availability of timber that we can place on the market through auction,” said Imelda Hurley, Coillte’s chief executive.
“In addition, with the largest market for Irish sawnwood and timber products being the UK, the UK’s future trading arrangements with the EU are an important and as yet unknown variable which may impact the 2020 market dynamics towards the latter part of the year. As a result of these challenges we are projecting a significantly weaker financial performance in 2020 compared to 2019.”
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