Coillte Announces €4.2 million Profit
o Profit in 2009 €4.2 million, down from €9.2m in 2008
o Turnover was €206.9m in 2009, compared to €249m in 2008
o Operating costs reduced by €24m
o Increased sales of timber and panel products in UK, despite difficult
environment
Dublin, 28th April 2010: Coillte today announced profits of €4.2 million for 2009, as the construction sector in Ireland, the United Kingdom and continental Europe stagnated, with prices weak across all markets. However, the Group took a number of steps to respond to these challenges and ensure delivery of its strategy.
As a result of the targeted promotion of Irish timber in the UK, Coillte boosted demand for logs substantially in the second half of the year. Coillte Forest sold 2.4m m3 of logs, a 5% increase on 2008, despite the difficulty in the construction sector. However, prices were on average 20% lower than in 2008. Ongoing sterling weakness during 2009 continued to have a significant negative impact on net profit.
Coillte reduced operating costs by a total of €24m across the Group through a combination of cost control measures, including 95 voluntary redundancies and short time working, coupled with reductions in areas such as electricity and resin costs that came from lower levels of output. Reducing costs further will remain a focus in 2010.
The Group successfully refinanced its business for the medium term and in response to demand, sold immature timber to two unit trusts, bringing in €33.8m to strengthen the balance sheet.
During 2009 Coillte restructured its panels business to take advantage of synergies in its two operating plants and better position the business to benefit from growth opportunities as the market recovers. Despite the difficult trading environment, record sales volumes were delivered into the biggest market, the UK, through a combination of increasing market share and plywood substitution. The Group also continued to introduce new products and successfully launched SmartPly SiteProtect, an external hoarding product.
Property sales and development saw a significant reduction in the number of transactions and prices achieved, relative to previous years. However, Coillte made significant progress in relation to its strategic objective to add value to its land assets. The sale of its Knockacummer wind farm site in Co. Cork was completed during the period. Substantial progress was made on Coillte's first joint venture wind farm project with Hibernian Wind Power at Garvagh Glebe in County Leitrim. Work was also advanced on developing the pipeline of wind energy projects which will deliver significant revenue in the next five years.
Coillte grew its telecommunications mast business in 2009 working in partnership with telecoms operator "3" on the rollout of the National Broadband Scheme. Coillte is investing €4m in building 100 mast sites as part of this project, a third of which were completed in 2009.
Commenting on the performance Chief Executive David Gunning said:
"2009 was a challenging year for Coillte, with price and margin pressures evident in all our businesses. In response we took decisive action, working with our sawmill customers to increase their exports into the UK; we boosted sales of our panel products, also into the UK; we reduced our operating costs by €24m and we refinanced our business.
"2010 will be another challenging year for Coillte and its customers. The Group will take further action to ensure the financial stability of the business, while also making targeted capital investments in our forest, panel products, land and renewable energy businesses, where we feel there is potential to create future value."
Ends.
For further information contact:
Tom Byrne,
Head of Corporate Communications
Coillte
Tel: 353 1 201 5231
Mob: 353 (0) 86 810 4224
Email: tom.byrne@coillte.ie
For more info and to view 2009 Annual Report online visit www.coillte.ie
Key facts about Coillte:
- Commercial, State-owned company operating in forestry, panel products manufacturing, land management and renewable energy.
- Core purpose - to enrich lives locally, nationally and globally through innovative and sustainable management of natural resources.
- Owns 445,000 hectares of land, 7% of the land of Ireland
- 1,100 people employed in Ireland, the UK and Holland
- 100 truckloads of material exported daily
- Manufacturing plants in Clonmel (Medite) and Waterford Port (SmartPly)
- 50% market share for OSB in UK
- Sales offices in Ireland, UK and Holland
- 220 mast sites + 100 new rural broadband sites nationwide
- Potential major contributor to 16% biomass heat target
- 10 'live' wind farm projects in 9 counties
- 25% of wind energy on lands formerly owned by Coillte
