Coillte today announced profits for 2000 of €25.5 million, an increase of 20% on 1999 (€21.3 million). The group's annual report and accounts, which were published after the company AGM (Annual General Meeting) today, demonstrate that Coillte has consistently increased its profits each year since 1993.

Mr. Ray MacSharry, Coillte chairman, said: "I am pleased to report a 20% increase in profits to €25.5 million in 2000. This improvement resulted from increased log sales and a strong performance in the group's non-timber businesses."

He added: "Developing businesses based on the group's forest and land assets and competencies has been a key priority in recent years. The proportion of revenue generated from sources other than timber sales is continuing to grow. In 2000 the proportion was 32% up from 26% five years ago."

Commenting on industry developments Mr. MacSharry said that there was substantial investment in new processing capacity by a number of major sawmills in 2000.

"Coillte wishes to acknowledge the commitment of these companies to investments which will improve the competitiveness of Irish timber in Irish and export markets. These investments will also have the effect of closing the gap which existed in recent years between Coillte's sawlog production capability and the sawmills' processing capacity," he said.

Mr. MacSharry also announced that Coillte has successfully completed the Forest Stewardship Council (FSC) certification process. The FSC is an international, non-Governmental organisation that has developed a process of verifying that forests are managed in a sustainable manner. Achievement of certification means that Irish forest products companies will be able to carry the FSC eco-label on their products thus providing consumers with assurances that the timber they buy comes from well-managed forests. "The FSC certification verifies that Coillte's forests are managed in a way that is economically, socially and environmentally sustainable. This provides reassurance to Coillte's stakeholders that our forests are well-managed and will greatly assist in the marketing of timber products originating in Coillte forests," according to Mr. MacSharry.

Referring to the improved results, Coillte Chief Executive Martin Lowery said the principal reasons underpinning this performance were a 9% increase in the volume of logs sold by Coillte Forest and a strong performance in a number of Coillte Enterprises' businesses. These positive factors were offset somewhat by a reduced contribution from Louisiana Pacific Coillte Ireland Ltd., Coillte's joint venture oriented strand board (OSB) manufacturing plant in Waterford.

"Turnover increased by 9.6% to €123.29 million with improved sales performance in all areas. Revenue from timber sales increased by 7.5% to €84.47 million, while the volume of roundwood sold increased by 9% to 2.73 million m3. In the sawlog category, the volume sold increased by 16% due to strong demand from customers who brought new processing capacity online during the year," said Mr. Lowery.

Mr. Lowery added that end markets in Ireland for sawn timber remained strong due to the continuing high demand for new houses. Irish sawmills succeeded in increasing their market share to an estimated 50% of the construction market, up some 10% in the last 2 years.

In regard to expanding the company's forests attention focused during 2000 on promoting the Coillte Farm Partnership Scheme. Mr Lowery said that the number of farm partnerships involving the company increased by some 30% during the year. 88 new partnerships amounting to 1,409 hectares were set up bringing the total number now to 381.

Commenting on the performance of Coillte Enterprises, which comprise a range of businesses developed from the company's asset and skills base, Mr Lowery said that its performance had improved considerably in 2000. Substantial progress was made in many of the business areas with strong performances in civil engineering and environmental services, woodland services and property leases. Revenue increased by 10.5% over the previous year.

In a reference to developments at Louisiana Pacific Coillte Ireland Ltd, Mr Lowery said that trading conditions for European manufacturers of OSB (Oriented Strand Board) became more difficult during 2000.

Looking to the future Mr MacSharry said that the board and management of Coillte are focused on four key development strategies.

The first strategy is geared to achieve full value for the company's timber resource by working closely with the processing industry to ensure that competitive processing capacity is in place, that the wood supply chain is efficient and that appropriate marketing strategies are pursued. Secondly, Coillte is continuing to grow businesses which are closely related to its core skills and forest assets by expanding the range of products and services offered. Thirdly the company is continuing a process of streamlining its organisation and management systems, structures and processes supported by a substantial IT investment. Fourthly Coillte is committed to maintaining a high level of afforestation in line with the national forestry strategy.

In summary, Mr Lowery said the year 2000 was one in which Coillte made further steady progress in the business, identifying potential efficiency improvements which are being addressed and investigating projects where management believes that growth in shareholder value can be realised. In regard to 2001 he said that the year has got off to a slow start with sluggish demand for logs while other aspects of the business have been hit by the foot and mouth restrictions. The company is working to recover ground lost in the first quarter.

Further information:
Gerry Egan 01 6635277 or 086 2591409
Paul White 01 2697736 or 087 2429000