Coillte delivers EBITDA of €106m and operating cash of €43m in challenging 2023 market environment

Coillte delivers EBITDA of €106m and operating cash of €43m in challenging 2023 market environment

• Solid financial performance against the backdrop of weak consumer-related demand resulting in lower prices
• Overall financial outturn a decline on recent highs but fourth highest financial performance in Coillte’s history
• Forestry Estate Strategic Land Use Plan 2023-2050 published
• Almost 8,000 ha of land reforested with 18 million trees

Thursday, 25 April 2024: Coillte today announced its financial and operational performance for 2023. Against the backdrop of volatile market conditions, with high inflationary pressures, rising interest rates and lower end-market demand resulting in lower prices, Coillte delivered a solid financial performance with EBITDA of €106m and operating cash of €43m. While this financial performance represented a decline on the record highs of recent years, it is the fourth highest financial performance in Coillte’s thirty-five-year history. Cumulative dividends of €17.7m were paid to the State in 2023, comprising of a final dividend of €7.7m in respect of 2022 along with an interim dividend of €10m in respect of 2023.

During 2023, Coillte refinanced its existing debt facilities resulting in €150m of available debt facilities, in addition to net cash of €65m, placing the Group on a strong financial footing entering 2024.  This enables Coillte to continue its ongoing capital reinvestment programme while also making meaningful progress on achieving the ambitions under its forestry strategic vision, thereby ensuring the delivery of the multiple benefits of its forests to society.

The Coillte Group continued to make progress on realising a key ambition to develop one Gigawatt of renewable energy by 2030 by advancing €18m of shareholder loans to facilitate the ongoing development of the wind-energy portfolio of FuturEnergy Ireland, its joint venture with the ESB. FuturEnergy Ireland achieved a major milestone during the year with its first developed windfarm project (Lenalea, a joint venture with SSE) exporting renewable energy to the grid.

Commenting on 2023, the Chair of Coillte, Vivienne Jupp, said, “Coillte’s forestry strategic vision is playing an important role in helping Ireland achieve its climate action targets. We’re making good progress on our future forest vision to 2050 that will see us support the creation of new forests, manage existing forests for greater carbon capture, enable the delivery of renewable energy on the estate and ensure the supply of sustainable wood to build low carbon homes. This vision also sees us enhancing biodiversity and creating more recreational spaces for the enjoyment of Ireland’s citizens and tourists. Financial sustainability is integral for Coillte to deliver on its strategic vision to create a sustainable future for all by balancing and delivering the multiple benefits of Ireland’s State forests for climate, nature, wood and people.”

Coillte’s Chief Executive, Imelda Hurley, said “Coillte delivered a solid financial performance in 2023 despite the business facing significant headwinds. During the year we experienced volatile market conditions which impacted end-market demand for our products and resulted in significantly lower prices. Sawlog and panel products are globally traded commodities which are closely linked to the construction sector, with the result that Irish pricing reflects the impact of global demand and supply dynamics. Despite these challenges, we delivered our fourth highest financial performance following two years of record highs. Against this backdrop, I was very pleased that during 2023 we finalised our Forest Estate Strategic Land Use Plan 2023-2050. This Plan underpins our strategic vision setting out a range of objectives which will support Coillte in delivering on its climate action ambitions.”

Outlook

Market indicators align with Coillte’s view that long-term end-market demand is expected to grow for wood-based products, as consumers increasingly look to substitute carbon-heavy products with wood-based sustainable materials. In the near-term, notwithstanding some macroeconomic and geopolitical uncertainties, Coillte expects to see demand across its core end-markets stabilise, underpinned by an improved macro-economic outlook coupled with a rebalancing of relevant demand and supply dynamics. Increasing end-market demand is expected to emanate from lower inflationary pressures, coupled with the strong likelihood of recent interest rate increases beginning to unwind, which when taken together are expected to result in a positive impact on consumer confidence.

As always, the focus in 2024 will continue to be on what Coillte has greatest control over, including the optimisation of its production volumes while carefully managing its cost base. In addition, 2024 will also see the business advance investment plans in its Medite Smartply operations and in its renewable energy joint venture, FuturEnergy, Ireland as well as in nature restoration projects of scale.

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