Having recently launched its new Forestry Strategic Vision, Coillte today announced its annual results in respect of Financial Year 2021.
The strong financial performance in 2021 was driven by exceptional global demand for sawnwood and strong demand for timber related products in Coillte’s core markets. The forestry sector, like many others, was impacted by significant pandemic supply chain constraints. These constraints resulted in a supply imbalance in Coillte’s key markets, with global demand for forest products being well in excess of supply, resulting in exceptionally strong pricing.
As a result of these twin drivers of strong demand and higher prices revenue in 2021 reached a record €422m, while EBITDA of €159m was well ahead of 2020. Operating cash levels reached €73m and significantly the company recommended an overall dividend payment to the Exchequer of €30m, the highest in the history of the company.
Coillte 2021 Financial/Operational highlights
- EBITDA of €159m in 2021 up from €66m in 2020
- Revenue earned in 2021 of €422m, up from €285 in 2020
- Operating cash flow was €73m, up from €24m in 2020
- Operating profit (before exceptional items and revaluation) was €124m in 2021, up from €29m in 2020
- Coillte and ESB established a new joint venture, FuturEnergy Ireland, to deliver 1GW of new renewable energy
- 21 million trees planted across 9,000 hectares of restocked forest
- Coillte commenced the redevelopment of Avondale Forest Park in Co. Wicklow, a €16m project in partnership with Fáilte Ireland and EAK to provide an exhilarating visitor destination
- A €45m upgrade of SMARTPLY’s drying plant was significantly advanced
- A new not-for-profit “Nature Partners CLG” was launched in collaboration with Forestry Partners to create new native woodlands at scale across Ireland
- Group enters 2022 on strong financial footing with net cash of €31m and available debt facilities of €180m
Commenting on the results the Chair of Coillte, Bernie Gray, said “Our financial performance in 2021 was clearly very strong and the company achieved record revenue and EBITDA levels. As Chair of Coillte I am particularly pleased that the strong performance has allowed the Board to recommend an overall dividend to the State for the year of €30m, the highest in the company’s history. Our Forestry Strategic Vision, which we recently launched, creates an exciting future for Coillte and our Stakeholders. Our ambition is to grow new forests while optimising our existing forests for carbon capture. Additionally, we will continue to deliver sustainable wood products to support the bioeconomy, we plan to enhance and restore biodiversity along with creating additional recreational spaces for visitors to our forests to enjoy. Our vision is designed to result in the potential capture of 28m tonnes of CO2 from the environment by 2050 and to sustainably balance and deliver the multiple benefits of forestry across four strategic pillars: climate, wood, nature and people. We will consult widely with key Stakeholders on this strategic vision and, as always, continue engaging with our shareholders on how we best balance economic, social and environmental objectives. In a time of climate crisis, forestry has the capacity to make a significant contribution, and we recognise the critical role which Coillte can play in helping Ireland achieve its climate action targets.”
Coillte’s Chief Executive, Imelda Hurley, said: “During 2021, end market prices for timber and panel board products reached record levels, driven by high demand in the construction and home improvement sectors. Pricing was also influenced strongly by a global supply and demand imbalance which created a series of supply challenges in key markets. When taken together, these factors resulted in Coillte achieving a record financial performance in 2021. EBITDA earnings increased significantly on the previous year to €159m and we recorded operating cash of €73m. In the coming years, forestry will play a key role in our economy and society as we deal with the twin challenges of Climate Action and biodiversity protection. Our recently launched Forestry Strategic Vision sets out the leading role we will play in the delivery of solutions to the climate and biodiversity challenges while also ensuring a strong supply of sustainably produced timber. The most effective way to ensure our success in delivering a greener future for all is by having the financial strength and resources which allow us to continue building a strong, vibrant commercial business. In this regard our financial performance in 2021 is very encouraging.”
Coillte is part of a forestry sector that has an important and relevant future for which the company must be very ambitious. The year ahead will see a concentration on the important work of communicating and consulting on the company’s Forestry Strategic Vision. Coillte also looks forward to the outputs from Project Woodland, a key initiative launched by Minister of State Pippa Hackett, focused on addressing forestry operational challenges while also creating a shared vision and national approach for Irish forestry.
While much of last year’s operational focus was on industry challenges and the Covid-19 pandemic the current geopolitical situation in Ukraine and Russia has quickly emerged as a defining feature of 2022 and one which is already having wide-ranging impacts. Despite the fact that the market environment is currently demonstrating solid demand for forest related products, the impact of the high inflationary environment on Coillte’s cost base is of significant concern and it is difficult to predict what impact the ongoing geopolitical tensions may have on the macroeconomic environment and on international timber flows and pricing. While there are many unknowns, the company anticipates that its financial returns in 2022 will reflect a material reduction on the record high levels achieved in 2021.