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Saturday 21 October 2017

Coillte profits up almost 7pc in 2016 as forestry giant eyes further growth

File photo
File photo
Ciaran Moran

Ciaran Moran

Coillte, Ireland’s largest forestry and land solutions company, today announced its annual results for 2016.

The company delivered record earnings before interest, tax, depreciation and amortisation (EBITDA) of €98.3m, up 10pc on the previous year.

Operating cash flow at €15.2m was up 130pc on 2015 while operating profit (before exceptional items and revaluation gains) increased by 6.6pc to €64.4m.

Coillte manages a forest and land estate of over 440,000 hectares, which is equivalent to approximately 7pc of the country’s land.

From this land, it operate three businesses, its core forestry business, wood panels manufacturing business (MEDITE SMARTPLY) and a Land Solutions business.

Coillte says its core forestry division has the potential to be the best forestry company in Europe and the plan is to increase the return on this business from 1pc today to 3.5pc by 2020.

Log sales to Coillte’s sawlog customers increased 25pc from 2015 to 1.6 million m3 in 2016, which is the highest sales level achieved in 10 years.

Furthermore, 19m trees were planted over 7,800 hectares, an increase of 15pc on last year and the highest level of forest establishment completed in over 10 years.

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With over 70pc of Irish timber products exported to the UK every year, the Coillte highlighted uncertainty created by Brexit poses several challenges for the forestry industry.

Commenting on the results the Chief Executive of Coillte, Fergal Leamy said: “During 2016 we made considerable progress towards achieving our ambitious financial and operational targets.

"A key focus of our new strategy is to grow operating cashflows so that we can increase the return to our shareholder.

“In 2016 operating cash increased significantly to €15.2m from €6.5m in 2015. Historically operating cash has been negative or breakeven," he said.

Leamy went on to say that Coillte have set clear strategic objectives and financial targets for the next five years that will ensure we achieve its vision and transform the business from one that makes a minimal return on investment historically to one that drives a consistent 5pc return from our €1.4 billion asset base by 2020.

“We still have a significant challenge ahead to hit the targets we have set ourselves, however we are encouraged by the progress we have made to date and the fact that we are beginning to see the results from the successful execution of our strategy,” he said.

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