Coillte grows profits eight-fold to €32.1m on stronger exports
State forestry company's boon defies McCarthy's prognosis
PROFITS at the State's forestry company increased nearly eight-fold last year, as the company improved exports for construction industry materials.
Coillte, which has been earmarked for sale by the McCarthy report on state assets, said profits for 2010 jumped to €32.1m compared to only €4.2m a year earlier. Turnover was up 21pc to €250.4m.
The results were the best by the company since 2007, when it recorded a €40m profit at the height of the boom.
The profit was driven mainly by exports to the construction sector in the UK, which replaced the fall-off in supply to the construction industry here.
Exports of planks for the construction industry increased dramatically, from around 5,000 cubic metres at the start of 2009 to more than 200,000 cubic metres by the end of last year. Prior to 2009, virtually no construction timber was exported.
Irish sawmills now have about a 7pc share in the UK market, the company said.
Chief executive David Gunning was very pleased with the results.
"We made very good progress during 2010, delivering on our strategy for growth across our key areas of business -- forestry, panel products, land management and renewable energy.
"Sales were up 8pc in Coillte Panel Products, with SmartPly OSB achieving price increases.
"In renewable energy, we completed construction of the Garvagh Glebe Wind Farm in Co Leitrim and secured planning permission for two further projects in Wicklow and Galway.
"We have also been driving innovation to create new value-added products and have had a relentless focus on costs across all our businesses.
"In 2010 we generated €7.9m in revenue from new products, exceeding the target we set ourselves," he said.
"We are transforming Coillte into a high-performance organisation whose core purpose is the innovative and sustainable management of natural resources," he said.
Last week's report by UCD economist Colm McCarthy on the sale of state assets recommended that the State start selling off Coillte's forestry and non-forestry assets, but not its forest land. It said unforested land that Coillte does not need should also be sold.
The report has been criticised by ESB head Padraig McManus, but yesterday Mr Gunning was not available to comment on the report.
"The ownership of the company is a matter for the State and the Government will make the ultimate decision," said a spokesman.
Timber prices have rocketed worldwide on demand from Asia, but Coillte said the higher prices only told half the story.
"Higher prices played a role, but we have worked to improve the product so that it has added value and is more attractive to customers," he said.
Despite the results, Mr Gunning said 2011 was shaping up to be "more difficult".
"This year will see cost saving continue to be a major focus across the group and we will continue to make strategic investments leveraging our forest, panel products, land and renewable energy businesses to deliver value to our shareholders and innovative and sustainable new products to our customers," he said.