Coillte finances take hit from Covid and licencing ‘crisis’
Posted 5 days ago
Coillte has released its financial performance report for the year 2020, noting decreased figures compared to 2019.
The authority attributed this to the pandemic and to the forestry licencing crisis, which resulted in serious backlogs to the issuing of licences for afforestation, felling and the construction of forest roads.
Coillte’s 2020 figures show that it had an operating cash flow of €24 million in 2020. This compared to €54.2 million in 2019, a decrease of over 50%.
The group’s turnover for 2020 was €285.3 million, a decrease of over €40 million compared to the 2019 figure of €327.4 million.
Meanwhile, earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at €66 million in 2020, down from €102.8 million in 2019.
Operating profit (before exceptional items) decreased from €63.3 million in 2019 to €29.1 million in 2020, a decline of over one-third.
The results for 2020 include exceptional costs of €1.3 million relating to the impact of forest fires. No such costs were recorded in 2019. In addition, the group received €1.3 million (2019: €1.5 million) in distributions from its windfarm investments during 2020.
“The potential impact of Brexit was overshadowed by Covid-19 and extreme difficulties with forestry licencing.
“Any one of these issues in itself would pose enormous challenges for any organisation; the three of them together posed unprecedented challenges for Coillte and the forestry sector as a whole,” said Coillte chair Bernie Gray.
She did note that there had been “some improvement” in the licencing situation this year.
Meanwhile, Coillte chief executive Imelda Hurley said that the forestry licencing crisis was “the most significant challenge faced by our sector”.
“There were severe delays in the processing of forestry licences due to the introduction of a new regulatory regime by the Department of Agriculture, Food and the Marine and because of an increase in appeals of forestry licences to the Forestry Appeals Committee.
“Coillte’s forestry licences were severely delayed and a consequent shortage of sawlog supplies and timber products ensued,” Hurley said.
She highlighted: “The lack of approved forestry licences resulted in supply shortages; a consequent decline in sales and market share for the Irish forest products sector; and led to significant supply chain inefficiencies.”
In terms of the outlook for 2021, Hurley said that the market environment “remains challenging”.
“While demand from our core markets of the UK and Ireland is reasonably strong, forestry licencing issues (now primarily related to road permits) are still restricting supply and the pandemic will continue to affect the full reopening of the economy for some time.
“Accordingly, Coillte is projecting that 2021 will be a year of recovery with a focus on continuing to keep all colleagues safe during the pandemic; navigating our way through the remaining licencing challenges; resuming normal supply arrangements with customers; and continuing to deliver the multiple benefits of forestry,” the Coillte chief executive noted.
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