Coillte sees earnings fall by a third on impact of forestry licensing crisis

Imelda Hurley, Coillte’s chief executive

Ellie Donnelly Twitter Email

April 30 2021 12:01 PM

Coillte, the State's commercial forestry business, has seen its earnings fall by a third on the back of the forestry licensing crisis, which resulted in a shortage in timber supply.

The crisis is stemming from delays in the Department of Agriculture approving licenses.

Coillte reported earnings of €66m in 2020, down from €103m the prior year.

Revenue earned by Ireland’s largest forestry business in 2020 was €285m, down from €327m in 2019.

Due to the impact of the forestry licensing crisis, log sales in the forest division were 400,000 meters cubed lower than in 2019.

Sales of sawlog to sawmill customers were down 230,000 meters cubed, while pulpwood sales also feel. This impacted negatively on Coillte’s overall financials, the semi-State said.

Coillte generated operating cash of €24m last year. It had net debt of €28m at the end of 2020.

Imelda Hurley, Coillte’s chief executive, said: “The lack of approved forestry licences resulted in supply shortages, a consequent decline in sales and market share and led to substantial supply chain inefficiencies.”

“It is now critical that forestry licensing levels further increase, including for felling, road building and for afforestation, such that the sector can avoid further supply shortages this year and can begin to resume normal operational activities.”

During the year the Competition and Consumer Protection Commission gave approval for Coillte’s joint venture with ESB to deliver one gigawatt of renewable energy.

Coillte expects the new company to be operational by this summer.

Looking forward, Coillte said the market environment for 2021 “remains challenging.”

While demand from its core markets of the UK and Ireland is “reasonably strong,” the company said forestry licensing issues - now “primarily related to road permits” – continue to restrict supply.

In addition, the Covid-19 pandemic will likely continue to affect the full reopening of the economy “for some time.”