2009 Economic Performance

2009 was a difficult year for the Coillte group

Profit after tax fell 54% from €9.2m in 2008 to €4.2m in 2009. The 2009 results include an exceptional profit of €18.5m (2008: €0.5m), therefore there was an underlying loss on trading activities of €14.3m in 2009, as the construction sector in Ireland, the United Kingdom (UK) and continental Europe continued to stagnate. This compares with an underlying trading profit of €8.7m in 2008. While this trading loss was a disappointing result, economic conditions would have led to a substantially higher loss had the Group not taken steps to reduce costs, develop new markets during the year and sell immature forests to unit trust funds. This decisive action meant the Group was able to return a net profit of €4.2m.

The Coillte Group made a profit after tax of €4.2m in 2009, with a substantial contribution coming from an exceptional profit of €18.5m. This offset an underlying trading loss of €14.3m. Turnover was €206.9m in 2009, compared to €249m in 2008. This fall in the value of sales resulted primarily from lower average prices for logs and panel products coupled with the negative impact of the exchange rate on exports to the UK.

Key achievements in 2009 included:

  • We worked with our sawmill customers and Enterprise Ireland to strengthen the market position of Irish timber in the UK. We also adjusted our timber supply programme to meet the needs of sawmill customers who exported to the UK, with the result that we sold 5% more in 2009 than in 2008, in the face of the most difficult construction market in decades.
  • We delivered record sales volumes from our panels business into our biggest market, the UK, during 2009, through a targeted programme of increasing market share and plywood substitution. At the same time, we implemented a series of sales price increases in the UK market throughout 2009, raising local currency prices from a relatively low base at the start of the year.
  • We reduced operating costs by a total of €24m through a combination of cost control measures, including 95 voluntary redundancies and short time working, coupled with cost reductions in areas such as electricity and resin costs that resulted from lower levels of output.
  • We completed the sale of immature forests to the Irish Forestry Unit Trust and Allied Irish Pension Unit Trust bringing in €33.8m to strengthen the Group’s balance sheet and curtail increases in debt.
  • We continued to invest for the future. We worked with farm partners and private clients to plant over 1,000 ha of their land, re-planted over 4,800 ha of land that had previously been harvested and we built or upgraded over 200 km of forest roads.
  • We advanced our renewable energy strategy both in wind energy and biomass energy by progressing a significant programme of value creation through the development and sale of wind energy assets. We also initiated projects that we believe will lead to Coillte playing a significant role in biomass energy.
  • We progressed the development of 100 sites for the National Broadband Scheme.

For more information on how each of our Division performed please see our Annual Report

For a detailed description of the company's financial performance,
see Coillte’s 2009 Annual Report.

Brendan McKenna - Chairman
David Gunning - CEO