Money grows on trees as Coillte profits increase 79%

PROFITS AT State forestry company Coillte grew 79 per cent last year to top €40 million, driven partly by exports of timber construction products, the group said yesterday.

Sales at the group rose by two-thirds to €318.1 million in 2007 from €213 million in 2006. The company said high log and wood panel prices were the main reason for its growth. Operating profits doubled, reaching €64.2 million by the end of last year from €32.2 million 12 months earlier. Pretax profits were €54 million.

The company had after-tax profits of €41.1 million in 2006, a 79 per cent increase on the €22.4 million it recorded a year earlier.

Coillte's wood-panel manufacturing businesses, Medite in Clonmel, Co Tipperary, and Smartply in Waterford Harbour, accounted for the greatest share of turnover, with sales reaching €189.9 million for the year, compared with €79.2 million in 2006.

Its forestry business accounted for €96.3 million in turnover, while its enterprise activities, which is largely focused on land management and developing an alternative energy business, generated €31.8 million.

Chief executive David Gunning said the company invested €49 million in its forestry business during the year. It also spent €5 million upgrading the recreation and tourism element of its forests, which it undertook in partnership with another State agency, Fáilte Ireland.

The company estimates the value of its recreational and tourism facilities at €97 million.

The group is also seeking approval from the Commission for Energy Regulation to develop 17 wind farms with the capacity to produce 960 megawatts of electricity on its land. It expects to get permission for about half of these.

Last year's accounts show it has has put aside €10.27 million to cover the cost of a voluntary redundancy programme. According to Mr Gunning, Coillte employs around 1,200 workers. He said yesterday that the company intended cutting this number over a period of several years to less than 1,000.

Last year was Mr Gunning's first full 12-month period as chief executive. Yesterday he acknowledged that the building industry was a key market for many of the group's products, and that conditions this year would be tougher as a result of the downturn in that sector. "2008 will not be 2007, there's no question about that."