Coillte eyes tourism and energy projects for future growth
State-owned forestry company reports operating profit of €60.5m and lots of plans
During the year, Coillte planted 15 million trees on 6,200 hectares of land
Coillte, the State-owned forestry company that on Thursday reported improved sales and profits, is undertaking a strategic review of all aspects of its business, as it contemplates further investment in renewable energy and also tourism projects.
The company, which appointed former private equity executive Fergal Leamy as chief executive this year, is seeking to identify opportunities for future growth. The review will also identify funding avenues for its plans to roll out wind-farm projects.
Coillte is building a wind portfolio that the company says will produce enough electricity for 210,000 homes in five years. Coillte is also exploring opportunities in solar power.
When asked if Coillte is planning to tap corporate bond markets for capital to fulfil its energy ambitions, which Bord na Móna has managed successfully for several years, Mr Leamy said “all options” were part of the review.
The company has been mandated by Government to develop a number of joint-venture projects with Bord na Móna, with which it was once slated for a merger.
As well as co-developing wind farms, Mr Leamy said the two companies are examining ways to create a network of visitor and tourist-oriented trails across Coillte and Bord na Móna lands.
The companies recently signed a memorandum of association to develop bicycle tracks around Offaly, which will be extended to Dublin and the south of the country in coming years.
Mr Leamy said the objective is to build a “product”, modelled on the approach that led to the Wild Atlantic Way, that could be marketed internationally.
Coillte is nearing completion of the sale of its network of telecoms towers, which it was hoped would fetch as much as €100 million. Some of this cash will go towards the construction of a new production line at its Smartply facility in Waterford.
Mr Leamy said Coillte wants to expand the range of products produced at Smartply, which mainly manufactures wooden panels for use in construction.
In its annual report on Thursday, Coillte delivered an operating profit of €60.5 million in 2014. The figure represents an increase of 46 per cent on 2013. Group turnover rose by €22.3 million, or 8 per cent, to €298 million.
Profit after tax increased to €38.3 million, up from €25.8 million in 2013 and €15 million in 2012. The company’s earnings before interest, taxes, depreciation and amortisation (ebitda), increased 33.5 per cent to €78.9 million.
The report also shows sales outside Ireland accounted for 54 per cent of group turnover, helping reduce volatility in earnings.
During the year, Coillte planted 15 million trees on 6,200 hectares of land and sold 2.3 million cubic metres of timber. An estimated 18 million visits were made to Coillte’s forests.
The company paid a €4 million dividend to the State and absorbed asset writedowns totalling €4.6 million, €2.1 million related to a proposed Mayo wind farm that was refused planning permission.
Mr Leamy said the figures represented the company’s “progress” in terms of recovering from the “deep recession in the construction markets in the UK and Ireland”.
“Coillte’s core business is forestry and we are encouraged by the strong demand we are seeing globally for the products we produce.”