Coillte expects to return to profit growth by the end of the year after it reported profits of €18.5 million today, down seven million on profits in 2001 of €25.5.
The Group reported good progress in many areas in 2001 but reduced profits due to difficult trading conditions affecting the Group's businesses.
Coillte attributes the profits reduction to a number of factors. Sawlogs demand was sluggish during the first quarter due to reduced demand by some of the Group's major customers.
Strong overseas competition from suppliers of sawn timber, a slowdown in the construction sector towards the end of the year and lower demand for pulpwood adversely affected both the volume of timber sold and the prices achieved.
Coillte's Christmas tree business suffered losses despite an increase in the number of Christmas trees sold in 2001.
This was due primarily to a write-down of €2 million in the asset value of the business. The Group has revised the value of its Christmas tree asset to reflect the number and quality of trees in its farms and future price and production cost expectations.
The foot and mouth crisis also contributed to reduced profits, in particular in businesses such as private planting and tree care services.
Commenting on the results Mr Martin Lowery, Coillte Chief Executive said while the company was disappointed to see profits reduce after 8 years of successive profit growth, progress was made in 2001 which would benefit the Group's performance into the future.