State forestry firm's profits exceed hopes for 2014

State-owned forestry firm "Latvijas Valsts mezi" ("Latvian State Forests", LVM) turned over €275.1 million and earned €76.9 million in 2014, according to the company's unaudited annual report released Thursday.

In 2013 LVM turned over €259.89 million and earned €60.49 million, which represented a 3% and 23% increase, respectively, as compared to 2012, according to data provided by "Firmas.lv".

The company's CEO Roberts Stripnieks said LVM’s total income in 2014 exceeded the initial budget expectations by €18.5 million, which was mainly due to the higher selling price of wood. Together with the falling prices of diesel fuel, forest management costs and transportation costs were down, which had a positive impact on the company's profit indicators.

"Market trends ensured stable prices for LVM's main commodities - conifer saw logs, deciduous tree logs, and veneer blocks - which was processed by our clients into ready-made products and sold on the global market. A comparatively worse situation was observed in the fuelwood industry, which suffered low demand and low prices due to the warm winter. The company faced an especially challenging situation in 2014, when due to complicated weather conditions, it had to ensure wood supply to clients following coordinated supply schedules, which ended with great results," Stripnieks said.

In 2014, LVM restored 18.8 hectares of forest land area. 39.9 thousand hectares of young forest plantations were managed periodically and intensely.

In 2014 LVM completed a total of 297 kilometers of forest roads, 119 kilometers of which were reconstructed and 177 kilometers were newly-built. These roads are included in the company's balance sheet, with the total investment reaching €19.5 million.

Last year, LVM registered the largest volume of seedling exports in the joint-stock company's history - 8.8 million seedlings. "This was achieved thanks to focused investments in seedling cultivation technologies and their quality. Our main foreign trade markets are Sweden, Estonia, Finland, and Lithuania," the company's CEO explained.

In February Latvia's entire forestry sector posted record exports for last year, according to the Agriculture Ministry.

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Economy
Economy