Covid-19 to have ‘very significant impact’ on Coillte

The chief executive of Coillte, Imelda Hurley, has said the coronavirus pandemic will have “a very significant impact” on the business for at least this year.

Ireland’s largest forestry group is also being hit by a slowdown in the approval of forestry felling licences as a result of new procedures introduced by the Department of Agriculture last year, according to Ms Hurley.

This slowdown has impacted on the availability of timber that Coillte can place on the market through auction, she said.

“The market environment in 2020 is and will continue to be particularly challenging,” Ms Hurley said.

“The Covid-19 pandemic is clearly changing the market dynamic and will have a very significant impact on our business for at least this current year.”

Elsewhere, with the largest market for Irish sawnwood and timber products being the UK, Coillte continues to deal with the uncertainty of Brexit.

“The UK’s future trading arrangements with the EU are an important and as yet unknown variable which may impact the 2020 market dynamics towards the latter part of the year,” Ms Hurley said.

“As a result of these challenges we are projecting a significantly weaker financial performance in 2020 compared to 2019,” she added.

The comments come as the group released annual results for 2019, which show a fall in earnings at the State-owned company.

However, it has become debt free for the first time in its history.

In 2019 earnings declined by 10pc to €102.8m.

The performance was impacted by a 15pc-20pc price decline in its key products, which was due to an excess supply of sawnwood into the UK from mainland Europe.

In addition, the sale of the majority of Coillte’s operating wind farms in December 2018 affected results, as they accounted for €7m in reoccurring earnings.

Meanwhile, revenues of €327.4m was slightly down on 2018’s record year of €330.3m.

Net debt in 2019, a year in which Coillte planted 22 million trees across 9,000 hectares of restocked forest, reduced to zero for the first time in the State-owned company’s history.

During 2019 Coillte reached an agreement with ESB on joint venture to deliver 1GW of new renewable energy.

The company sold 280 hectares, which realised €14.9m, and it acquired 200 hectares.