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JSC “Latvia's State Forests” has Closed the Year 2021 with Excellent Results

The Supervisory Board of JSC “Latvia's State Forests” (LVM) has reviewed the report of the Board on the operating results of 2021, which shows that the company closed last year with a profit before taxes of 130.4 million euros, which is 54.3 million euros more than in 2020. The increase in profit was driven by higher revenue from timber sales, which totalled 389.5 million euros, including 374.5 million euros from the sale of roundwood assortments.

Edmunds Beļskis, Chairman of the Supervisory Board of JSC “Latvia's State Forests”, comments on the results of the past year: “Although a number of challenges had to be overcome in 2021, it was a good year for the company. LVM fulfilled all its obligations to timber buyers, achieving excellent financial results, which were largely facilitated by previous investments in the development of forest infrastructure – the establishment of forest road networks and the introduction of new technologies. This helped to slow down the growth rate of production costs and increase profits for both the company and the service providers working in State forests. The company's financial results will make such a significant contribution to the State budget in these difficult circumstances. On behalf of the LVM Supervisory Board, I would like to express my special thanks to the company's team for their contribution to achieving the results.”

In 2021, there was a particularly high demand for construction products and high price levels in export markets. After peaking at the end of the third quarter, the demand declined in the sawn timber and particle board markets in the fourth quarter.

At the end of the year, activity in the firewood markets increased significantly. The unusually tense situation in the energy markets boosted both the demand for wood and the rise in prices in Latvia.

At the end of 2021, Latvia's timber supply was negatively affected by seasonal factors. The large amount of snow and changing weather conditions made logging and the availability of timber for further transportation difficult.

To increase the value of the forest capital and the annual growth of wood, in 2021 maintenance works were carried out on 31.7 thousand hectares. The growth of high-quality wood in the future will be facilitated by the renovated forest drainage systems in 18.9 thousand hectares.

In 2021, the revenue from the sale of forest tree seeds and seedlings amounted to 7.2 million euros: a total of 55.3 million forest tree seedlings were sold, of which 12.9 million seedlings were exported.

To ensure the growing demand for forest tree seedlings grown in Latvia, the construction of the new “Mežvidi” tree nursery in Madona region continued last year. In 2021, five large greenhouses, six plant growing sites, pumping stations, water supply and other works were put into operation. The achievements of “Mežvidi” in the near future will significantly increase the number of seedlings offered on the market.

With the purposeful development of the network of mining sites, the production of mineral materials and their mixtures grew rapidly in 2021. Of this, 2.4 million euros were generated in trade revenue. A total of 967 thousand cubic metres of mineral materials and their mixtures were sold last year.

Conservation of biodiversity has invariably been an important part of forest management system at LVM. More than 21% of the forest and other lands (forests, bogs, meadows, waters) owned by the company are managed by LVM with the aim of nature protection, while in other forest areas, when planning and implementing forestry work, certain environmental requirements are set and carefully controlled.

The company has also been involved in a number of environmental projects through sustainable forest management. For example, within the project “Implementation of Management Measures in Specially Protected Areas and Micro-Reserves to Improve the Conservation of Habitats and Species” it is planned to improve and restore habitats of European Union importance and improve and restore suitable conditions for sustainable existence of protected species in three years existing natural areas.