News

LVM has Worked with a Profit of 133.1 Million in the First Half of the Year

The Supervisory Board of JSC “Latvia's State Forests” (LVM) has reviewed company's performance results for the first six months of this year that showed that LVM revenue was 267.6 million euros, which is 83 million euros more as compared to the corresponding period last year. The total half-year profit of the company before corporate income tax is 133.1 million euros. At the same time, with the significant increase in the price of fuel and the worsening of the labour shortage issue of service providers, the total costs have increased by 11.6 million euros as compared to the corresponding period in 2021.

Edmunds Beļskis, Chairman of the Supervisory Board of LVM, emphasizes the contribution of LVM employees to the results achieved: “The first six months of the year were financially successful for the company. I would like to express my gratitude to the company's employees for their ability to adapt to the changing market situation, replanning the company's operations and providing the opportunity to purchase additional 150 thousand bulk m3 of wood chips for this year's heating season, which is equivalent to 130 thousand megawatt hours.”

Production challenges in wood supplies

Although the overall market situation has been particularly favourable in the first half of this year, when the prices of most wood products reached historically high levels, at the end of the half-year, a decrease in the demand in sawn timber sales segments could be observed. It is related to both the increase in stocks in warehouses and the decrease in housing construction activity in some export markets. Contrary to an insignificant decrease in the sale of lumber, which is expected to have an impact on sawlog prices as well, in the second quarter of 2022, significant changes occurred in the segments of energy wood products, as a result of which the demand for firewood, fireplace wood and energy chips increased significantly.

LVM delivered 3.25 million cubic meters of logs to its customers. Due to the late onset of spring, which continued with uncharacteristic summer rainfall in June, LVM started the 2nd quarter of this year with limited availability of wood stocks, many highways were closed for trucks. The market was characterized by an insufficient number of logging and transport service providers. These factors had a significant impact on the volume of timber sales planned for the first half of the year.

Revenue from the sale of wood chips has gone up

A total of 345.4 thousand megawatt-hours of wood chips were sold in the first half of 2022. Revenue from the sale of wood chips has increased by 2 million euros as compared to the corresponding period of 2021. This was influenced by both the 68.6 thousand megawatt-hours higher sales volume and the higher average sales price.

Sales of seedlings have increased

Revenue from the sale of forest tree seeds and seedlings in the first half of 2022 were 6.1 million euros, or 105 % of the revenue obtained in the corresponding period last year, as 4.3 million more seedlings were sold in the first six months of 2022. In the first half of 2022, 53.2 million forest tree seedlings were sold, of which 21.9 million or 41 % were sold to external contractual partners, including 9.9 million seedlings that were exported. 31.4 million seedlings were sold for forest restoration in the areas managed by LVM.

Responsibly managed mineral materials

Revenue from the sale of mineral materials and their aggregates to external customers accounts for 1.6 million euros, exceeding the revenue of the first half of 2021 by 0.8 million euros. A total of 643 thousand cubic metres of mineral materials and their aggregates were sold, which is 344.1 thousand cubic metres more than in the corresponding period of 2021. In the first half of 2022, mineral material aggregates were obtained and processed in the amount of 78.2 thousand cubic metres using LVM's production facilities, which exceeds the volume produced in 2021 by 42.2 thousand cubic metres.

The implementation of environmental projects continues

LVM manages its territories sustainably and responsibly; therefore, one of its tasks is to take care not only of the economic value of the territories under LVM's control, but also of the well-being and future existence of the species and ecosystems living in them.

LVM continues its work in three externally co-financed environmental projects, the implementation of which began in 2021: “LIFE GoodWater IP 2020 2027” – implementation of management plans for Latvian river basins to achieve good surface water status; “LIFE IP LatViaNature 2021-2028” – optimization of management and management of Natura 2000 protected areas; as well as Cohesion Fund project – implementation of management measures in specially protected nature in territories and micro-reserves to improve the state of protection of habitats and species. More about the environmental projects.

To assess the impact of the implemented forest management on nature and environmental values, environmental monitoring is carried out annually. Information on monitoring results is summarized in LVM's environmental report for 2021: https://www.lvm.lv/sabiedribai/meza-apsaimniekosana/vides-parskats