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LVM Supervisory Board: the Company Achieved Excellent Financial Results Last Year

The Board of JSC “Latvia's State Forests” (LVM) has approved the company's 2023 budget, which sets out the company's main operational goals for this year. At the same time, the operational results of 2022 show that the company ended the past year with a profit of 258.5 million euros before paying the company's taxes.

The company's revenue in 2022 was 568.6 million euros, which is 159.2 million more than in 2021. Last year, the amount of accumulated carbon in sawn timber delivered to the market, expressed in CO2 equivalent, accounted for 5.9 million tonnes. It is expected that this year LVM's revenue will reach 545.1 million euros, and profit – 170 million euros.

Edmunds Belskis, Chairman of the LVM Supervisory Board: “In 2022, the company achieved record high performance indicators, which was ensured by both the market situation in the forest sector and the investment of the company's employees, therefore it is expected that the State will receive the largest dividends in the company's history. The year 2023 will be full of challenges both for “Latvia’s State Forests” and the entire forest industry – the year has started with a difficult and uncertain situation in the global wood market, and it is difficult to predict when and how the market will recover. At the same time, the company plans to ensure not only stable supplies of wood for our country's national economy, but also an increasing amount of fuel wood chips for Latvian energy companies, thus strengthening the country's energy independence and promoting the trend towards the use of green energy. Also this year, it is planned that the turnover of the company will exceed 500 million euros. Considering the lack of forestry service providers, this year the company will work on the creation of a risk mitigation plan to ensure the continuity of production.”

In 2023, it is planned to sell a total of 7.14 million cubic metres of wood, including providing a range of round timber to customers in the amount of 6.97 million cubic metres. 6.39 million cubic metres of roundwood assortments were sold last year.

Investments for the development and climate neutrality

The total amount of investments in 2023 is planned to be 88.5 million euros, of which 45.6 million euros or 52 % are planned to be invested in the development of forest infrastructure, including the construction, design and construction supervision of forest roads, forest drainage systems and bridges. In 2022, LVM's investments amounted to 47.5 million euros, of which 37.7 million euros were invested in forest infrastructure. In 2022, 339 km of forest roads were put into operation; forest road construction projects with a total length of 288 km were approved. To increase CO2 sequestration, 5.1 million euros were invested in the restoration of forest drainage systems in 2022, design works were carried out on an area of 16 thousand hectares, while facilities on an area of 17.7 thousand hectares were put into operation.

Wood chips – a renewable resource for energy independence

To promote the use of renewable resources and increase Latvia's energy independence, the company plans to produce fuel wood chips in the amount of 664 thousand megawatt hours in 2023. All energy wood chips produced will be available to local wood processing and energy companies.

In 2022, wood chips were sold in the amount of 661.1 thousand megawatt hours, earning 17.5 million euros in revenue. Compared to 2021, last year's revenue from the sale of wood chips was 9.6 million euros higher. 

Mineral materials for the needs of the national economy

In 2023, it is planned to sell 979.7 thousand cubic metres of mineral materials and their aggregates, providing important needs of the national economy, for example, in road construction for sand, sand-gravel throughout the territory of Latvia. The proportion of certified mineral materials and their aggregates in the total sales volume is expected to be 99.7 %.

The volumes of production and trade of various mineral materials are increasing every year. In 2022, LVM sold 1559 thousand cubic metres of mineral materials and their aggregates, which is 592 thousand cubic metres more than a year before. This line of business brought 7.9 million euros in revenue, exceeding the 2021 revenue by 1.7 million euros.

A record amount of forest tree seedlings

In parallel with the production of forest tree seedlings in the new LVM Mežvidi Nursery in 2023, the construction works of the seedling sorting and storage complex with a total area of 8 500 square metres will also continue. Construction works are expected to be completed in 2024. With the completion of these construction works, it will be possible to carry out seedling sorting and packing work also during the winter months, thus extending the duration of the seedling production season. Once the construction is completed, it will be possible to increase the seedling production capacity and ensure the growing demand for high-quality forest saplings in Latvia and abroad.

In 2023, LVM plans to sell 61.9 million top-quality selected forest tree seedlings, most of which are new technology seedlings – container seedlings and seedlings with an improved root system. In 2022, LVM sold a total of 61.4 million forest tree seedlings, of which 13.8 million were sold to private Latvian forest owners, and 14.9 million were exported.

Growing forest for carbon sequestration

It is during the growth process that trees attract the most carbon dioxide from the atmosphere and store carbon in the wood. This year, the tending of young stands is planned to be carried out on an area of 35.3 thousand hectares, while forest restoration and planting is planned on 18.3 thousand hectares, which, restored with high-quality seedlings, will allow to attract CO2 more intensively. Last year, the forest was restored and planted in an area of 19.2 thousand hectares, while the tending of young trees was carried out in 28.6 thousand hectares.

Implementation of nature protection measures

Nature protection is an integral part of modern forestry and preserving the natural diversity of managed forests has always been an essential part of LVM's forestry production. In 2023, in addition to daily nature protection measures, LVM will continue work in three environmental projects co-financed by European Union funds, taking care of both the restoration of rare biotopes and habitats of species in a total of 19 specially protected natural areas with a total area of almost 1000 ha, and the improvement of water quality in the River Aģe basin, using nature friendly green and blue infrastructure elements and creating a demonstration in explaining the role of the forest environment in ensuring the purity of freshwater.

To evaluate the effectiveness of annual nature protection measures, LVM environmental experts regularly monitor the nesting success of protected species, protected birds, plants, and other deposits. In 2022, as part of the northern goshawk monitoring, 195 territories were surveyed, finding 116 inhabited nests. Last year, experts recorded a record number of successful nests – 81, as well as a record number of newly found nests – a total of 36 new nests.