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The Annual Report of JSC “Latvia's State Forests” has been Approved

The shareholders' meeting of JSC “Latvia's State Forests” (LVM) has approved the audited annual report, which shows that the company closed the year 2022 with a profit of 242.2 million euros. During this period, the company's turnover reached 566.6 million euros, which is the largest turnover in the company's history.

The increase in revenue was mainly influenced by the sales prices of wood assortments – the rapidly growing demand for wood products in Europe and the world in 2022 significantly increased the sales prices of wood in Latvia as well; therefore, last year the average price of round timber assortments was 44 % higher than in 2021, while this year there is a decline in wood prices. In 2022, the company's shareholders' meeting decided to pay to the State 203.1 million euros, including 162.5 million euros in dividends for the use of State capital and 40.6 million euros in corporate income tax.

LVM shareholder Raivis Kronbergs, State Secretary of the Ministry of Agriculture, said: “Today, our country has to overcome many challenges, so I can say with gratitude to the company for the work it has done that JSC “Latvia’s State Forests” will make the biggest contribution to the State budget from last year's activity among all the State-owned companies. No less important is the work done by the company in strengthening the energy independence of our country and moving towards carbon neutrality.”

Pēters Putniņš, Chairman of the Board of JSC “Latvia’s State Forests”: “Although last year was very difficult, the economic indicators achieved by LVM in 2022 – the company's turnover and profit – are the highest in the company's history. I would like to say a special thank you to the employees of JSC “Latvia’s State Forests” who worked together to achieve the company's goals. The outstanding results of the work of LVM were determined both by the situation on the European and global wood market, by the professionalism of the employees, the development of the innovations introduced in the company, and close cooperation in the forest sector. LVM sells company's products on the Latvian market, therefore the company is as strong as the Latvian forest industry.”

Contribution of the forestry sector to the national economy

In 2022, Latvian wood processing companies sold 6.59 million cubic meters of wood, including 6.39 million cubic metres of round timber assortment, which is 0.25 million cubic metres less than in 2021. The decrease can be explained by the rapidly growing demand for logging and transport services from the private forest owners, which created a deficit in the service market and prevented the originally estimated sales volume of assortments from being achieved.

In the reporting year, a total of 661 thousand megawatt-hours of wood chips were sold, generating 17.5 million euros in revenue. As compared to 2021, last year's revenue from the sale of wood chips was 9.6 million euros higher. This was influenced by both the 69 thousand megawatt-hours higher sales volume and the higher (by 13.09 EUR/Mwh) average sales price. All energy chips produced in 2022 were delivered only to local wood processing and energy production companies, thus providing support to Latvian heat energy producers.

In 2022, forest restoration, as well as growing of plantation forest and afforestation were carried out in an area of 19.2 thousand hectares; of this, 13.2 thousand hectares of forest were restored by planting and sowing. Young stands were tended in an area of 28.6 thousand hectares, while agrotechnical maintenance of the restored forest areas was carried out in 30.3 thousand hectares. In the reporting year, 499 thousand cubic metres of drainage ditches were cleaned of silt.

Quality seedlings for the forest of the future

In 2022, a total of 61.4 million forest tree seedlings were sold, of which 89 % or 54.9 million are container seedlings and seedlings with an improved root system. 32.7 million seedlings were sold for reforestation in the areas managed by LVM, 13.8 million were sold to private Latvian forest owners, and 14.6 million were exported.

In 2022, 2.2 million euros were invested in increasing the volume of sales of quality forest tree seedlings. Two watering equipment units with a long night system have been installed in the forest nursery, and the construction of the seedling sorting and storage complex has also started. Investment projects for the construction of seedling freezers have been updated for the Pope and Valmiera tree nurseries.

Mineral materials for the construction of important facilities

Revenue from the sale of mineral materials and their aggregates amounted to 4.0 million euros, exceeding the 2021 revenue by 1.6 million euros. 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.

Every year, the volume of production and trade of various mineral materials increases, some of which are used in the construction of facilities of public importance. Significant volume of mineral materials, 613.7 thousand cubic metres, were used in 2022 for the Ķekava bypass project.

A certificate is maintained at LVM's mineral extraction sites, which confirms that the controlled production process of mineral materials and their aggregates meets internationally recognized standards and provides LVM's cooperation partners with access to high-quality mineral materials and their aggregates.

Investments in forest infrastructure facilities

In 2022, the company invested 37.7 million euros in forest infrastructure facilities – in the construction of forest roads and bridges, in the restoration of forest drainage systems and in the creation of wooden shield roadways. In the reporting year, 31.9 million euros were invested in the construction of forest roads, 339 km of forest roads were put into operation.

Functional forest drainage systems play an important role in sequestering CO2. To increase CO2 sequestration, 5.1 million euros were invested in the restoration of forest drainage systems, design works were carried out on an area of 16.0 thousand hectares, while facilities on an area of 17.7 thousand hectares were put into operation.

Conservation for greater diversity

To preserve natural diversity, LVM not only manages protected nature territories (including Natura 2000), micro-reserves, but also such territories as forest stands of genetic resources of forest tree species. These forest stands allow to preserve the genetic diversity of certain species and to provide a base for forest genetics, breeding and seed breeding measures to increase the productivity and quality of the forest. 

When planning forest works, LVM annually identifies new deposits of protected species (vascular plants, mosses, lichens, mushrooms), nesting and roosting areas of protected birds, forest, swamp, water, grassland, and dune habitats of European Union importance. To ensure their protection and the necessary management, additional nature protection areas are also determined to improve the quality of the species' habitats. The environmental survey was carried out in a total area of more than 12 thousand hectares.

Also, LVM environmental experts regularly monitor the nesting success of protected species, protected birds, plants, and other deposits to evaluate the effectiveness of annual nature protection measures. In 2022, the success of nesting was evaluated in the nesting areas of more than 500 protected birds, in almost 100 hunting roosting areas.

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. The LVM database has been supplemented with 4 440 new, rare and specially protected species of plants, mushrooms, lichens, and invertebrates. In total, the company's environmental experts have already registered 38 800 rare and protected species.