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JSC “Latvia's State Forests” has Closed the First Half of the Year with a Profit before Taxes of EUR 161.1 Million

The supervisory board of JSC “Latvia's State Forests” (LVM) has reviewed the provisional results of the company's six-month operation. LVM's half-year profit before taxes reached EUR 161.1 million, which is EUR 28 million or 21 % more than in the corresponding period of 2022. The increase in income was mainly influenced by the sales prices of wood assortments – in the first half of 2023, the average sales price of roundwood assortments reached 90.76 euros/m3, exceeding the average price of the corresponding period of 2022 by 16.28 euros/m3.

Forestry

During the first half of the year, 3.29 million cubic metres of roundwood assortment were delivered to Latvian wood processing companies. By sowing and planting, forest was restored in an area of 12.6 thousand hectares, young stands were tended in an area of 22.2 thousand hectares, while 170.9 thousand cubic metres of drainage ditches were cleaned of silt.

LVM faces challenges in limiting logging operations due to the measures implemented to control the spread of the European spruce bark beetle. As part of the emergency caused by the implementation of the plan to limit the spread of the European spruce bark beetle, the scope of damaged tree felling will increase in exchange for renewal felling or thinning. As a result, the structure of wood products changes – the share of products from the technological wood group which has a lower sales value increases, whereas the share of products from the sawlog group with a higher sales value decreases.

Production of forest seedlings

In the first six months of 2023, 26.2 million seedlings were sold for reforestation in the areas managed by LVM, 13 million were sold to private Latvian forest owners, and 6.5 million were exported.

To increase the volume of sales of high-quality forest tree seedlings, an essential stage is the storage of seedlings in freezers, thus creating an opportunity to sell seedlings promptly and in large quantities at a time more suitable for the client. The construction of the seedling sorting and storage complex at the Mežvidi Nursery, which is scheduled to be put into operation at the end of 2023, continues.

Mineral materials for the construction of important facilities

In the first six months of 2023, LVM sold 296 thousand cubic metres of mineral materials and their mixtures, which is 348 thousand cubic metres fewer than in the corresponding period of the previous year. Just like in other European countries, the activity of the industrial and construction sectors is also weakening in Latvia – as compared to last year, volumes have decreased in the mining industry, including the non-metallic mineral products production sector.

Investments in forest infrastructure

In the first half of 2023, EUR 22.7 million were invested: 60 % or EUR 13.7 million were invested in forest infrastructure, namely, in the construction of forest roads and bridges, restoration of forest drainage systems and creation of wooden shield roadways. 15 kilometres of forest roads have been put into operation; forest drainage systems in a total area of 1.8 thousand hectares have been renovated and rebuilt.

Conservation for greater diversity

To introduce the public to the processes taking place in nature and to explain the increasing role of forestry in the national economy, the company continues to implement LVM's environmental education programmes for school students and young people of various ages, as well as teachers, and has organized educational hikes together with company's experts, inviting everyone who is interested to participate in them.

The company is actively working on 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 KHZ-SAM project for 2021-2023 – implementation of management measures in specially protected nature in territories and micro-reserves to improve the state of protection of habitats and species.

Environmental monitoring is carried out annually to assess the impact of the implemented forest management on nature and environmental values. Information on monitoring results has been summarized in LVM's environmental report for 2022. The report is published on the company's website.