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LVM to Contribute EUR 176.7 million from Its 2023 Results to the State Budget

The shareholders' meeting of JSC “Latvia's State Forests” (LVM) has approved the audited annual report for 2023. This shows that the company achieved a turnover of EUR 626.0 million and a profit of EUR 220.8 million in 2023. LVM will contribute 80 % of the profit to the state budget: EUR 141.34 million will be paid out as dividends and EUR 35.33 million will be paid out as corporate income tax for the payment of dividends.

The year 2023 was difficult in the wood product market. As compared to the beginning of the year, at the end of the year, the average prices of round timber assortments sold by LVM had already dropped by 12 %. However, the previously concluded long-term cooperation agreements contributed to a financially successful start of the year.

In 2023, 6.94 million cubic metres of round timber assortment were delivered to wood processing companies, and 0.13 million cubic metres of growing trees were sold. In general, the volume of accumulated carbon in sawn timber delivered to the market in 2023, expressed in CO2 equivalent, is 6.4 million tonnes.

Raivis Kronbergs, State Secretary of the LVM shareholder – the Ministry of Agriculture: “Despite the complicated geopolitical situation and challenges in the Latvian wood product markets, JSC “Latvia's State Forests” has achieved excellent financial indicators in 2023. The successful operation made it possible to decide to transfer more than EUR 176 million from the company's profit to the state budget, which is an especially important contribution at a time when the state needs funds both for strengthening the state's defence capabilities, promoting development and also for supporting the social sphere. Last year, the company also made significant investments in the maintenance and development of recreation areas freely accessible to all inhabitants of the country, as well as in the restoration of biotopes and habitats of species of European Union importance. I would like to express my special gratitude to all employees of JSC “Latvia’s State Forests” and the management of the company for their contribution to achieving these good results.”

Excellent quality seedlings for the young forest

LVM manages one of the most state-of-the-art tree nurseries in Europe, where genetically high-value, excellent-quality young forest tree seedlings are grown from specially selected seeds. In 2023, a total of 53.6 million forest tree seedlings were delivered to customers. 26.0 million or 48 % were sold to external customers, including 9.6 million forest tree seedlings exported to other countries. 27.6 million seedlings were used for the restoration of LVM forests, which was carried out last year on an area of ​​18.9 thousand hectares.

Enhanced CO2 capture

In 2023, young stands were cultivated on an area of ​​39.1 thousand hectares, thus promoting the growth of high-quality young forest and its better adaptation to climate change in the future. Last year, 10.5 thousand hectares were cultivated, which is 37 % more than the previous year. Just like active forest management, restoration of drainage systems contributes to sequestration of CO2. In 2023, facilities of forest melioration systems in the amount of 14.3 thousand hectares were put into operation.

Forest roads for timber transportation and nature protection

Forest roads are essential for forest management – ​​they ensure the transportation of timber and allow access to areas where the forest is being restored or where biotechnical measures are taken to maintain and restore habitats. During the reporting period, 276 kilometres of forest roads were put into operation and forest road construction projects with a total length of 155 kilometres were approved. The new roads will facilitate forest management and, at the same time, allow for a prompter response to dangerous situations in the forest, which is especially important during the forest-fire periods.

Using underground resources for important construction projects

In 2023, 810 thousand cubic metres of mineral materials and their products were sold through the responsible management of underground resources. The obtained mineral materials are used in the construction of forest roads of LVM, state and local governments, as well as private entities. All LVM mineral extraction sites have a certified production process that facilitates the traceability of the origin and quality of mineral materials and their aggregates from the moment of extraction to the finished mixture.

The demand for IT solutions is increasing

The demand for services based on information technology solutions grew rapidly last year. The company's structural unit “LVM Business System Solutions”, which is more widely known for various geospatial information system products under the LVM GEO brand, revenues from developments and services for external customers exceeded the level of revenues in 2022 by 32 %, reaching EUR 0.8 million.

LVM GEO is intended for the accumulation, processing, analysis, reflection and transfer of various types of geospatial data. The use of LVM GEO allows customers to perform economic activities more efficiently, thuspromoting business development.

Restoring biotopes and habitats of EU importance

The preservation of natural diversity is an integral part of LVM forest management. LVM manages 20.8 % of the total forest area of ​​LVM and 25.2 % of the total area of ​​all lands (forests, swamps, agricultural lands, waters) for the purpose of nature protection.

In 2023, LVM environmental planning specialists and environmental experts surveyed territories of economic activity and monitoring sites in an area of 14.8 thousand hectares.  Last year, LVM specialists recorded several thousands of rare and protected species in the state forests: deposits of 2762 vascular plants, 1467 mosses, 763 lichens, 721 fungi and 179 invertebrates.

For the protection of the habitats of large birds and the wood grouse, in accordance with the legislation, micro-reserves with an area of ​​37 300 ha have been created in state forests; in addition to what is stipulated by law, the company has set aside approximately 7 800 hectares in state forests for the protection of the habitats of birds nesting in large nests and approximately 109 000 hectares for the protection of game habitats.

In cooperation with other partners, in 2023 the company continued its work on three environmental projects co-financed by the European Union (EU), the implementation of which was started in 2021. One of the three environmental projects – “Management measures in specially protected natural areas and micro-reserves to improve the state of protection of habitats and species” – was completed at the end of 2023 after three years of intensive and methodologically complex work. During this project, LVM carried out significant biotechnical works in a total of 14 specially protected natural areas with a total area of ​​800 hectares, thus improving and restoring biotopes and habitats of EU importance.