2020

LVM Experiences Its Historically Best Financial Results and will Pay EUR 76 065 500 to the State Budget

The annual report approved by JSC “Latvia's State Forests” (LVM) shows that the company's revenue accounted for EUR 379.3 million in 2019, which is 11.9% more than in 2018. It is the best performance indicator in the company's history.

LVM's forecast profit before corporate income tax reached EUR 118.2 million, exceeding the previous year's figures by 8 million. The company's shareholders' meeting decided to pay more than EUR 76 million to the state budget, of which EUR 60.9 million in dividends for the use of state capital and EUR 15.2 million as corporate income tax.

Last year, LVM cultivated young stands in an area of 31.2 thousand hectares, which is 2.1 thousand hectares more than a year before. Forest sowing and planting were carried out on 9.3 thousand hectares, slightly exceeding the results of the previous year.

“The events of 2019 allowed us to assess the company's readiness for non-standard situations. The fall in demand and the price of wood in 2018, the consequences of which were also felt last year, introduced adjustments to the company's plans and affected revenues in certain sectors. At the same time, the changing climatic conditions made it very difficult to develop winter fellings. However, despite the lack of frost, thanks to the investments made in the forest road logistics network, we were able to provide our customers with a continuous flow of round timber; we also worked successfully in other strategically important areas, including the sale of forest tree seedlings and chips. At the moment, we see that both the emergency situation and price fluctuations will be among the factors influencing the industry, which is why I am cautious in my forecasts for this year,” says Roberts Strīpnieks, LVM President.

In addition to the sale of round timber in the amount of 6.5 million cubic metres, 56.3 million forest tree seedlings were sold in 2019, which is 3.9 million more than in the previous year. 53% or 29.8 million seedlings were sold to private forest owners, of which 13.9 million seedlings were exported.

Assessing the volumes of wood chips, 481 thousand megawatt hours were sold in 2019, exceeding the volumes of 2018 by 74 thousand megawatt hours.

Investments in forest infrastructure

Last year, LVM investment in forest infrastructure amounted to EUR 46 million, which is part of the total investment programme in the amount of EUR 56 million. The largest share of investment was directed to forest roads reaching EUR 40 million, while EUR 6 million were invested in the renovation of drainage systems. Thanks to sustainable forestry, high-quality seedlings and a well-maintained drainage system, it is planned to increase forest productivity by 25% by 2050.

With the establishment of its own laboratory for conformity assessment of mineral mixtures, LVM can manage mineral resources more efficiently in the long run and increase sales accordingly. Last year, revenue from LVM Zemes dzīles services reached EUR 5.5 million.

“I am grateful to every staff member who has contributed to the company's growth, as well as to our customers, service providers and partners for their trust, loyalty and responsibility. Today, we can enjoy the result of sustainable forest management over a period of more than 20 years, and it is important for the forest sector, the Latvian economy and the entire society. Let us make Latvia a prosperous country!” says LVM President Roberts Strīpnieks.