12 • 11 • 2020

LVM Supervisory Board has Reviewed the Nine-Month Results of JSC “Latvia's State Forests” Operations

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In the first nine months of 2020, the profit of JSC “Latvia's State Forests” (LVM) before corporate income tax amounts to 65.8 million euros, while the company’s turnover exceeds 260 million euros. The company has performed the planned works in forest restoration and tending, grown 54 million forest tree seedlings and achieved the forecast results of timber sales.

Having reviewed the results of this year's operations, LVM Supervisory Board has concluded that LVM has managed to exceed the expected revenue, as well as reduce its costs. Thus, in spite of the emergency situation and other challenges, the company's operating goals will be met this year – both in terms of the volume of timber delivered, which is important for the forest industry, and in terms of income, which is important for the company and the State as its owner.

LVM's revenue in the first nine months of 2020 accounts for 261.2 million euros, of which revenue from the sale of wood products – round timber assortment, growing trees and wood chips – 247.8 million euros. The revenue from the sale of round timber assortments was 31.4 million euros smaller than in the corresponding period of the previous year, and it is due to the lower timber sales prices throughout Europe. The company sold 5.45 million cubic metres of round timber assortment and 180 thousand cubic metres of growing trees, as well as 289 thousand megawatt-hours of chips. Revenue from the sale of mineral materials and their mixtures to external customers during this period amounted to 1.6 million euros, selling a total of 430 thousand cubic metres of these materials.

“The first nine months of this year have been a challenging time for business, not only in Latvia, but all over the world. Of course, as compared to other industries, where the decline in both volume and profit reached 50%, in some cases even 100%, this situation is not so dramatic for LVM. In our opinion, stability could be ensured thanks to the historically correct management decisions. Therefore, the company has managed to perform the scheduled works and earn a profit that is higher than planned,” says Jurģis Jansons, Chairman of LVM Supervisory Board.

Thanks to favourable weather conditions, afforestation could be started already in March; 10.5 thousand hectares of young forest stands have been planted this year. In turn, young stands have been tended in an area of 20.3 thousand hectares.

In the first nine months of the year, 39.6 million euros were invested in forestry development, of which 32.8 million euros in forest infrastructure: construction of roads and bridges, renovation of drainage systems and production of wooden shield carriageways. 155 kilometres of forest roads have been put into operation; forest drainage systems in a total area of 3.1 thousand hectares have been renovated and rebuilt.

People in Latvia highly value the opportunity to go outdoors to enjoy the rest in the fresh air. Thanks to the proceeds from the sale of wood, LVM maintains more than 300 free recreation sites equipped with picnic places with tables and benches, wooden footbridges and observation towers, which improves the quality and accessibility of recreation for everyone. By the end of September, a total of 145.3 thousand people had visited Latvia’s State Forests Nature Park in Tērvete and Pokaiņi Forest, which are particularly popular among families with small children.