Chief Executive’s Review

2010 saw the pace of change across the Group quicken, as we continued our transformation into a high performance organisation. The markets in which we operate continued to be challenging but 2010 also offered opportunities which we were able to seize.

The strong financial performance for 2010, with profit of €32.1m, came about as a result of a number of factors, including strong demand for logs and higher wood panel (particularly OSB) prices coupled with tight control of costs.

Key achievements in 2010 included:

  • We continued to work with our sawmill customers during 2010 to promote Irish timber in the UK and were in a position to benefit from the increased demand.
  • Our panel products’ business was able to increase prices across some of its product range and export significant volumes of material. On average over 80 truck loads of our panel products are being exported every day.
  • We exceeded our target of €7.5m in revenue generated from new products and continued to invest in innovation so we can add value to our great fibre resource.
  • 2010 saw the completion and sale of our first joint venture wind farm at Garvagh Glebe in County Leitrim.
  • Excellent progress was made in securing planning permissions for our wind portfolio.
  • We completed a programme of building over 100 new telecommunications masts as part of the National Broadband Scheme to help bring broadband to the whole country and will continue to develop this business in 2011.
  • Our positive contribution to the health and well being of the nation through the provision of outdoor recreation and nature conservation. Highlights included National Trails Day and the opening of a new landmark walking route - the Dublin Mountains Way. Our ‘Healthy Forest, Healthy People’ exhibition continued to tour the country showcasing the positive contribution Coillte makes.

These achievements demonstrate that we are delivering on our core purpose - we are managing a unique set of natural resources in innovative and sustainable ways. But we can and will do more; that is the challenge we face in 2011 and beyond, in executing our strategy across our four main areas of business: forestry, panel products, land management and renewable energy.

The transformation of Coillte continues and we will maintain momentum in 2011. We are working to address the fundamental issue of our costs and detailed work is going on in each business area to address this.

Outlook

The economic environment in Coillte’s core markets of Ireland, UK and the EU remains difficult with low levels of GDP growth rates forecast for 2011.

Log prices have already reduced in Q1 2011. Similarly, OSB prices performed strongly in 2010 and while underlying demand remains strong, some decline is expected in 2011. MDF demand remains fragile with no significant price recovery forecast for 2011.   

We are facing the challenge of volatile markets and uncertain exchange rates. We will continue to work closely with our customers to ensure we are meeting their needs, we will continue to introduce new products and we will lower our costs further in 2011.

 

David Gunning
Chief Executive