State forest company puts over €35 million from 2019 profits into coffers
The State Forest Management Center (RMK) is to pay over €35 million, around half its 2019 profit, to the state in the form of a dividend, following a better than expected 2019, Baltic News Service reports.
The RMK supervisory board endorsed the company's audited annual report for 2019, which reported a revenue of €218.7 million and an operating profit of €75.6 million.
The previous year's figures were €209.1 million and €88.9 million respectively, according to BNS.
The bulk of RMK's income came from timber sales, thanks to buoyant prices in the first half of 2019.
The breakdown of timber sales was 47 percent as logging, 33 percent pulp wood, 16 percent fire wood and 5 per cent wood chippings, totaling 3.9 million cubic meters.
Marku Lamp, RMK supervisory board chair, said RMK's results in 2019 evidenced by earning nearly twice the planned profit.
"When making the dividend payment proposal, all members of the supervisory board unanimously emphasized that, besides fulfilling the state budget obligations, it is equally important to put the other half of the earned money back into the forest so that it can be managed as profitably as possible in the future as well," Lamp said, according to BNS.
As for the remaining operating profit which has not been paid to the state, the RMK plans to invest €28.5 million into forest plant production, roads and drainage systems.
"The RMK will also purchase land under nature conservation from private forest owners, where economic activities are limited to preserve rare natural features, for €5 million," Aigar Kallas, RMK board chair, said, BNS reports.
Misuse of Estonia's forest including over-felling has long been a controversial topic.
In the second half of last year, the sales price of timber fell by a tenth compared with 2018, due in part to extensive damage caused by the European spruce bark beetle in Central Europe.
Looking ahead, prices in the wood market are projected to stabilize according to current forecasts, with 2020 revenue expected to be €177.1 million, and operating profit €25.2 million.
Just under half of Estonia's forested land, and about 30 percent of the total land area, is under RMK management, BNS reports.
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Editor: Andrew Whyte
