The state forest manager, joint-stock company “Latvijas valsts meži” (LVM), worked with a net profit of 242.2 million euros last year, which is 130.7 million euros more than was achieved in 2021, when it reached 111.53 million euros.
This is evidenced by the audited 2022 report approved by the LVM shareholders' meeting. It shows that the company ended 2022 with a net profit of 242.2 million euros. During this period, the company's turnover reached 566.6 million euros (405.29 million euros in 2021), which is the largest turnover in the company's history.
The increase in revenue was mainly influenced by the selling prices of timber assortments – the rapidly rising demand for wood products in Europe and globally in 2022 significantly increased timber prices in Latvia as well; consequently, the average price of roundwood assortments last year was 44% higher than in 2021, whereas a drop in timber prices is currently being observed this year.
At the company's shareholders' meeting, a decision was made to pay out 203.1 million euros to the state from LVM’s 2022 profit, including 162.5 million euros in dividends for the use of state capital and 40.6 million euros in corporate income tax.
The holder of LVM capital shares, State Secretary of the Ministry of Agriculture Raivis Kronbergs, acknowledged: “In the time we are living in, our country has to overcome many challenges, so with gratitude to the company for the work it has done, I can say that “Latvijas valsts meži” will provide the largest contribution to the state budget from last year's operations of all state-owned companies. No less significant is the work the company has done in strengthening our country's energy independence and moving towards carbon neutrality.”
“Although last year was very complicated, the economic indicators achieved by LVM in 2022 – the company's turnover and profit – are the largest in the company's history. I would like to say a special thank you to the employees of “Latvijas valsts meži”, who worked cohesively to achieve the company's goals. The excellent results of “Latvijas valsts meži” were determined by the situation in the European and global timber market, the professionalism of the staff, the development of innovations introduced in the company, and close cooperation within the forest industry. “Latvijas valsts meži” sells the company's products on the Latvian market, so the company is only as strong as the Latvian forest industry,” emphasized Pēters Putniņš, Chairman of the Board of a/s “Latvijas valsts meži”.
6.59 million soldm³
In 2022, 6.59 million m³ of timber were sold to Latvian wood processing companies, including 6.39 million m³ of roundwood assortments, which is 0.25 million m³ less than in 2021. The decrease can be explained by the rapidly increasing demand for forestry and transport services from private forest owners, which created a deficit in the service market and prevented the initially planned volume of assortment sales from being reached. In the reporting year, a total of 661 thousand megawatt-hours of wood chips were sold, generating 17.5 million euros in revenue.
Compared to 2021, revenue from wood chip sales was 9.6 million euros higher. This was influenced by both a higher sales volume of 69 thousand megawatt-hours and an average selling price that was 13.09 EUR/Mwh higher. All energy wood chips produced in 2022 were supplied only to local wood processing and energy production companies, thus providing support to Latvian heat energy producers. In 2022, forest regeneration was carried out, as well as plantation forest establishment and forest cultivation on an area of 19.2 thousand hectares, including forest regeneration by planting and sowing on 13.2 thousand hectares. Young stands were tended on an area of 28.6 thousand hectares, while agrotechnical tending of regenerated forest areas was carried out on 30.3 thousand hectares. During the reporting year, 499 thousand cubic metres of drainage ditches were cleared of silt.
61.4 million seedlings grown
In 2022, a total of 61.4 million forest tree seedlings were sold, 89% or 54.9 million of which are containerized seedlings and seedlings with an improved root system. 32.7 million seedlings were sold for forest regeneration in areas managed by LVM, 13.8 million were sold to private forest owners in Latvia, and 14.6 million were exported. 2.2 million euros were invested in 2022 to increase the sales volume of high-quality forest tree seedlings.
Two irrigation systems with a long-day lighting system were installed at the Mežvidi nursery, and the construction of a seedling sorting and storage complex was started. Investment projects for the construction of seedling cold stores have been updated for the Pope and Valmiera nurseries, the company's information indicates.
Mineral materials provide 4 million euros
Revenue of 4.0 million euros was generated from the sale of mineral materials and their mixtures, exceeding 2021 revenue by 1.6 million euros. In 2022, a total of 1559 thousand cubic metres of mineral materials and their mixtures were sold, which is 592 thousand cubic metres more than the year before. The production and trade volumes of various mineral materials are increasing every year, part of which has been used in the construction of socially significant objects. A significant volume of mineral materials – 613.7 thousand cubic metres – was sold in 2022 for the Ķekava bypass project.
37.7 million euros invested
In 2022, the company invested 37.7 million euros in forest infrastructure facilities – the construction of forest roads and bridges, the renovation of forest drainage systems, and the creation of wooden shield roadways. In the reporting year, 31.9 million euros were invested in the construction of forest roads, and 339 km of forest roads were put into operation.
Functioning forest drainage systems play a significant role in CO2 sequestration. To increase carbon sequestration, 5.1 million euros were invested in the renovation of forest drainage systems, design work was carried out on an area of 16.0 thousand hectares, while facilities covering 17.7 thousand hectares were put into operation.
To preserve biodiversity, LVM not only manages protected natural territories (including Natura 2000) and micro-reserves, but also areas such as forest stands of genetic resources for forest tree species. These forest stands make it possible to preserve the genetic diversity of certain species and provide a base for forest genetics, breeding, and seed-growing measures to increase forest productivity and quality.
When planning forest work, LVM identifies new habitats of protected species (vascular plants, mosses, lichens, fungi), nesting and lekking sites of protected birds, and forest, bog, water, grassland, and dune habitats of European Union importance every year. To ensure their appropriate protection and necessary management, additional nature conservation areas are also designated to improve the quality of species' habitats. Environmental surveys were carried out on a total area of more than 12 thousand hectares.