The shareholders' meeting of AS “Latvijas valsts meži” (LVM) has approved the audited annual report for 2023. It shows that in 2023 the company achieved a turnover of 626.0 million euros and a profit of 220.8 million euros. LVM will pay 80% of the profit earned into the state budget: 141.34 million euros will be paid out in dividends and 35.33 million euros as corporate income tax on the dividend payment.
2023 was a year of difficult conditions on the timber products market. By the end of the year, the average prices of the roundwood assortments sold by LVM had already fallen by 12% compared with the start of the year. However, long-term cooperation agreements concluded earlier made for a financially successful start to the year.
In 2023, 6.94 million cubic metres of roundwood assortments were delivered to wood processing companies, and 0.13 million cubic metres of standing trees were sold. In total, the amount of carbon accumulated in the industrial roundwood supplied to the market in 2023, expressed as CO₂ equivalent, is 6.4 million tonnes.
Raivis Kronbergs, State Secretary of the Ministry of Agriculture, which holds the LVM shares, notes: “Despite the difficult geopolitical situation and the challenges on the markets for Latvian timber products, in 2023 AS “Latvijas valsts meži” achieved outstanding financial results. This successful performance made it possible to decide to channel more than 176 million euros of the company's profit to the state budget, which is a particularly significant contribution at a time when the state needs funds both to strengthen national defence capabilities and to promote development, as well as to support the social sphere. The company also made significant investments last year in maintaining and developing recreation sites that are freely accessible to all the country's inhabitants, and in restoring habitats of European Union importance and species habitats. I would like to extend particular thanks to all the employees of “Latvijas valsts meži” and to the company's management for their contribution to achieving these high results.”
Outstanding quality seedlings for the new forest
LVM manages some of the most modern tree nurseries in Europe, where genetically high-value, outstanding quality young forest tree seedlings are grown from specially selected seeds. In 2023, a total of 53.6 million forest tree seedlings were delivered to customers. 26.0 million, or 48%, were sold to external customers, including 9.6 million forest tree seedlings exported to other countries. 27.6 million seedlings were used for the regeneration of LVM forests, which last year was carried out over an area of 18.9 thousand hectares.
Increased CO₂ sequestration
In 2023, young stands were tended over an area of 39.1 thousand hectares, promoting the growth of a high-quality new forest and its better adaptation to future climate change. Last year, young stands were tended over 10.5 thousand hectares, or 37%, more than the year before. Like active forest tending, the restoration of drainage systems also promotes CO₂ sequestration. In 2023, forest drainage system facilities covering 14.3 thousand hectares were put into operation.
Forest roads – for timber haulage and nature conservation
Forest roads are essential for forest management – they enable timber haulage and provide access to areas where forest is being regenerated or biotechnical measures are being carried out to maintain and restore habitats. During the reporting period, 276 kilometres of forest roads were put into operation and forest road construction designs with a total length of 155 kilometres were approved. The new roads will make forest management easier and at the same time allow a more rapid response to dangerous situations in the forest, which is especially important during the fire-hazardous period.
Subsoil resources used for significant construction projects
Through the responsible management of subsoil resources, 810 thousand cubic metres of mineral materials and products made from them were sold in 2023. The mineral materials obtained were used in the construction of LVM forest roads and in state, municipal and private construction projects. All LVM mineral extraction sites have a certified production process, which supports traceability of the origin and quality of mineral materials and their mixtures from the moment of extraction to the finished mixture.
Growing demand for IT solutions
Last year saw growing demand for services based on information technology solutions. Revenue from developments and services for external customers in the company's “LVM Business System Solutions” business line, better known for its various geospatial information system products under the LVM GEO brand, exceeded 2022 revenue by 32%, reaching 0.8 million euros.
LVM GEO is intended for the accumulation, processing, analysis, presentation and transfer of various types of geospatial data. Using LVM GEO allows customers to carry out their business activities more efficiently, promoting business development.
Habitats of EU importance and species habitats restored
Preserving natural diversity is an integral part of LVM forest management. LVM manages 20.8% of its total forest area and 25.2% of the total area of all its land (forests, bogs, agricultural land, water bodies, etc.) with a nature conservation objective.
In 2023, LVM environmental planning specialists and environmental experts surveyed economic activity areas and monitoring sites covering 14.8 thousand hectares. Last year, LVM specialists recorded several thousand sites of rare and protected species in state forests: 2762 sites of vascular plants, 1467 of mosses, 763 of lichens, 721 of fungi and 179 of invertebrates.
To protect the habitats of large birds and capercaillie, micro-reserves covering a total of 37 300 ha have been established in state forests in accordance with legislation; in addition to what the law requires, the company has set aside a further approximately 7800 hectares in state forests for the protection of the habitats of birds nesting in large nests and approximately 109 000 hectares for the protection of capercaillie habitats.
In cooperation with other partners, in 2023 the company continued work on three environmental projects co-financed by the European Union (EU), the implementation of which began in 2021. One of the three environmental projects – “Implementation of management measures in specially protected nature territories and micro-reserves to improve the conservation status of habitats and species” – was completed at the end of 2023 after three years of intensive and methodologically complex work. During this project, LVM carried out significant biotechnical work in a total of 14 specially protected nature territories covering 800 hectares, improving and restoring habitats of EU importance and species habitats.