The 2021 unaudited profit of the municipal company “Rīgas Meži” has reached 2.5 million euros. This is the company’s best financial performance indicator in recent years. Furthermore, last year’s profit is almost four times higher than in 2020, when it was only 649 thousand euros. Currently, the company’s strategic goal, as well as its financial and non-financial objectives for the coming years, have been approved by the Riga City Council. These are now being incorporated into the company’s medium-term strategy.

“These results have been achieved thanks to both the employees and the company’s new management team, which has been in place since the beginning of last year. During this time, a new budget planning and control system has been introduced at “Rīgas Meži” – financial flows are closely monitored every month, revenues are analysed, more effective technological solutions are being implemented, and various expenditure items have been optimised, including administrative costs,” notes Toms Auškāps, Chairman of the Board of “Rīgas Meži”.

“Throughout the year, we have been working purposefully to ensure the company’s growth. Only by operating profitably can we maintain the green infrastructure of Riga and its surroundings in a well-tended manner, making it not only aesthetically beautiful but also useful for leisure. We place equal importance on the company’s development and good governance, as well as on the sustainable management of forests and all areas, so that the values held within them are preserved for future generations and contribute to achieving climate neutrality goals,” says Anita Skudra, Chairwoman of the Board of the company. She expresses her special gratitude to all her colleagues at “Rīgas Meži” for their selfless work and what was achieved last year.

Last year’s excellent financial performance is illustrated by the fact that net turnover was approximately 600 thousand euros lower than in 2020 (17.6 million euros in 2021, compared to 18.2 million euros in 2020), yet profit in 2021 was nearly four times higher. In 2021, the company’s gross profitability was 18.6%, and net profitability was 14.4% (compared to 12.5% and 3.6% in 2020, respectively).

Some of the largest revenue streams came from timber (roundwood) production and land leasing. Significantly, these figures were achieved last year while working with one of the historically largest reductions in subsidies. Specifically, in 2021, the company received only 43% of the necessary 3.3 million euros from the municipality to carry out the functions of its “Gardens and Parks” division. The company provided the remaining amount of 1.87 million euros itself.

To ensure that financial information remains comparable to previous periods, these figures have been prepared in accordance with the requirements of the “Annual Reports and Consolidated Annual Reports Law”. The financial report for 2021 will be prepared for the first time in accordance with International Financial Reporting Standards (IFRS). Work is currently underway to determine the fair value of the company’s biological assets.

Anita Skudra: “To ensure the stable growth of the company, as well as the economic, ecological, and social interests of the municipality and Riga’s residents, “Rīgas Meži” is working on the company’s further strategic development. This is essential, as amendments have been made to the “Forest Management Plan”, which has resulted in reduced logging volumes, increased focus on even more careful forest maintenance, and the development of recreational areas. It is also necessary to strengthen good corporate governance and implement modern technologies”.

Therefore, the company is carefully following its established key development directions and principles:

• a year ago (19.01.2021), the Riga City Council Housing and Environment Committee approved a new general strategic goal for the company. This relates to ensuring the economic, ecological, and social interests of the municipality and Riga’s residents, as well as the modern management of the territories in its care: https://rigasmezi.lv/lv/publiskojama_informacija/nefinansu_informacija/?doc=11831;

• at the beginning of this year (25.01.2022), the representative of the “Rīgas Meži” capital share holder approved three of the company’s financial goals: to ensure financial stability. Liquidity ratios of no less than 1; net profit margin of at least 4% of turnover, with a growth trend, by increasing the company’s operational efficiency; and, in the medium term, total investment volume of at least equal to total depreciation, including by attracting European Union fund financing;

• at the beginning of this year (12.01.2022), the Riga City Council approved four specific non-financial goals for the company: sustainable management of the territories under the management of SIA “Rīgas Meži” (forests, specially protected nature areas, gardens, and parks) based on an assessment of biodiversity, economic, and social values; effective implementation of environmental education programmes; development of professional competence of employees by increasing qualifications, motivation, and the quality of the work environment; and strengthening capacity in the fields of research, development, and digitalisation, including as far as possible by participating in smart city solution and innovation ecosystem projects, as well as cooperating with the Riga city municipality in the development and implementation of centralised ICT solutions and the provision of open data;

• to ensure the company’s long-term development, including incorporating strategic, non-financial, and financial goals, the “Rīgas Meži” medium-term operational strategy until 2025 is currently being updated. Its key ideas relate to the company as a modern manager of the Riga metropolitan green infrastructure, focusing on knowledge- and technology-intensive growth, and using innovative and sustainable approaches in managing the company’s territories.