The financial report for the first half of 2021 for SIA “Rīgas Meži” indicates an improvement in the company's financial performance. Specifically, during this period (January-June 2021), the company's turnover was 9.07 million euros, with a profit of 847 thousand euros (compared to 9.83 million euros and 577 thousand euros respectively during the same period last year). Since the beginning of this year, the company has been closely monitoring its operations, particularly cash flow, by analysing revenues on a monthly basis, reducing costs, and streamlining and optimising other items, including administrative expenses, says the company's Board Chairwoman, Anita Skudra.
The largest revenues for “Rīgas Meži” over the six months were generated from the sale of roundwood and sawn timber, amounting to 5.7 and 2.9 million euros respectively (total: 8.6 million euros). During this time, more than 500 thousand tree seedlings were also sold, for a total sum of 104 thousand euros.
By closely monitoring market developments and refining auction terms, a result unprecedented in the company's history has been achieved – the average price of roundwood sold in the first six months of 2021 is 25% higher than last year. Similarly, the average price of sawn timber sold has increased by 36% compared to the previous year.
“It should be noted that this is a unique time in the timber market – price fluctuations in the global market are very significant and often unpredictable even on a monthly basis. So far, we have successfully managed these fluctuations by both monitoring the situation and flexibly adapting our company’s operations accordingly. Consequently, the first half of the year has ended positively. However, there is still much work ahead to improve financial indicators and to develop the company into a modern and sustainable capital society,” explains A. Skudra.
The company's financial results would have been better had there not been such a significant reduction this year in the grant for the “Rīgas Dārzi un parki” (Riga Gardens and Parks) division, which the municipality pays the company for services rendered. To create and maintain 116 garden and park sites, a total of 3.3 million euros would be required this year, of which the grant provided 1.43 million euros, or just under 43% of the required amount. The remaining sum is covered by “Rīgas Meži”.
The main issues currently facing “Rīgas Meži” involve a change in the management philosophy for city forests, gardens, and parks, based on good corporate governance, openness, transparency, and sustainability. For example, the company’s Forestry Department, in collaboration with forest experts, has prepared improvements to the “Forest Management Plan for 2022–2023”, which envisages allocating larger areas in the forests around Riga for recreation, nature conservation, and scientific research in the long term, while significantly restricting timber harvesting. This will also help improve the biodiversity of the properties and increase their economic and social value, as confirmed by the international FSC and PEFC forest management certificates awarded to the company.
Meanwhile, specialists from the “Dārzi un parki” division are planning long-term segmentation and sustainability improvements for the managed areas. For example, it is envisaged that there will be flower beds where plantings are changed throughout the year, as well as areas where perennial plants will be cultivated or even natural grasslands restored.
Collaboration with the industry, the municipality, local neighbourhoods, residents, and educational institutions is gradually taking on a significant role in the new operational philosophy of “Rīgas Meži”. Therefore, the company will devote even greater attention to the development of environmental, recreational, and educational projects. As a result, it is planned to increase the number of recreational facilities and reduce the funding required to achieve non-financial objectives.