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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 09:06

LVM Half-Year Profit Reaches 49.2 Million Euros

BC, Riga, 24.08.2020.Print version
The Supervisory Board of JSC “Latvia's State Forests” (LVM) has reviewed the results of the company's work in the first six months of this year; the results show that LVM revenue accounts for 173.7 million euros, whereas profit before taxes – 49.2 million euros. The profit ratio exceeds the previously approved half-year plan by 25.9 million, in turn the revenue exceeds the plan by 15.7 million.

“Due to the COVID-19 pandemic, the first half of the year was very challenging also for LVM as many Western European countries, which are Latvia's main export markets, entered a recession with gross domestic product shrinking by 10–20%. As a result, there was a significant decrease in the demand for wood and, accordingly, in the average price of round timber sold by LVM, with the price drop reaching as much as 24% in the first half of the year. In these circumstances, LVM Supervisory Board appreciates the company's work, which allowed the company to exceed the approved plans, support the ability of Latvian companies to maintain their market positions and provide significant profits,” says Jurģis Jansons, Chairman of LVM Supervisory Board.


Intensive reforestation

This year, LVM took advantage of the favourable weather conditions and already in March started planting forest stands, thus restoring 10.5 thousand ha of forest area in the first half of the year. By comparison, the restored forest area accounts for a size of almost 15 thousand standard football pitches. In turn, targeted tending of young stands was performed in an area of 17.6 thousand ha.


LVM adjusts its operations to the conditions of the pandemic

The decline in demand in both the domestic and export markets caused by the COVID-19 crisis created significant uncertainty, leading some timber buyers to suspend or change their purchasing plans. In these circumstances, LVM adjusted its operations and in the second quarter of the year, logging was carried out mainly in stands that were damaged by bark beetles, whereas previously prepared round timber products were removed from forest in order to reduce the residues of conifer assortments and limit the spread of pest.


Sales of seedlings are increasing; chips are sold in smaller volumes

In the first half of this year, sales of forest tree seedlings increased, reaching 51.2 million units and exceeding the approved half-year plan by 3.3 million.

 

In turn, revenue from the sale of wood chips decreased by 133 thousand euros as a result of unfavourable market conditions, namely, cheap wood chips from Belarus were available on the market, which reduced their market price in Latvia. In these circumstances, LVM reduced the sales of wood chips.

 

 






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