Coillte delivered an operating profit of €64.4 million in 2016, an increase of 6.6 per cent on the previous year. Operating cash flow for the same period jumped 130 per cent, from €6.5 million to €15.2 million.
According to a statement from the company, 2016 saw “significant changes and investments” to help the business. One of the more substantial cost-saving measures undertaken was the change in financing facilities, which is said to have resulted in interest cost savings of over €3 million per year. Additionally, a “significant structural shift in cost base” will deliver savings of about €15 million per year for the next two years.
"Historically, operating cash has been negative of break-even. The significant growth in operating cash gives us further confidence that we can achieve our 5 per cent cash yield target by 2020 and we have set ourselves the challenge of more than doubling operating cash flows in the next two years", said Coillte's chief executive, Fergal Leamy.
Earnings before interest, taxation, depreciation and amortisation reached €98.3 million last year, an increase on the previous year of 10 per cent. However, net debt also increased in 2016 compared with the previous year. The total figure of €168 million represents an increase of 9.09 per cent on 2015.
In 2016 Coillte made new investments. A €59 million smartply-manufacturing facility was commissioned, and the group also invested €400 million with its partners in wind farms.
The group is pleased with its performance in 2016, but it also notes the uncertainty associated with Brexit. “While underlying demand in the UK economy has remained strong since the referendum in June 2016, UK consumer confidence is likely to weaken during 2017 as the implications of a ‘hard’ Brexit are better understood and inflation increases significantly, fuelled by a weaker sterling.”
But Brexit-related issues didn’t appear to hamper the group too much in 2016 when it increased the dividend it paid to the state by 24 per cent to €6.2 million in 2016.
