The state enterprise Lesy České republiky (LČR) almost quadrupled its gross profit to CZK 2.26 billion in the first quarter of this year, from CZK 613 million last year. According to the company, the increase in profit and sales was reflected in the increase in wood prices and the introduction in February of direct sales of wood to small and medium-sized sawmills. Revenues of Lesy ČR increased by 61 percent to CZK 4.1 billion from CZK 2.55 billion. The company’s spokeswoman Eva Jouklová said yesterday. The forests of the Czech Republic manage almost half of the forests in the Czech Republic.
According to the company, there is great interest in contracts for the direct sale of wood among saws. Until February, smaller lumber mills could access state lumber by purchasing it at auctions. “The distribution of risks in the timber trade is also positive, which is related to the increase in the number of customers and also to the better provision of payments with guarantees,” the spokeswoman said. The company offers wood to regional saws for direct sales, which it trades on its own. The offer does not include wood, which is harvested in state forests on the basis of a so-called comprehensive contract and subsequently sold by forestry companies.
The company’s revenues, driven by rising wood prices, rose sharply in the first quarter, despite the fact that logging fell by 20 percent year-on-year to 2.29 million cubic meters, with the decline of the bark beetle calamity. For the whole of 2021, logging in state forests also fell by a fifth to 11.4 million cubic meters. This year, a further decline to about ten million cubic meters of wood will probably follow. About 30 percent of them fall on bark wood.
Last year, Lesy ČR increased its net profit to CZK 2.74 billion from CZK 44 million in 2020. Last year, the main reason for the increase in profit was the increase in wood prices. The company also received subsidies from the state for the restoration of bark beetle-destroyed forests. Last year, Lesy ČR almost returned to the level of the last year before the bark beetle calamity. In 2017, they generated a net profit of CZK 3.08 billion.
In the years 2018 to 2020, the profitability of the Czech Republic was fundamentally affected by the bark beetle calamity associated with the fall in wood prices. In 2019, the company suffered a loss of CZK 790 million and in 2020 it maintained a modest profit of 44 million crowns only thanks to the acceptance of state compensation for the reduction of wood prices due to the calamity of CZK 2.3 billion.
The forests of the Czech Republic have been without a general manager since December 22 last year. At that time, Marian Jurečka (KDU-ČSL), in charge of the management of the Ministry of Agriculture, dismissed CEO Josef Vojáček and temporarily entrusted Jiří Grod, the forest administrator of the Vítkov Forest Administration in the Opava region, to manage the company. Subsequently, the ministry announced a tender, in which five candidates applied. However, the Minister of Agriculture Zdeněk Nekula (KDU-ČSL) did not select anyone in it. He later announced that the office would prepare a new competition.
Source: CTK
