State forestry company doubled its operating cash from €15 million in 2016 to €30 million in 2017
Coillte, Ireland’s largest commercial forestry and land solutions company, today announced its annual results for the financial year ended 31 December 2017.
Key results included Coillte doubling its operating cash from €15 million in 2016 to €30 million in 2017. Excluding large land transactions EBITDA increased by 6% from €80.3 million in 2016 to €85.2 million in 2017. When large scale land transactions are included EBITDA achieved was €85.2 million in 2017 compared to €98.3 million in 2016. The company has now reduced its reliance on large scale land transactions. A revenue of €298.7m was achieved, 3.8% ahead of last year.
Outgoing chief executive, Fergal Leamy said,
Our key focus in recent years has been on generating sustainable operating cash flow and increasing the return to our shareholder. Significantly we doubled our operating cash performance in 2017 to €30 million. This continued growth in operating cash is crucial to ensuring we achieve a 5% cash yield on our €1.4 billion asset base by 2020.
Transformation and growth
After Coillte restructured its business to three autonomous business divisions it achieved an annual overhead savings of €16 million in 2017 including €2.6 million interest cost savings achieved following the more favourable financing facilities agreed at the end of 2016.
Commenting on the results Mr Leamy said:
This is the third year of our transformation programme and we are making very strong progress on our key financial and operational metrics. The company has now reduced its reliance on large scale land transactions and, excluding these transactions, our EBITDA in 2017 was 6% ahead of 2016.
Wind farm assets
In September Coillte sold its wind farm assets for an equity price of €136.1m (an enterprise value of €281 million), more than five times the original investment. Remarking on this, Mr Leamy said,
Our potential in this area illustrates the value we can create from every hectare of land we own to ultimately deliver enhanced value for our shareholder, the State. We intend to recycle the capital achieved from the sale of our four operating wind farms back into the business with a focus on our core forestry activities, co-funding of new wind development opportunities and other strategic opportunities that will enhance the overall value of the Group.