Profit of private forestry rises 17% in 2017

The positive trend in forest industries was also reflected in the profitability of non-industrial private forestry in 2017.

The operating profit of non-industrial private forests increased to EUR 126 per hectare, which was nearly 17 per cent above the average operating profit in the preceding 10 years, said a press release issued by National Resources Institute, Finland (Luke).

The return on investment in wood production increased to more than six per cent.

The higher operating profit increased felling in non-industrial private forests, improved prices of standing sales, and fewer investments.

The total profit was EUR 1,682 million, showing an increase of seven per cent from that in the previous year when prices were converted using the cost of living index. This was 17 per cent higher than the average of the preceding ten-year period but lower than that in the 2007 peak year.

In southern Finland, the operating profit of non-industrial private forestry was EUR 165 per hectare on average. The highest profit of EUR 245 per hectare was made in the Tavastia Proper region. In northern Finland, in the regions of Northern Ostrobothnia, Kainuu and Lapland, the operating profit was EUR 49 per hectare on average.

In southern Finland, the operating profit increased by six per cent as a result of increased profit from the sales of wood. The operating profit increased by more than 16 per cent in northern Finland. This increase was also affected by fewer investments in wood production and higher subsidies.

“These significant changes in northern Finland can partly be explained by information about work types, subsidies and total costs being entered in statistics at different times,” said Esa Uotila, a researcher of Luke.

According to Uotila, subsidies are entered in statistics after they have been used, while costs are only entered during the year when the project in question is completed.

The operating profit of non-industrial private forests is calculated by deducting investments in wood production and estimated administrative and other costs from stumpage earnings.

The total value of non-industrial private forests calculated on the basis of the prices of standing sales and tree volumes was EUR 45.5 billion in 2017.