“As of the end of the second quarter, the enterprise’s revenue from the sale of unprocessed timber reached UAH 8.9 billion.
“Forests of Ukraine” increased contributions to the state and local budgets by 40%! Tax payments in the first half of the year rose by over UAH 1.7 billion compared to the same period in 2024!
Post-tax profit is used to purchase new firefighting equipment (including 10 large fire trucks in the immediate plans), to develop modern seed centers and supporting infrastructure (forest roads, recreation sites, etc.), to restore forestry enterprises on de-occupied territories, and to mechanize harvesting (harvesters, forwarders, tractors, etc.).
The semi-annual contracts introduced at the initiative of SFE “Forests of Ukraine” management have proven highly successful. Under the forward contracts, buyers took delivery of the entire timber volume achieving a fulfillment rate of 101%!
Thanks to the forward contracts, wood processors can reserve the volume of raw material they need and lock in the price. The enterprise also benefits: the security deposit, refunded only after 97 % contract fulfillment, motivates buyers to take the entire contracted volume.
Next year, the share of forward contracts will be increased, with annual contracts also planned.
Under quarterly contracts for the second quarter, more than 95% of timber was shipped, which is a very high indicator, given the specifics of the sales system (unharvested timber is sold at auction) and the terms of the contracts (the buyer has the right to select up to 90% of the volume).
Most instances of non-fulfillment are attributable to buyers, who either refuse the goods or fail to make payment on time.
SFE “Forests of Ukraine” applies a flexible settlement policy, recognizing that producers may face working capital constraints since they do not receive immediate payment for the timber products they deliver.
But there are limits. Therefore, on occasion, the enterprise must suspend deliveries until the buyer settles outstanding debts, which to some extent impacts the contract fulfillment rate. Nevertheless, these are isolated incidents.
Overall, the timber market is currently balanced. The rapid appreciation of the euro has significantly strengthened Ukrainian exporters’ positions, so the forecasts for the second half of the year are more than optimistic,” says Yurii Bolokhovets.