Stakeholder Update - VicForests Annual Report - 19 October 2017
VicForests Annual Report was tabled in parliament on Thursday 19 October 2017 with our results from the 2016-17 financial year.
We are proud to have reported a positive operating result before tax of $1.5 million after a year that presented many operational challenges. This result highlights the excellent work our staff and contractors have done this year as well as a continued demand for native timber in Victoria.
VicForests overall financial result after tax was a loss of $3.2 million, representing a decrease in the accounting valuation of the area of State forest available to be harvested for timber. This is the outcome of more forest being placed in reserves and not a reduction in demand for timber.
VicForests has continued to strengthen its cash position and as a result of sales during the 2016/17 financial year we currently have no debt.
Our safety results are consistent with previous years, although unfortunately we recorded two Lost Time Injuries for staff, and four for contractors. While one injury is one too many, our focus on ‘Zero Harm’ remains as strong as ever.
All incidents and accidents that occur are taken very seriously, the more serious incidents are investigated thoroughly to understand the root cause and identify ways to prevent re-occurrence.
This financial year saw the successful implementation of an agreement to supply mixed species sawlog to Auswest Timbers in East Gippsland. This agreement lays the platform for investment in mill infrastructure, as well as increasing industry confidence and jobs in that part of the State.
As many of you know, the ownership of the Heyfield mill has also been in the news a significant amount during 2017. This mill is a major employer in Heyfield and the wider area, and markets high-value, high quality and beautiful timber products. VicForests is pleased that its ownership is now resolved, and welcomes the greater level of certainty this will create for employees, contractors and the timber industry in Victoria.
Despite the loss that was reported in this years’ financial result, demand for timber remains high in Victoria and Australia. The most recent report by Australian Forest and Wood Products Statistics indicates that Australia is importing more than $5 billion in wood products annually to meet the demand we are unable to supply locally.
The native timber industry contributes hundreds of millions of dollars and thousands of jobs to regional Victoria regional each year. A study released by Deloitte Access Economics last year reported that the native timber industry in Victoria generated $573 million in economic activity during 2013/14 in the Central Highlands region alone.
Beyond the impressive revenue number, native forestry supports the Victorian community by underpinning entire industries and many regional areas. The report found that native forestry in this region creates full-time employment for more than 2,100 people.
Given the continued demand and positive developments in the sector I am optimistic about the coming year.
VicForests staff are hard at work in revising our forest management practices to adapt to the currently available resources. We intend to focus on our long-term financial sustainability while continuing to contribute to the growing demand for timber products in Victoria.
VicForests results are audited each year by the Victorian Auditor General’s Office.
VicForests 2017 Annual report is available to view at www.vicforests.com.au/about-vicforests/corporate-reporting-1/corporate-reports.