Financial performance

The FPC continues to provide a significant contribution to the economies of the State and many communities throughout the south-west of Western Australia.

This financial year, an operating profit result of $0.03 million has been achieved after taking into account an additional amortisation expense of $2.2 million.

This result is contributed to by all forest business segments returning a profit before amortisation of licences and right of use assets.

The profit earned by the FPC has enabled the investment of $11.6 million in building the State’s softwood estate, native forest and sandalwood resource regeneration programs.

During 2018–2019, a dividend of $1.04 million was paid to the State Government for the 2017–2018 year.

Pricing arrangements

Pricing arrangements are determined by a variety of factors including requirements under the Forest Products Act 2000.

Section 59 of the Act prescribes the costs that are to be factored into a price for forest products. Contracts include indexation or an alternative escalation mechanism to minimise financial risk to the FPC.

The following table details a summary of our corporate performance against the financial outcomes and targets detailed in the Statement of Corporate Intent.

  Target 2018-19 ($ millions) Actual 2018-19 ($ millions) Variance ($ millions)
Financial targets      
Total expenses (sourced from Statement of Comprehensive Income) 130.7 126.3 4.4
Total income (sourced from Statement of Comprehensive Income) 135.9 126.3 (9.6)
Total equity (sourced from Statement of Financial Position) 365.2 264.6 (100.6)
Net increase / (decrease) in cash held (sourced from Statement of Cash Flows) (7.1) 0.9 8.0
       
Financial outcomes      
Timber revenues 134.3 115.9 (18.4)
Operating profit 5.2 0.0* (5.2)
Net profit / (loss) after tax (9.4) 1.4 10.8
Closing cash balance 23.5 31.4 7.9
Dividends paid - 1.0 1.0
  Target 2018-19 (%) Actual 2018-19 (%) Variance (%)
Performance measures      
Return on assets 1.4% 0.0% -1.4%
Return on equity 1.4% 0.0% -1.4%
Operating profit to timber revenues 3.9% 0.0% -3.9%

*Due to a change in Accounting Policy, the FPC achieved an operating profit result of $0.03 million after taking into account an additional amortisation expense of $2.2 million as per note 5.2.1.