The FPC continues to operate profitably and 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 $6.6 million has been achieved.
This result is contributed to by all forest business segments returning a profit.
The profit earned by the FPC has enabled the investment of $7.2 million in building the State’s softwood estate, native forest and sandalwood resource regeneration programs.
During 2017–2018, a dividend of $3.6 million was paid to the State Government for the 2016–2017 year.
Pricing arrangements
Pricing arrangements are determined by a variety of factors including requirements under the Forest Products Act 2000.
Section 59 of the Act prescribes the costs that are to be factored into a price for forest products. Contracts include indexation or an alternative escalation mechanism to minimise financial risk to the FPC.
The following table details a summary of our corporate performance against the financial outcomes and targets detailed in the Statement of Corporate Intent.
| Target 2017-18 ($ millions) | Actual 2017-18 ($ millions) | Variance ($ millions) | |
|---|---|---|---|
| Financial targets | |||
| Total expenses (sourced from Statement of Comprehensive Income) | 131.4 | 107.5 | 23.9 |
| Total income (sourced from Statement of Comprehensive Income) | 134.3 | 119.7 | (14.6) |
| Total equity (sourced from Statement of Financial Position) | 362.4 | 370.3 | 7.9 |
| Net increase / (decrease) in cash held (sourced from Statement of Cash Flows) | (7.0) | (0.8) | 6.2 |
| Financial outcomes | |||
| Timber revenues | 132.9 | 111.6 | (21.3) |
| Operating profit | 2.9 | 6.6 | 3.7 |
| Net profit / (loss) after tax | (3.5) | 8.0 | 11.5 |
| Closing cash balance | 23.5 | 30.6 | 7.1 |
| Dividends paid | 1.9 | 3.6 | 1.7 |
| Target 2017-18 (%) | Actual 2017-18 (%) | Variance (%) | |
|---|---|---|---|
| Performance measures | |||
| Return on assets (operating profit/total assets) | 0.7% | 3.1% | 2.4% |
| Return on equity | 0.8% | 3.5% | 2.7% |
| Operating profit to timber revenues | 2.2% | 5.9% | 3.7% |