Dear colleagues!
The State Audit Office of the Republic of Latvia is currently conducting an audit in the forestry sector, examining how supervision of the state joint-stock company “Latvijas valsts meži”, which manages and operates Latvia’s state forest properties, is ensured.
According to publicly available information State Forest Management Centre (Riigimetsa Majandamise Keskus (RMK)) manages Estonia’s state-owned forests and other state natural areas.
In order to gain a broader picture of the situation in other Baltic States, we would like to ask you to provide information on issues related to the sale of wood products and payments for the use of state capital (dividends) by the company that manages Estonia’s state forests.
Sale of round timber
According to publicly available information1 State Forest Management Centre (Riigimetsa Majandamise Keskus (RMK)):
• up to 85% of State Forest Management Centre’s annual roundwood volume is sold to processors on the basis of long-term contracts, while the rest is sold by other means;
• for roundwood sales, negotiations are held once a year for the purpose of entry into long-term contracts, while other sales methods are used according to the market situation and sales needs;
• in the case of sales of roundwood at the agreed price, long-term contracts are generally entered into for a period of 5 years. Agreement on the exact volumes and price of the timber to be purchased are held each year for each delivery period separately.
1. Please provide a more detailed explanation of the above information regarding the principles of determining the prices of round timber – spruce and pine sawlogs applied by the State Forest Management Centre in long-term contracts.
1.1. According to what principles/criteria is the price of spruce and pine sawlogs determined in long-term contracts (for example, as a result of auctions, evaluation of the price offered by buyers, average market price, etc.)?
1.2. Do we understand correctly that the contract price is reviewed annually through negotiations? If so, please indicate the basic principles on the basis of which the said price is updated, including for the period from 2022 to 2024.
2. We have familiarized ourselves with the publicly available timber prices on the website of the State Forest Management Centre (average roadside prices in state forest, EUR/m3 excluding VAT). We need more detailed data on spruce and pine sawlog prices for the audit.
Please provide information on the average prices of spruce and pine sawlogs applied in the State Forest Management Centre's long-term contracts for 2021–2024, broken down by quarter, for the following product/assortment groups:
2.1. spruce sawlogs (18–28 cm in diameter);
2.2. pine sawlogs (18–28 cm in diameter);
2.3. if spruce and pine sawlogs in the above-mentioned diameter are not offered, please provide information on the prices of spruce and pine sawlogs in the product/assortment groups offered by the State Forest Management Centre, e.g. 18+cm, etc.
Please provide information on the prices of spruce and pine sawlogs in the table below.
Product/ Type*
2021
(average price/EUR/m3)
2022
(average price/EUR/m3)
2023
(average price/EUR/m3)
2024
(average price/EUR/m3)
1st quarter
2nd quarter
3rd quarter
4th quarter
1st quarter
2nd quarter
3rd quarter
4th quarter
1st quarter
2nd quarter
3rd quarter
4th quarter
1st quarter
2nd quarter
3rd quarter
4th quarter
Spruce sawlogs 18-28 cm
Pine sawlogs 18-28 cm
* If spruce and pine sawlog products/assortment in this diameter are not offered, please provide information broken down by product/assortment types offered by the State Forest Management Centre.
2.4. Please indicate based upon which calculation principle has the average price been determined (simple arithmetic average, weighted average price, etc.)?
2.5. Please indicate whether the above price of spruce and pine sawlogs also includes transportation costs for delivery to the buyer?
Payments for the use of state capital (dividends)
3. According to the publicly available information, the state as the owner expects that the State Forest Management Centre pays a stable owner income and a regular dividend rate of 75 %2 (from net profit).
The planned owner income for the period 2025–2028, including income tax and tax changes, is 50.6 million euros per year, due to the government's decision to increase the dividend by 5%3.
3.1. What types of payments does the State Forest Management Centre make to the state budget, for example, dividends, payments for the use of state capital, non-standard tax, concession payments for the use of state assets, etc.?
3.2. What is the planned and actual amount of these payments in the period from the years 2022 to 2025?
Please provide information on contributions to the state budget in the table below (please select the appropriate payment types; please indicate contributions for the results of the relevant financial year, regardless of the year of disbursement).
2022
2023
2024
2025
Payment type
Planned amount
Actual amount
Actual net profit, EUR
Planned amount
Actual amount
Actual net profit, EUR
Planned amount
Actual amount
Actual net profit, EUR
Planned amount
Dividends (e.g., % from the sum of net profit EUR etc.)
75 040 0004
Net profit: 138 352 000
Revaluation of biological assets + 1 258 283 000
Final result for the reporting year with revaluation of biological assets 1 396 635 000
119 600 0005
Net profit: 119 646 000
Revaluation of biological assets +258 962 000
Final result for the reporting year with revaluation of biological assets 378 608 0006
35 482 0007
Net profit: 57 426 000
Revaluation of biological assets ‑465 677 000
Final result for the reporting year with revaluation of biological assets ‑408 251 0008
75 % from net profit*
Payment for using state capital, EUR
x
Non-standard tax, EUR
x
Concession payments for use of state assets, EUR
x
Other type (please specify), EUR
x
* We have already indicated publicly available information in the table. Please clarify, if necessary.
3.3. Please indicate the principles/criteria used to determine the above-mentioned payments by the State Forest Management Centre into the state budget, including in which cases changes are made to the amount of these payments within the year?
We would highly appreciate if it would be possible to provide this information by 29 January 2026.
If there is any need for additional information or clarification, please do not hesitate to contact Mr. Jānis Salenieks, Senior state auditor of the Environmental sector, Fifth Audit Department of SAI Latvia (email:
[email protected] or telephone number: +371-23282380).