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 $10.4 million has been achieved.
This has been achieved primarily as a result of native forest and plantation segments significantly exceeding their profit targets. The profit earned by the FPC has enabled the investment of $6.8 million in building the State’s softwood estate, native forest and sandalwood resource regeneration programs. During 2016–2017, a dividend of $2.5 million was paid to the State Government for the 2015–2016 year.
Pricing arrangements are determined by a variety of factors including requirements under the Forest Products Act 2000. Section 59 of the Act prescribes the costs that are to be factored into a price for forest products. Contracts include indexation or an alternative escalation mechanism to minimise financial risk to the FPC.
The following table details a summary of our corporate performance against the financial outcomes and targets detailed in the Statement of Corporate Intent.
|Target 2016-17 ($ millions)||Actual 2016-17 ($ millions)||Variance ($ millions)|
|Total expenses (sourced from Statement of Comprehensive Income)||123.0||106.2||16.8|
|Total income (sourced from Statement of Comprehensive Income)||132.5||118.3||(14.2)|
|Total equity (sourced from Statement of Financial Position)||335.4||364.8||29.4|
|Net increase / (decrease) in cash held (sourced from Statement of Cash Flows)||(8.4)||(8.2)||0.2|
|Net profit / (loss) after tax||(4.1)||4.0||68.1|
|Closing cash balance||15.7||31.3||15.6|
|Target 2016-17 (%)||Actual 2016-17 (%)||Variance (%)|
|Return on assets (operating profit/total assets)||2.2%||3.1%||0.9%|
|Return on equity||2.8%||3.5%||0.7%|
|Operating profit to timber revenues||7.4%||9.2%||1.8%|