Financial performance

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

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)
Financial targets      
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
       
Financial outcomes      
Timber revenues 127.2 113.4 (13.8)
Operating profit 9.5 10.4 0.9
Net profit / (loss) after tax (4.1) 4.0 68.1
Closing cash balance 15.7 31.3 15.6
Dividends paid 0.5 2.5 2.0
  Target 2016-17 (%) Actual 2016-17 (%) Variance (%)
Performance measures      
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%