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Board of Directors´ Report

Key Events After the Financial Period

The operations of Metsähallitus and the Group ran according to plan in the first part of 2017. At the beginning of February, Terhi Vires, M.Sc. (Econ.) took up the position of Director of Human Resources at Metsähallitus. She is a member of the Management Group.

Outlook and goals set by the owner for 2017

The national economic outlook influences the operations of Metsähallitus Group in various ways.

The owner has set targets for Metsähallitus’ business-based services and operations, and its profit and dividend payment, for 2017 on the basis of the new ownership policy guidelines. The targets are based on the profitability of the business and its general social benefits.

The profit target set for the Business Operations Group is EUR 100.7 million, corresponding to a 4.0 per cent of return on invested basic equity. The preliminary target for the payment of dividend from the operating profit of the enterprise’s business in 2017 is EUR 94.9 million.

Financial performance is largely dependent on the development of timber demand and prices. Metsähallitus' other key business area, the property business, faces a challenging outlook on the demand side, and land-use planning and other permit processes may delay projects.

The targets set for public administrative duties are based on performance agreements concluded with the steering ministries. The performance agreements mainly focus on the same themes as in 2016. The Hossa National Park will be opened in June, in honour of the 100th anniversary of Finland’s independence.

Board of directors´ proposal for the distribution of retained earnings

Metsähallitus enterprise’s retained earnings total EUR 88,091,436.53, of which the profit for the financial period is EUR 50,089,516.01.

The enterprise’s retained earnings total EUR 89,001,932.00, of which the profit for the financial period is EUR 51,000,011.48.

The retained earnings of the enterprise’s public administrative duties were negative by EUR 910,495.47, which was entirely due to the loss for the financial period.

The Board of Directors proposes that the loss recorded for the public administrative duties, EUR 910,495.47 be entered as a reduction in the other equity related to the enterprise’s public administrative duties, and, in accordance with the preliminary profit target set by the Ministry, EUR 86,000,000.00 be paid as a dividend on the operating profit, and the remaining EUR 3,001,932.00 be entered under retained earnings for the business.

The Board of Directors proposes that the dividend be paid in accordance with the plan approved by the Ministry, which is based on the cash flow from Metsähallitus’ operations.