Abstract
Given the changing market conditions and uncertainty arising from climate change, forest management tends to focus on the financial functioning of forest holdings. The objective of this work is to study the financial performance of forest districts using ratio analysis, synthetic financial indicators, as well as the relationship between synthetic indicators and forest district categories defined in terms of forest site type, site fertility, compatibility stand species composition, species composition, harvesting system, harvesting intensity, fragmentation of forest complexes and management difficulty level. The study material consists of financial documentation from 82 forest districts of the State Forests National Forest Holding (SFNFH) in eastern Poland from the years 2015–2019 and 2005–2009 (for comparison purposes). Synthetic indicators were calculated using two sets of financial ratios as well as two variants of accounting data. In the study period, forest districts were found to differ in terms of their financial performance, which was affected by the natural and economic factors. The synthetic indicators were significantly higher (p > 0.05) for forest districts operating on low-fertility lowland sites, those managing stands with dominant pine, and those implementing a clearcutting regeneration system. The findings concerning the effects of selected natural and economic factors on the financial condition of forest districts may be used for financial planning and management by SFNFH, in particular in decision-making processes to optimize forest management. The applied methods may stand as a basis for the construction of a sectoral evaluation tool.
Highlights
The increasingly unpredictable crises in the timber market and the growing risks associated with pursuing sustainable forestry practices in the face of climate warming and weather anomalies have forced forest management units (FMUs) to focus on the economic aspects and financial performance of forest holdings [1,2,3,4,5]
The first category revealed a dominance of lowland coniferous forest sites (FCF—33.19% and fresh mixed coniferous forest (FMCF)— 26.68%), the second one was characterized by lowland sites (FMCF—34.96% and fresh mixed broadleaved forest (FMBF)— 23.17%), the third one predominantly featured lowland broadleaved sites, the fourth one mostly consisted of upland sites (FUBF—72.72%), and the fifth one predominantly contained fresh montane broadleaved forest sites (FMontBF—88.87%) (Table A1)
The study corroborated the hypothesis that studied natural and economic factors affect the financial performance of forest districts, except for compatibility between stand species composition and forest site type (FST), management difficulty, and the fragmentation of forest complexes
Summary
The increasingly unpredictable crises in the timber market and the growing risks associated with pursuing sustainable forestry practices in the face of climate warming and weather anomalies have forced forest management units (FMUs) to focus on the economic aspects and financial performance of forest holdings [1,2,3,4,5]. Other significant factors include the organizational system and level of development of forest districts and forest service companies as well as the technologies used by them [19] These determinants impact the financial management of forest holdings, which differs considerably from that of other economic entities, such as public sector organizations and state-owned enterprises and private companies. Non-production forest functions, critical to modern societies and provided free of charge in Poland, entail a financial burden on forest holdings functioning under different natural conditions, which affects their profitability and ability to deliver those functions
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