State forestry company, Coillte, has reported a drop in profits last year, due in the main to increased operating costs.
Operating profit before exceptionals and revaluation gains came in at €116.8m, down from €124.4 a year earlier.
Group turnover was up 13% at €478.8m largely driven by increased end market pricing, the company said.
Operating costs increased by 17% compared to 2021, by €52.7m.
The company's board has recommended a final dividend of €7.7m, bringing the total proposed dividend for the year to €27.7m.
Coillte said the growth in the construction sector meant demand for its products was strong in the first half of last year.
But it moderated significantly in the second half of the year.
"Coillte delivered another strong financial performance in 2022," said Chair of Coillte, Bernie Gray.
"During the first half of the year, pricing, driven by a mix of demand and supply constraints in international wood and timber related product markets, was strong, albeit back from the highs experienced the previous year."
The company said it is expecting a more challenging year this year due to rising costs because of inflationary pressure, as well as higher interest rates.
"When I look to 2023 and our experience so far, there is no doubt that the business is seeing the effects of inflation and rising interest rates," said Chief Executive, Imelda Hurley.
"These headwinds indicate challenging trading conditions and weaker consumer demand in 2023."
Last year saw the company launch a new forestry strategy which aims to position the business to deliver multiple benefits of forestry while responding to the climate crisis.
The plan includes enabling the creation of 100,000 hectares of new forests, half of which will be native woodlands.
