Summary of further activities

Our investment volume in Brazil amounted to approximately EUR 1.8 million. About EUR 0.3 million of this amount was spent on road construction, EUR 1.1 million on vehicles, and EUR 0.4 million on machinery and buildings.

The currency fluctuation of the real against the euro was very high. On average, the euro traded 17 % lower than in the previous year. This reduced income in reals from export sales, and it increased costs in reals in the consolidated financial statements, which are reported in euros. At the beginning of 2023, exchange rates recovered somewhat, but we cannot forecast how the currency will develop. The import costs of materials therefore increased disproportionately. Salaries are based on the official inflation index and increased by approximately 6 %.

Legal rules and our commitment to the sustainable use of tropical forests require our company in Brazil to harvest many different species of timber. This continues to be a great challenge and also entails greater complexity for our operational activity. Our ongoing task is to establish and promote lesser-known and lesser-used timber species on the export markets, to examine their areas of application and to increase their familiarity. On the local Brazilian market, prices remain very low, and transport costs to the populated areas in the south of the country are high. There is also a lack of awareness in regard to legally produced timber, and we are competing in the domestic market with illegally logged timber and therefore cheaper sawn timber. As a consequence, our competitiveness on the local sales market remains limited, but it improved thanks to actions taken against the illegal timber trade. We regularly gain new customers for use of lesser-known wood species in Europe, the United States, and Asia. Increasingly, we are successful in educating customers, persuading them to buy these timber species, entering into promising partnerships, and opening up markets for products with specific applications or in connection with the special features of the wood species.

In the reporting year, there was no new information concerning the pending threat of two major fines dating back to 2002 and 2007. The threatened fine by the Brazilian environmental protection agency IBAMA and a threatened property tax fine continue to be legal cases that our lawyers are working on, and we expect that the matter can be resolved within the scope of provisions already set aside.