Friday, March 13, 2026
Ukraine’s state forestry sector has reported its strongest financial performance to date. Despite operating during wartime conditions, the industry delivered a significant increase in profitability last year. The results were announced during the annual public report presented by Viktor Smal, head of the State Forest Resources Agency of Ukraine.
According to the report, the state enterprise Forests of Ukraine generated net profits of UAH 6.9 billion, equivalent to approximately US$167 million. The result represents a 2.76-fold increase compared with 2024. The achievement is considered a milestone for the country’s forestry management system.
Industry leaders attribute the growth largely to procurement reforms introduced after 2020. These reforms were designed to improve transparency and reduce financial leakage within the sector.
Revenue generated from timber sales increased significantly during the reporting period. Total sales reached UAH 30.4 billion (around $736 million). This represented a year-on-year increase of UAH 6.7 billion.
The sector also made a substantial contribution to public finances. Tax payments reached UAH 16.1 billion, or approximately $390 million. This was UAH 6.8 billion higher than the previous year.
Profitability within the forestry industry also improved considerably. The sector recorded an overall profitability rate of 22.8 per cent. This figure increased by 12.3 percentage points compared with earlier results.
Employee income has also risen. The average monthly wage in the forestry sector exceeded UAH 30,000, equivalent to roughly $727. Salaries increased by UAH 6,000 year-on-year.
These indicators suggest a broad strengthening of financial performance across the sector.
The dramatic increase in profitability is closely linked to reforms introduced after 2020. Before these measures were implemented, the industry produced much smaller financial returns.
At that time, profits reached only UAH 0.2 billion. This amount is nearly 35 times lower than the most recent annual result.
Despite having greater resources and operating under more stable conditions previously, the industry generated far less value. The reforms introduced stronger oversight and more transparent procurement procedures.
According to Smal, the results demonstrate the effectiveness of these changes. The improved performance has been viewed as clear evidence that the reform programme has delivered measurable results.
Several structural changes were introduced across procurement processes. Greater digitalisation was implemented. Financial reporting standards were also strengthened.
One of the key reforms involved the adoption of the Prozorro electronic procurement system. This digital platform was created to increase transparency in public procurement processes across Ukraine.
According to Yuriy Bolokhovets, director general of Forests of Ukraine, the system has significantly reduced financial losses within the industry.
Approximately 97 per cent of procurement activity is now conducted through the Prozorro platform. The move has increased accountability and improved oversight of financial transactions.
The system alone generated more than UAH 700 million in savings for the forestry sector.
Bolokhovets stated that in earlier years significant revenue was lost due to inefficient procurement systems. Today, financial flows are increasingly directed toward state development and industry improvement.
The reform process has therefore strengthened the sector’s economic foundations.
Higher profitability has enabled the forestry sector to increase its contributions to public services and national priorities.
Record tax payments are now being transferred to the state budget. Additional funds are also being allocated to environmental protection programmes.
Forest fire prevention and response capabilities have been strengthened. Resources have also been directed towards technical modernisation across forestry operations.
The industry is also providing support to the country’s defence efforts. According to sector leadership, financial stability enables the forestry enterprise to assist the armed forces where required.
These measures demonstrate how improved governance within the forestry sector can generate broader national benefits.
The strong financial performance has been achieved during an exceptionally challenging period for the country. Large areas of forest in eastern and northern regions have been affected by the ongoing conflict.
Access to some forestry resources has therefore been restricted. Certain harvesting operations have been disrupted.
Despite these difficulties, the industry has continued to operate and expand its economic output. Improved management systems have helped maintain operational stability.
Ukraine’s timber supply remains important for both domestic industries and export markets.
The performance of the Ukrainian forestry sector is being closely monitored by international markets. European timber buyers are particularly attentive to developments in supply flows.
The war has created uncertainty regarding timber availability from some regions of the country. Logistics routes have also been affected in certain areas.
Nevertheless, Ukraine remains an important supplier of timber products to European markets.
The strong financial results from the forestry sector demonstrate that institutional reforms can deliver measurable economic outcomes even during periods of national crisis.
For the global timber industry, the developments highlight the importance of governance, transparency, and digital procurement systems in strengthening resource-based sectors.
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Tags: Forestry, Forests of Ukraine profit, Ukraine forestry industry, Ukraine timber market, woodworking industry
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