Operating Profit in Non-Industrial Forestry in Finland: Analysis of Income, Expenses and Efficiency 2016-2023
Purpose: The study aimed to analyze the structure of income, expenses, and financial efficiency of the private non-industrial forestry sector in Finland from 2016 to 2023. The main focus was on understanding how specific categories of expenses, such as forest regeneration and young stand management, affect the sector's operational performance, particularly in the context of reduced state subsidies. Design/Methodology/Approach: The study employed a quantitative approach and utilized several methods. Secondary data analysis was conducted using data from the Finnish Statistical Office, which enabled the examination of the dynamics of income, subsidies, and expenses in relation to the sector's financial performance. Structural and comparative analysis was also performed to identify dominant cost categories and their changes over time, comparing results across different years and regions. Additionally, correlation analysis was used to investigate the relationship between expense categories and operating profit, employing Pearson's correlation coefficient. Findings: The study revealed significant differences in financial performance across regions. The highest operating profits were achieved in 2022, when the sector's efficiency exceeded 800%, coinciding with a reduction in state subsidies. The lowest results were recorded in 2020, which was associated with higher subsidies and a challenging timber market situation caused by the COVID-19 pandemic. Correlation analysis indicated that costs related to forest improvement and subsidies showed a strong negative correlation with operating profits, suggesting that they did not yield the expected financial benefits. In contrast, administrative costs had a positive impact on financial results, highlighting the importance of effective management. The increase in administrative costs was correlated with higher operating profits, underscoring the significance of efficient management in improving the sector's profitability. Practical Implications: The results of the study provide insights into optimizing expenditures and modifying subsidy policies. The development of modern technologies is crucial, as they can enhance management efficiency and improve the sector's resilience to changing market and climatic conditions. Originality/Value: The study combines economic and ecological approaches to forest resource management, highlighting their impact on the sector's financial performance. It contributes to the development of forest economics, emphasizing the importance of sustainable management amid decreasing state support.