Orient Paper's 2Q revenue decreased by 40 per cent

Photo: Orient Paper

For the 2Q 2017, Orient Paper's revenue decreased by $15.2 million, or 40%, to $22.8 million from $38 million for the same period of last year. The decrease in total revenue was mainly due to decreases in sales volume across all product categories and partially offset by moderate increase in blended average selling price.

Gross profit decreased by 49.7% to $3.5 million in 2Q 2017. Gross margin decreased by 2.9 percentage points to 15.2%. The decrease in gross margin was primarily due to increases in unit costs of recycled scrap paper board and recycled white scrap paper and coal.

Net income was $15.9 thousand, or $0.001 per basic and diluted share, for the 2Q 2017, compared to $2.6 million, or $0.12per basic and diluted share, for the same period of last year.

 

EBITDA decreased by $3.6 million, or 45.6%, to $4.4 million for the 2Q 2017, from $8 million for the same period of last year.

 

Zhenyong Liu, Chairman and CEO of Orient Paper, commented, "Our 2Q results were impacted to a large extent by a temporary government mandated restriction on production that has been in place since November 2016. Total sales volume decreased by 42.5% to 55,069 tonnes, the lowest level since the 1Q 2013, leading to a 40% decrease in total revenue in the 2Q. Our margins also deteriorated as a result of increases in unit costs of recycled paper board, recycled white scrap paper, and coal that increased by 34%, 17.5%, and 56.9% year-over-year, respectively."

 

Orient Paper, Inc. is a leading paper manufacturer in North China. Using recycled paper as its primary raw material (with the exception of its digital paper and tissue paper products), Orient Paper produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products.