Papermaker Long Chen Paper Co (榮成紙業) yesterday reported that pre-tax earnings in the first half of this year skyrocketed 130.73 percent to NT$2.67 billion (US$87.2 million) from a year ago, aided by soaring paper prices in China and a better product portfolio.
Earnings per share were NT$2.11 in the first half, compared with NT$0.67 a year earlier, the company said in a filing with the Taiwan Stock Exchange.
Sales in the first six months of the year surged 24 percent annually to NT$19.19 billion, while operating income jumped 84.2 percent to NT$2.43 billion, the filing showed.
The sales prices of industrial paper products in China rose about 40 percent annually to a five-year high of 3,300 yuan (US$485.1) per tonne in the first half, Long Chen vice president Tsou Yung-fang (鄒永芳) said by telephone yesterday.
Tsou said the upward trend in paper prices in China is likely to continue, with prices remaining at relatively high levels in the near term.
“The company should continue to benefit from the trend,” Tsou said. “We have no reason to be pessimistic, as the demand for industrial paper in the second half is usually much higher than the first half.”
Long Chen, which has a solid position in eastern China’s papermaking industry, said it expects its new industrial paper plant in Hubei Province to drive sales growth over the next five years.
The new facility, which began trial production earlier this month, is to start mass production in October, with an annual capacity of 850,000 tonnes, Tsou said.
The Hubei plant is expected to raise the company’s overall annual industrial paper capacity from 2.45 million tonnes last year to 3.3 million tonnes by the end of this year, it said.
In 2019, the plant is to be able to produce 1.5 million tonnes per year, boosting the company’s overall annual capacity by 4 million tonnes, Long Chen said.
The company last year obtained a seven-year 1.99 billion yuan syndicated loan led by First Commercial Bank (第一銀行) to finance the Hubei plant’s expansion.
Shares of Long Chen gained 2.04 percent to close at NT$35 in Taipei trading yesterday after the earnings announcement, outperforming the benchmark TAIEX, which dropped 0.68 percent to 10,297.25 points.
The company has seen its stock more than double from nearly NT$17 at the beginning of this year, Taiwan Stock Exchange data showed.
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