Chung Hwa Pulp Co (中華紙漿) yesterday reported that net profit for the first half of this year jumped 60.6 percent to NT$296.8 million (US$9.77 million), compared with NT$184.8 million in the same period last year, with earnings per share climbing from NT$0.17 to NT$0.27, due to rising pulp prices and better cost controls.
“Staple fiber prices hit US$630 per tonne this month, compared with US$480 in the same period last year,” Chung Hwa Pulp vice president Ray Chen (陳瑞和) told reporters after an investors’ conference in Taipei.
In the first six months of the year, cumulative revenue totaled NT$10.87 billion, a 0.3 percent increase from NT$10.85 billion a year earlier, the company said in a statement.
The specialty paper sector — which had a gross margin of more than 15 percent — contributed nearly 40 percent of the firm’s revenue in the first half, while the cultural and art-use paper segment remained the company’s largest revenue source at 50 percent, company data showed.
Gross margin in the period grew from 8.4 percent to 10.2 percent, aided by the company’s ongoing efforts to improve production efficiency, which helped reduce total production costs by 5 percent in the first half, the company said.
Profitability also benefited from a foreign exchange gain of NT$28.4 million due to the appreciation of the yuan against the greenback, the company said.
Chen provided an optimistic outlook for the rest of the year, citing global pulp prices, which are expected to remain at relatively high levels, and the resumption of operations at the firm’s two major plants after regular maintenance in the fourth quarter of last year.
International prices of staple fibers are forecast to reach more than US$630 per tonne in the second half, Chen told the Taipei Times, attributing the upward trend in prices to supply problems in Brazil and Chile.
Chung Hwa Pulp shares yesterday gained 1.41 percent to close at NT$10.05 in Taipei trading, while the benchmark TAIEX edged down 0.2 percent to 10,290.39 points.
The company’s stock has risen more than 8 percent since the beginning of the year, Taiwan Stock Exchange data showed.
Chung Hwa Pulp’s parent company, YFY Inc (永豐餘控股), yesterday posted net income of NT$454.4 million for the first half, with earnings per share of NT$0.27.
That represented a significant improvement from a net loss of NT$235.3 million a year earlier, or net losses per share of NT$0.14, data showed.
Aggregate first-half revenue rose 1.6 percent year-on-year to NT$31.3 billion, mainly because of improving customer demand, YFY said.
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