YFY Inc (永豐餘控股), which primarily makes industrial-grade paper, expects revenue to decline this year as sluggish demand from China is to offset growth from Southeast Asia due to lower paper prices, company executives said yesterday.
The company expects output of containerboard and packaging paper from its Vietnam plants to increase after a new factory in the nation’s north became operational last quarter, they said.
Revenue from containerboard and packaging paper last quarter climbed 7.3 percent year-on-year, accounting for 43 percent of total sales of NT$18.96 billion (US$604.48 million), company data showed.
Pulp and fine paper sales dipped 10.5 percent year-on-year, accounting for 23 percent, the data showed.
Tissue sales fell 12 percent annually, contributing 13 percent of sales, the data showed.
“Sales are expected to decline this year due to lower product prices, but margin is to go up as prices for raw materials, including kraft pulp, have fallen even more drastically than paper since the third quarter of last year,” YFY spokesman Yin Kuo-tang (殷國堂) said.
Taiwan is to remain stable, but China will be a challenging market, as a ban on waste imports would boost raw material costs, YFY investor relations official Susan Liao (廖苑珊) told investors.
YFY last quarter generated 61 percent of its revenue overseas, company data showed.
Net income climbed 23.4 percent to NT$539 million, from NT$437 million a year earlier, which the company attributed to growth from its containerboard and packaging paper business and increases in non-operating income.
Earnings per share increased from NT$0.26 to NT$0.33, while gross margin grew from 16.3 percent to 17.8 percent, the data showed.
Chung Hwa Pulp Corp (華紙), 57 percent owned by YFY, reported that net income in the first half of the year plunged 53.8 percent to NT$81.34 million, from NT$176.05 million a year earlier, primarily due to deeper non-operating losses totaling NT$6.96 million.
The company booked a non-operating gain of NT$20.84 million a year earlier.
Earnings per share dropped from NT$0.16 to NT$0.07, company data showed.
Chung Hwa Pulp expects shipments of paper straws to climb from 50 million units this year to 300 million in the following years as more countries restrict the use of plastic straws, spokesman Ray Chen (陳瑞和) said in a statement.
Revenue contracted 10.6 percent year-on-year to NT$10.74 billion in the first half, with paper and paperboard contributing 50 percent of revenue last quarter, company data showed.
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