Orient Paper, Inc. Announces First Quarter 2018 Financial Results

Mr. Zhenyong Liu, Chairman and Chief Executive Officer of Orient Paper, commented, “Our disappointing first quarter results reflected the impact of a temporary suspension of production due to government-mandated restrictions on the supply of natural gas that lasted for most of the first quarter. However, production at our manufacturing facilities has been back to normal since mid-March and we anticipate a strong rebound in our business in the second quarter.”

For the first quarter of 2018, total revenue decreased by $23.4 million, or 92.5%, to $1.9 million from $25.3 million for the same period of the prior year. The decrease in total revenue was mainly due to decreases in sales volume across all product categories and partially offset by an increase in blended ASP. In late January, 2018, the Company temporarily suspended its production due to government-mandated restrictions on the natural gas supply. The company resumed production on March 14, 2018. As a result, both the production and sales volume decreased significantly in the first quarter of 2018.

Total cost of sales decreased by $17.1 million, or 86.8%, to $2.6 million for the first quarter of 2018, from $19.6 million for the same period of the prior year. Cost of sales per tonne was $782 for the first quarter of 2018, compared to $338 for the same period of the prior year. The increase in overall cost of sales per tonne was mainly due to increased unit cost of manufacturing overhead due to the production suspension in the first quarter of 2018, as well as higher average unit purchase costs of recycled paper board and recycled scrap binding. Costs of sales per tonne for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were, $653, $831, $1,194, and $nil, respectively, for the first quarter of 2018, compared to $316, $337, $458, and $1,161, respectively, for the same period of the prior year.

Gross loss was $0.7 million for the first quarter of 2018, compared to gross profit of $5.7 million for the same period of the prior year. Overall gross loss margin was 36.8% for the first quarter of 2018, compared to gross profit margin of 22.4% for the same period of the prior year. The decrease in gross profit and gross margin were mainly due to the decrease in sales volume and increase in unit cost of recycled paper board and recycled scrap binding and partially offset by the increase in ASP as discussed above. Gross loss margins for regular CMP, light-weight CMP, offset printing paper, and tissue paper products were 20.2%, 59.5%, 37.7%, and nil, respectively, for the first quarter of 2018, compared to gross profit margin of 22.3%, 23.3%, 25.5%, and 7.9%, respectively, for the same period of the prior year.
more detail at: https://www.prnewswire.com/news-releases/orient-paper-inc-announces-first-quarter-2018-financial-results-300647198.html

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