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Shandong Chenming Paper Holdings Ltd, the largest paper producers in China, reported first-half revenue fell 2.89% on year to 16.68 billion yuan. Net profit attributable to shareholders tumbled 88.61% on year to 230 million yuan. Earnings per share was 0.064 yuan.
Due to the impacts of the pandemic, geopolitical tensions and global inflation, commodity prices and logistics prices in the global market surged in the first half of the year, driving up paper producers’ operating cost, the company said.
As domestic demand was sluggish, it’s difficult to transmit the rising costs to the downstream market and paper products’ prices were lower than the same period in previous years, squeezing its profits, it said.
According to data from the National Bureau of Statistics, China’s paper and paper product makers generated a profit of 25.99 billion yuan in the first half of the year, sliding 46.2% from a year earlier.
Chilean pulp and wood panel manufacturer Arauco and other pulp giant have announced plans to expand production capacity and to put new capacity into operation, which are expected to ease the tight pulp supply, and meanwhile, global raw material prices will likely decline amid tightening monetary policy across major economies and easing inflation, said Chenming.
In addition, as China’s epidemic situation improves and China’s pro-growth policies kick in, China’s domestic demand is expected to pick up and the paper-making sector’s performance will likely recover, it said.