Nine Dragons points to earnings growth
Hong Kong-based containerboard producer Nine Dragons Paper (Holdings) Ltd. has issued a profit warning in advance of the release of its second-half 2016 calendar year financial results, which represent the first half of the company’s 2017 fiscal year.
“The profit attributable to equity holders of the company for the period is expected to increase not less than 45 percent as compared to the corresponding period [the second half of 2015] due to stable growth of the revenue of the group,” the company says in a statement issued Jan. 23, 2017.
The results for the company’s 2016 fiscal year, which ended June 30, 2016, involved a 20 percent decrease in profits compared with the prior fiscal year, according to a September 2016 news release issued by the company.
At that time, however, Nine Dragons expressed optimism about the near-term market, stating that it had “benefited from measures adopted by the [Chinese] government to close down outdated and less efficient production capacities in the main manufacturing regions.”
Nine Dragons says with these measures, combined with “stricter approval of new production capacities,” China’s containerboard industry “kept getting better.”
Nine Dragons Chair Cheung Yan says, “Along with the continual improvement of packaging paper market conditions in China, the [Nine Dragons] group is gradually harvesting the return from its previous efforts and investments and achieved better results in many aspects this year.”
She adds, “Along with the large decrease of foreign currency borrowings and the increase of RMB [Chinese yuan] borrowings, the impact of foreign currency market fluctuations is expected to be much reduced, bringing improvements to [our] profits. As the leading company of the packaging paper industry, Nine Dragons Paper has firmly secured the advantages along China’s ‘new normal’ reform, moving forward to a new phase of steady development and higher returns in the future.”