OREANDA-NEWS. March 29, 2012. China Shengda Packaging Group Inc announced its financial results for the three months and full year ended December 31, 2011.

"Revenues of USD 124 million and net income of USD 9.6 million were within our guidance ranges. However our markets and our financial performance are currently volatile due to cross-currents of variability affecting the global consumer who buys the final products from our manufacturing customers. We are concentrating on broadening our customer base and vertically integrating into paper manufacture in order to grow our business and at the same time reduce fluctuations in revenues and margins," said Daliang Teng, CEO of China Shengda Packaging.

Revenues decreased USD 7.4 million, or 19.4%, to USD 30.8 million for the three months ended December, 31, 2011, from USD 38.2 million during the same period of 2010. The decrease was primarily a result of lower sales volume. The sales volume decreased 18.9 million square meters, or 19.0%, to 80.4 million square meters for the three months ended December 31, 2011, from 99.3 million square meters during the same period of 2010.

The decreased sales volume was mainly the result of two factors: less customer demand from the chemical industry due to challenges resulting from more restrictive financial policies by the People's Bank of China; and significantly less demand from domestic furniture makers whose US and European customers bought less furniture.

4Q gross profit declined 40.3% to USD 6.4 million from USD 10.8 million in the same period of 2010. Gross profit from flexo cartons declined 40.2% to USD 4.6 million from USD 7.7million in the same period of 2010. Gross profit from color cartons declined 40.7% to USD 1.8 million from USD 3.1 million in the same period of 2010. Gross margin declined to 20.8% from 28.1% in the same period of 2010. The decrease in gross margin was primarily due to an increase in the cost of raw materials compared to the same period a year ago.

Income tax expense was USD 0.3 million for the three months ending December 31, 2011, compared to a credit of USD 0.4 million for the same period of 2010.

Net income attributable to common stockholders decreased to USD 1.6 million, or USD 0.05 per diluted share, from USD 5.3 million, or USD 0.16 per diluted share, in the same period of 2010.

Revenue for the full year of 2011 was USD 124 million, a decrease of USD 6.1 million or 4.7% from revenue of USD 130.1 million for the full year of 2010, mainly due to a decrease in sales volume, partially offset by the increase in average per square meter prices. The sales volume decreased 23.2 million square meters, or 6.7%, to 321.7 million square meters from 344.9 million square meters during the same period of 2010.

Gross profit decreased by USD 10.8 million, or 29.7%, to USD 25.7 million for the year ended December 31, 2011, from USD 36.5 million for the year ended December 31, 2010. Gross profit as a percentage of revenues was 20.7% for the year ended December 31, 2011, as compared to 28.1% for the year ended December 31, 2010, mainly due to increased cost of goods sold.

Net income attributable to the Company's common stockholders decreased by USD 9.7 million, or 50.1%, to USD 9.6 million or USD 0.25 per diluted share for the year ended December 31, 2011, from USD 19.3 million or USD 0.63 per diluted share for the year ended December 31, 2010.

China Shengda Packaging Group Inc. is a leading paper packaging company in China. It is principally engaged in the design, manufacturing and sale of flexo-printed and color-printed corrugated paper cartons in a variety of sizes and strengths. It also manufactures corrugated paperboards, which are used for the production of its flexo-printed and color-printed cartons.