OREANDA-NEWS. December 05, 2013. In the first nine months of 2013 Youbisheng Green Paper AG showed a slight decline in revenues but improved profit margins. In total, the revenues of Youbisheng decreased slightly year-on-year by 3% from Euro 74 million to Euro 71.8 million, as the company said in the press release received by Lesprom Network. 

In RMB terms the sales decline was 3.3%. In the course of the reporting period, the operating income (EBIT) remained relatively stable at Euro 18.1 million (9M 2012: Euro 18.3 million) bringing EBIT margin up 0.5 percentage points to 25.2%. The Group’s net profit in the first nine months was also fairly stable at Euro 13.6 million compared to last year’s Euro 13.8 million. Correspondingly, the net profit margin increased from 18.6% to 18.9%.

The development of the Group’s revenues is a result of the limited production capacity but especially of the decline in average selling prices, caused by lower prices for recycled paper, the main raw material for Youbisheng’s products. However, these lower prices were only partly passed on to the customers. As a result of this and in connection with strict cost control as well as enhanced efforts to sell higher margin products, the company managed to improve its profit margins against the market trend.

In the first nine months of 2013, Youbisheng recorded rising gross profit margins in all product segments. Additionally, a look at the segment split shows that the company managed to grow the share of higher-margin products, offsetting the negative impact of the price reductions. While revenues in those segments increased steadily in the reporting period, revenues of lower-margin products slightly declined. The sales of own-produced single-sided testliner decreased by 10.9% from Euro 34.5 million in 2012 to Euro 31.1 million in in the first nine months of 2013. This was mainly due to a limited capacity for the production and partly due to declining average selling prices.

However, the average gross profit margin increased from 28.2% to 29.1% year-on-year. Sales of sub-contracted testliner also fell by 2.7% from Euro 22.8 million to Euro 22.2 million, while the average gross profit margin still increased from 21% to 21.6% in the reporting period. The decline in sales value was due to a lower average selling price, despite a slight increase in sales volume.

Contrary to this, sales of double-sided testliner increased by 8.6% from Euro 15.2 million in previous year’s reporting period to Euro 16.5 million in 2013. Simultaneously, the average gross profit margin for this product segment improved from 32.6% to 33.5%. A similar development was recorded for the sales of anti-counterfeit testliners. While the average selling price decreased, sales increased by 33.3% from Euro 1.5 million to Euro 2 million year-on-year. The average gross profit margin in the first nine months 2012 was 35.6% and rose to 36.1% in the corresponding reporting period 2013.

Youbisheng Green Paper is one of the leading manufacturers for high quality and environmentally friendly linerboard in the combined Fujian and Guangdong region.