China-based paper manufacturer IT Tech Packaging has reported a decrease in revenue of almost 5.6% to $30.02m in the second quarter (Q2) of 2023, compared with $31.79m in Q2 2022.

This decline in revenue has been attributed to a decrease in the average selling prices of corrugating medium paper (CMP), partly offset by a rise in the sales volume of both CMP and offset printing paper.

The company’s CMP business registered total revenues of approximately $26.48m, comprising $21.93m from its Regular CMP business and $4.54m from its Light-Weight CMP segment.

This segment accounted for nearly 88.2% of IT Tech Packaging’s total revenue for the reported quarter.

IT Tech Packaging’s gross profit rose by 86% to $1.18m from $0.63m in last year’s Q2. Total gross margin was also up by 1.94 percentage points to 3.9% in Q2 2023. 

It posted a net loss of $1.25m in the second quarter of 2023, compared with $0.29m in Q2 last year.

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The company’s basic and diluted loss per share recorded for this quarter, which ended on 30 June 2023, was $0.12, versus $0.03 a year ago.

In Q2 2023, earnings before interest, taxes, depreciation and amortisation was down by approximately 20.3% to $2.83m while the same was $3.55m in Q2 last year.

For the first six months of 2023 (H1), revenues grew almost 5.4% to $49.81m. The company’s net loss was $3.99m, an increase of 43.6% from the same period a year ago.

IT Tech Packaging’s CEO and chair Zhenyong Liu said: “For the six months ended June 30, 2023, because of the weak domestic market demand of paper products, the price of paper products kept falling and the average selling price of our products was significantly lower than the same period of last year.

“Although the company continues to optimise cost, raw material inventory of H1 of 2023 was still high due to the impact of the procurement cycle, resulting in a decrease in net profit of the current period.

“In the future, the company anticipates continuing to improving profit efficiency by adjusting utilisation rate of assets, developing new market channels and other ways [to grow]. It is expected that profitability of the company will be effectively recovered in H2 of the year.”