China Paper posts 37% drop in Q3 earnings to $2.8m

China Paper Holdings, the vertically-integrated paper and paper chemical products manufacturer in China, says it achieved earnings of RMB14.1 million ($2.8 million) for the three months ended 30 September 2012 (3Q2012), down 37% from a year ago (3Q2011).

The fall in earnings come as revenue slips 7.2% to RMB238.8 million as business conditions remained challenging in China.

The decreases in the revenue and gross profit in the quarter largely resulted from lower average selling prices of the group’s products; the decrease in production volume due to intermittent suspension of production at the group’s paper production facilities located in Cangshan District, Linyi City, Shandong Province; as well as an increase in the average cost of sales, which include fixed costs such as depreciation of production facilities and salaries of most labour.