Orient Paper (ONP) has reported 36.64 percent plunge in profit for the year ended Dec. 31, 2016. The company has earned $7.31 million, or $0.34 a share in the year, compared with $11.54 million, or $0.57 a share for the last year.
Revenue during the year went down marginally by 0.41 percent to $134.74 million from $135.30 million in the previous year. Gross margin for the year contracted 164 basis points over the previous year to 18.95 percent. Total expenses were 90.39 percent of annual revenues, up from 86.55 percent for the last year. That has resulted in a contraction of 384 basis points in operating margin to 9.61 percent.
Operating income for the year was $12.95 million, compared with $18.20 million in the previous year.
"Our revenues were essentially flat and profits were down in 2016. Total revenues were $134.7 million, down a bit from 2015, as a result of a 4.3% year-over-year decrease in blended average selling prices "ASP" that was partially offset by a 4.0% increase in overall sales volume," said Mr. Zhenyong Liu, chairman and chief executive officer of Orient Paper. "While the uptick in prices for paper products and the stabilization of orders in recent months give us reasons to be optimistic, we remain cautious on the 2017 outlook as slowing GDP growth in China and government’s increasing efforts to combat pollution are likely to continue to take a toll on the paper industry in the near term".
Operating cash flow drops significantlyOrient Paper has generated cash of $15.28 million from operating activities during the year, down 27.95 percent or $5.93 million, when compared with the last year. The company has spent $11.55 million cash to meet investing activities during the year as against cash outgo of $19.33 million in the last year.
The company has spent $3.68 million cash to carry out financing activities during the year as against cash outgo of $2.80 million in the last year period.
Cash and cash equivalents stood at $2.33 million as on Dec. 31, 2016, down 11.71 percent or $0.31 million from $2.64 million on Dec. 31, 2015.
Working capital remains negative
Working capital of Orient Paper was negative $6.11 million on Dec. 31, 2016 compared with negative $13.89 million on Dec. 31, 2015. Current ratio was at 0.70 as on Dec. 31, 2016, up from 0.65 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 14 days for the year from 18 days for the last year. Days sales outstanding went up to 5 days for the year compared with 3 days for the same period last year.
Days inventory outstanding has decreased to 9 days for the year compared with 16 days for the previous year period. At the same time, days payable outstanding was almost stable at 1 days for the year, when compared with the previous year period.
Debt comes down significantlyOrient Paper has recorded a decline in total debt over the last one year. It stood at $16.10 million as on Dec. 31, 2016, down 57.78 percent or $22.03 million from $38.13 million on Dec. 31, 2015. Total debt was 7.72 percent of total assets as on Dec. 31, 2016, compared with 15.98 percent on Dec. 31, 2015. Debt to equity ratio was at 0.09 as on Dec. 31, 2016, down from 0.22 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 4.94 for the year from 5.76 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
