China's biggest tissue maker posted its profit reports and claimed that it consistently enjoys a greater influx of profits since 2015 and especially during the pandemic. The report claimed that panic hoarding of toilet paper in countries such as Sydney and Hong Kong.
Vinda International Holdings is China's largest producer of tissue and toilet paper. The company revealed its profit generation this year and claimed that the first quarter of 2020 is the most profitable period since 2015. Its gross profit margin increased by 11.2 percentage points to 37.5 percent from January to March of 2020.
The report revealed that the significant profit jump was caused by the mysterious hoarding of toilet paper in Sydney and Hong Kong during the early days of the pandemic. The price of the raw material for making the product called pulp also significantly decreased, thereby resulting in higher profits for the company.
Data acquired from the filing of Vinda International Holdings for the first quarter of 2020 showed a net profit increase by 65 percent yielding 377 million HKD at the Hong Kong stock exchange. Its sales, however, fell by 16 percent, valued at 3.4 billion HKD. The decline was said to be caused by slower growth in mainland China that also resulted in the closure of 12 production lines for weeks.
According to Vinda's chief executive officer Johann Christoph Michalski, production of tissue paper resumed during mid-March after China lifted the order of factory closures of its 12 production lines. He added that the business environment in the country remains challenging. He also noted that the company is still recovering from the suspension of production during the pandemic control period.
Michalski also revealed that the company recorded a decline in revenue despite continued demand for its products. Profitability was said to be driven by optimized product mixes and soft pulp prices. The Hong Kong Standard reported that Vinda International Holdings that its shares dropped by 2.81 percent to 22.50 HKD.
In other news, Yahoo! Finance reported that sales of another tissue paper maker Kimberly-Clark Corp. increased its sales by five billion USD beating market estimates. The significant increase was also perceived to be the result of increased consumer spending for the product.
During the first quarter of 2020, the total net sales of the company increased by eight percent to five billion USD exceeding analysts' expectations of only 4.89 billion USD. The fluctuation of reduced sales, on the other hand, was by two percent. Lastly, the adjusted earnings per share of the US toilet maker company is now valued at 2.13 USD, also beating analysts forecast of only 1.98 USD.
