IT Tech Packaging(US:ITP)2024-08-12 20:15Revenue Performance - Revenue for the three months ended June 30, 2024, was $26,249,788, a decrease of $3,770,126, or 12.56%, from $30,019,914 for the same period in 2023[156]. - Revenue from sales of offset printing paper, corrugating medium paper (CMP), and tissue paper products for the three months ended June 30, 2024, was $26,212,815, representing a decrease of $3,762,919, or 12.55%, from $29,975,734 for the same period in 2023[158]. - Revenue from offset printing paper was $nil for the three months ended June 30, 2024, representing a decrease of $3,155,882, or 100.00%, from $3,155,882 for the same period in 2023[166]. - Revenue from tissue paper products was $nil for the three months ended June 30, 2024, representing a decrease of $344,332, or 100.00%, from $344,332 for the same period in 2023[170]. - Revenue for the six months ended June 30, 2024 was $33,113,629, a decrease of $16,697,162, or 33.52%, from $49,810,791 for the same period in 2023[186]. Sales and Production Metrics - Total CMP sold during the three months ended June 30, 2024, amounted to 75,365 tonnes, representing a decrease of 3,271 tonnes, or 4.16%, compared to 78,636 tonnes sold in the comparable period in 2023[158]. - Total quantities of offset printing paper, CMP, and tissue paper products sold decreased by 34,475 tonnes, or 26.83%, from 128,509 tonnes in the first half of 2023 to 94,034 tonnes in 2024[187]. - The utilization rate for the PM6 production line, which produces regular CMP, was 68.02% for the second quarter of 2024, compared to 66.61% for the same period in 2023[165]. Cost and Profitability - Total cost of sales for CMP, offset printing paper, and tissue paper products for the quarter ended June 30, 2024, was $22,984,488, a decrease of $5,807,701, or 20.17%, from $28,792,189 for the comparable period in 2023[168]. - Average cost of sales per tonne for CMP decreased by 9.76%, from $338 in the second quarter of 2023 to $305 in the second quarter of 2024[169]. - Gross profit for the three months ended June 30, 2024 was $3,265,300, an increase of $2,085,442, or 176.75%, from $1,179,858 for the same period in 2023[176]. - Gross profit margin for offset printing paper, CMP, and tissue paper products increased by 8.37 percentage points, from 3.95% in Q2 2023 to 12.32% in Q2 2024[178]. - Gross profit for the six months ended June 30, 2024 was $3,664,413, an increase of $2,761,554, or 305.87%, from $902,859 for the same period in 2023[195]. - The overall gross profit margin for offset printing paper, CMP, and tissue paper products increased by 9.03 percentage points, from 1.84% in the first half of 2023 to 10.87% in the first half of 2024[196]. - Gross profit margin for regular CMP increased to 10.86%, up 6.15 percentage points from 4.71% in the same period last year, primarily due to decreased material costs[197]. - Gross profit margin for light-weight CMP rose to 10.90%, an increase of 5.04 percentage points from 5.86% year-over-year, also driven by lower material costs[197]. Operating Income and Loss - Operating income for the quarter ended June 30, 2024 was $547,752, an increase of $1,066,435, or 205.60%, from a loss of $518,683 in Q2 2023[182]. - Operating loss decreased to $2,953,918, a reduction of $337,126 or 10.24% from $3,291,044 in the prior year[199]. - Net loss for the quarter ended June 30, 2024 was $77,747, a decrease of $1,175,746, or 93.80%, from a net loss of $1,253,493 in Q2 2023[185]. - Net loss for the six months ended June 30, 2024, was $3,824,283, a decrease of $162,375 or 4.07% from $3,986,658 in the same period last year[202]. Financial Position and Cash Flow - Net accounts receivable surged by $2,062,693, or 358.40%, reaching $2,638,219 as of June 30, 2024, compared to $575,526 at the end of 2023[203]. - Inventory value increased by 48.58% to $5,282,420 from $3,555,235 as of December 31, 2023, with recycled paper board inventory rising by 1,642.01%[204]. - Cash and cash equivalents rose to $6,043,922, an increase of $1,652,001 from $4,391,921 at the end of 2023[211]. - Net cash provided by operating activities was $1,346,337, a decrease of $4,400,382 or 76.57% from $5,746,719 in the same period last year[212]. Debt and Interest Expenses - Long-term loans as of June 30, 2024, totaled $11,308,021, a slight decrease from $11,378,429 as of December 31, 2023[221]. - Total interest expenses for short-term and long-term loans for the three months ended June 30, 2024, were $211,551, compared to $268,499 in 2023, representing a decrease of approximately 21.2%[228]. - Total interest expenses for the six months ended June 30, 2024, were $421,841, down from $513,179 in 2023, indicating a decrease of approximately 17.8%[228]. - The total outstanding loan balance for a new loan entered on December 5, 2023, was $1,206,713 as of June 30, 2024, compared to $1,214,226 as of December 31, 2023[227]. - The accrued interest owing to Mr. Zhenyong Liu was approximately $594,617 as of June 30, 2024, down from $598,319 as of December 31, 2023[233]. - The total amount of loans due to Mr. Zhenyong Liu was $nil as of June 30, 2024, with interest expenses for related party loans also reported as $nil for the same period[240]. Other Financial Considerations - The Company has not entered into any hedging transactions to mitigate foreign exchange risks, which may affect revenues and results of operations due to fluctuations in the RMB/USD exchange rate[250]. - The Company does not expect the adoption of new accounting standards to have a material impact on its consolidated financial statements[248]. - The Company has not identified any events indicating the need to record impairment of long-lived assets for the six months ended June 30, 2024[245]. - Inflation has not materially impacted the Company's financial position or results of operations to date, but future high inflation rates may adversely affect gross margins[251].