A Sino-Forest Gaoyao Particle Board operation in the city of Gaoyao, China .
Sino-Forest Corp. , a Toronto-headquartered company that operates tree harvesting plantations in China, reports its profit in the second quarter jumped 41 per cent to $63.7-million (U.S.) from $45-million.
Revenue increased 36 per cent to $305.8-million from $224.4-million, the company said Tuesday.
Sino-Forest, which reports in U.S. dollars, said its earnings per share rose to 26 cents from 23 cents.
The company benefited from the booming Chinese economy and strong demand for wood products.
"We are very pleased to report continuing double-digit growth in revenue and net income in the second quarter of 2010, despite a number of measures launched by China's Central Government to cool down an over-heated economy and property speculation," Allen Chan, chairman and CEO of Sino-Forest, said in a release before stock markets opened.
"Sino-Forest was not overly affected by the tightening measures, as our operations are focused on emerging markets within China and as the country's large wood fibre deficit continues to grow. Further, the areas in and around Yunnan continue to show strong growth and demand for fibre as demonstrated by our sales in this region in the first half of 2010."
Looking ahead Mr. Chan said market prices could rise because of a log shortage.
"Despite the heavy rainfall in the second quarter of 2010 which caused severe flooding in many provinces across China, our operations were not significantly affected and we anticipate that there will be a short-term fibre shortage in the country's wood markets," Mr. Chan said.
"Currently, log prices are about 5 per cent below their highs in 2008, and we anticipate that these prices will continue to rebound given solid demand and the short-term impact from flooding."