Sino-Forest Corp has posted second quarter results above market estimates, helped by higher average selling prices of standing timber, as well as an increase in its wood log trading business.
Revenue rose 36% to US$305.8m, with the largest contribution from a 77% rise log sales.
The Canadian company, which owns and manages forest plantations in China, earned US$63.7m, or 26 cents a share, in the second quarter, up from US$45m or 23 cents a share, last year.
In a statement, chief executive Allen Chan said China’s demand for wood products continued to rise and the country’s wood deficit was growing.
The Chinese government continues to provide stimulus spending for infrastructure improvements, construction of low-income housing, and economic development in rural and western regions of the country, which will impact on demand for timber.
“We expect 5 million new housing units will require about 800 million to 1.4 billion m³ of wood fibre over the next five years,” said Mr Chan.
