Results are not that bad according to me.
Eventually there new plant is operational. Their old plant was entirely backward integrated, with pulp capacity in hand. With new capacity, there are major fixed expenses to be borne by the company. This may decrease the margin. With utilization increasing operating leverage should be expected to kick in.
There is bit pressure on OPM level, which a eye raising point, however in coming quarter with increasing utilization margins should increase. While it will take time to have the integrated pulping facility for the new facility as well.
Eventually, depreciation expense has been increased 50% QoQ and 100% YoY. As utilization increases, gross margin improve (which might take a year or so considering the increasing spend on backward integration)
Other expense majorly include fuel expense, freight handling and packaging.
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