TORONTO -- Sino-Forest Corp. reported a 41% rise in second quarter profit Tuesday on higher revenues as demand continues to grow for wood fibre in China.

For the period ended June 30, Toronto-based Sino-Forest earned $63.7-million (26¢ a share) compared with $45-million (23¢) in the same period last year.

Revenues are up 36% to $305.8-million, while gross profit margin widened four percentage points to 40.3% from 36.6%.

Allen Chan, chief executive with Sino-Forest, said the company continued to grow despite measures launched by the Chinese government to cool down the country's runaway economy, which has sent property values skyrocketing.

"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," he said in a release.

As well, the heavy rainfall and severe flooding in many regions of the country in recent weeks did not affect the company's operations, he said. He expects there to be short-term wood shortages due to the flood.

On the other hand, the heavy rain did mean the company fell short in its replanting program, with only 2,000 hectares of a targeted 25,000 hectares completed.

The replanting is now back on track and the company expects to have it complete by the end of the year.

Sino-Forest runs tree plantations in China, selling wood fibre, logs and engineered wood products. It also holds a majority interest in Omnicorp Ltd., a Hong Kong holding company with hardwood harvesting rights in Suriname.