Sappi reported stable EBITDA amid increase of sales for the three months period ended in June 2017. According to the announcement, the company made USD 1,260 million of sales generating USD 155 million EBITDA (excluding special items), which represents increase of margin to 12.3% from 13.1% recorded in the same period the last year.
Steve Binnie, Sappi Chief Executive Officer, commented:
“I am pleased to report that during the past quarter Sappi delivered profits up 81% from a year ago, reduced debt by a further 17% (USD 265 million) year-on-year. We also repaid USD 400 million in bonds from cash reserves which will generate savings of approximately USD 21 million per annum on our net interest charge.
“Sappi’s third quarter is seasonally and historically its weakest quarter due to the slow-down in business activity during the Northern Hemisphere summer holiday period and Sappi’s choice to use this quarter to undertake major annual maintenance shuts. The past quarter’s earnings (EBITDA ex special items) at USD 155 million where almost flat on a year ago. Higher volumes were offset by higher raw material prices and a stronger Rand/Dollar exchange rate.
Based on current market conditions, including higher paper pulp prices and the current Rand/Dollar exchange rate, we expect the group’s fourth quarter operating performance to be slightly below that of last year. The full year result is likely to be above that of the prior year.”
In the last 3 months period ended March 2017 the company increased EBITDA margin to 15.8%.
Earlier Sappi Europe increases prices for all of its coated mechanical reels from July 1 , 2017.
South African Pulp and Paper Industries (Sappi) Limited was founded in 1936. The company is headquartered in Johannesburg. It is focuses on commodity paper products, pulp, chemical cellulose and forest and timber products for Southern Africa and export markets. In 2013, it was reported as the world’s largest producer of dissolving wood pulp.