Sappi provides Q1 FY2026 financial update
JSE-listed forestry and woodfibre resource group Sappi has released its financial results for the quarter ended 31 December 2025. The group delivered Adjusted EBITDA of US$90 million for the quarter.
Commenting on the results for the period, group CEO Steve Binnie said: “Market conditions remained challenging during the quarter with ongoing macroeconomic pressures, subdued consumer confidence and overcapacity driving pricing declines across all product segments.
“The results were impacted by Rand appreciation against the US Dollar, a combination of scheduled and unscheduled maintenance work as well as lower dissolving wood pulp (DWP) prices. These adverse impacts were partially offset by ongoing group-wide strategic cost saving initiatives and the annual energy refunds in Europe.
“In response to the headwinds faced by the group, we continue to implement a number of cost saving initiatives to offset lower selling prices and significant weakening of the USD against the ZAR and EUR. We have further reduced our capital expenditure for FY2026 to approximately US$260 million to proactively manage the balance sheet and preserve cash. Liquidity improved further after quarter-end with the increased international RCF and the new term loan.
We remain focused on executing the 'Back to Basics' phase of our Thrive strategy, closely monitoring external developments while prioritising strong cost discipline and targeted operational efficiency improvements to strengthen the balance sheet and maintain agility during this period of market weakness.”
Further detail and segmental reporting is available on our website www.sappi.com/latest-financial-results.
Update on proposed joint venture with UPM
Sappi has also provided an update on the potential formation of a 50/50 joint venture with UPM-Kymmene Corporation (“UPM”) for graphic papers in Europe. The proposed joint venture will combine Sappi’s European graphic paper operations with UPM’s Communications Paper business in Europe, the UK, and the USA.
The parties intend to sign definitive agreements during the first half of 2026 and expect to complete the transaction by the end of 2026, subject to the fulfilment of all conditions precedent.
Outlook
In light of the rapidly evolving global trade environment, Sappi management are erring on the side of caution.
Binnie concludes: “A challenging global macroeconomic environment and persistent geopolitical and trade tensions continue to disrupt market stability and dampen consumer demand, negatively impacting our industry. Taking into account the challenging macroeconomic environment, exchange rate headwinds and depressed DWP pricing, we anticipate that Adjusted EBITDA for the second quarter of FY2026 will be below that of the first quarter of FY2026.”
ENDS
About
Sappi uses renewable resources to make woodfibre-based products. We are a diversified, innovative and trusted leader focused on sustainable processes and products, and are building a circular economy that benefits the world.
Our pulp, packaging and speciality papers, graphic papers and biomaterials are manufactured from woodfibre sourced from sustainably managed forests, in production facilities which, in many cases use internally generated bioenergy. Many of our operations are energy self-sufficient.
We have manufacturing operations on three continents and sell our products in more than 150 countries. Our global presence allows us to optimise for different markets, while sharing best practices and the latest technological achievements.
Together with our partners, we work to build a thriving world by acting boldly to support Prosperity, People and Planet while upholding our Principles.
Issued by Nadia Rossouw Communications & PR (NRPR)
Bilqees Gabier
Tel +27 (0)83 923 9939
[email protected]
Nadia Rossouw
Tel +27 (0)83 679 8338
[email protected]
For further information
André F Oberholzer
Group Head Corporate Affairs
Sappi Limited
[email protected]
Tracy Wessels
Group Head Investor Relations and Sustainability
Sappi Limited
[email protected]
Related document downloads - Q1 FY26
Market conditions remained challenging during the quarter with ongoing macroeconomic pressures, subdued consumer confidence and overcapacity driving pricing declines across all product segments.
STEVE BINNIE, CHIEF EXECUTIVE OFFICER OF SAPPI LIMITED
Related Media releases
Sappi and UPM propose combining their European-based graphic paper businesses to create a new Joint Venture company
Sappi Limited (“Sappi”) and UPM-Kymmene Corporation (“UPM”) have today announced the signing of a non-binding letter of intent to form a non-listed, independent 50/50 Joint Venture for graphic paper.
Sappi Limited reports its fourth quarter and full year financial results for 2025
“Sappi’s immediate focus remains on internal levers within the company’s control,” says Sappi CEO Steve Binnie, adding: “Our ‘Back to Basics’ focus is to reduce debt and strengthening the balance sheet through targeted cost savings initiatives and operational efficiency improvements.”
Sappi concludes sale of Lomati Sawmill to Normandien Farms
Sappi Southern Africa Limited (“Sappi”) is pleased to announce that the Competition Commission has approved the transaction in terms of which Normandien Farms (Pty) Limited (“Normandien”) will acquire the Lomati Sawmilling business (“Lomati”) from Sappi.