Financial summary for Q1 FY20 ended December 2019:
- EBITDA excluding special items US$139 million (Q1 FY19 US$197 million)
- Profit for the period US$24 million (Q1 FY19 US$81 million)
- EPS excluding special items 6 US cents (Q1 FY19 16 US cents)
- Net debt US$1,916 million (Q1 FY19 US$1,557 million)
Sappi announces financial results for the first quarter
Commenting on the result, Sappi Chief Executive Officer Steve Binnie said: “A good performance from the European and North American packaging and specialities segment and satisfactory results from the graphic paper businesses were not enough to offset the significant impact from the unprecedented and markedly lower dissolving wood pulp (DWP) prices. DWP market prices fell US$272/ton in the last year as the combined impact of soft global textile markets, excess viscose staple fibre (VSF) capacity and a weaker US$/Renminbi exchange rate drove the DWP price downwards. On the supply side, low paper pulp prices provided no relief for swing producers. This significantly impacted both the segment and group profitability levels.”
Binnie added that “The ongoing strategy to diversify the product portfolio into higher-margin segments and position the company for future growth reaped rewards as the packaging and specialities segment continued to grow profitability. The focus on efficiencies and costs combined with strong customer relationships and service levels ensured profitability for graphic paper was stable despite weak global demand. Sales volumes for packaging and specialities in Europe increased across all major product categories. In North America sales volumes for packaging and specialities grew 43% year-on-year, driven mainly by the ramp-up of the paperboard grades on PM1 at Somerset Mill. In South Africa, the containerboard segment struggled with low demand driven by high levels of converter inventory, a weak South African economy and an ongoing drought in some citrus-producing regions.
The substantial market share gains in coated woodfree paper in both North America and Europe countered the ongoing deterioration in graphic paper demand, enabling us to take fewer production curtailments than in recent quarters. Declining input costs helped maintain healthy margins.”
You can download and view all of the latest financial results below, alongside our 2019 Annual Integrated Report.