Financial Summary for the quarter: Profit for the period US$45 million; Q1 2011 US$37 million; EPS 9 US cents; Q1 2011 7 US cents; Operating profit excluding special items US$100 million; Q1 2011 US$137 million; European business performance benefits from restructuring and cost reduction actions; Southern African chemical cellulose business performed strongly; Net debt US$2,175 million, up US$75 million on seasonal working capital increase.
Commenting on the results, Sappi (NYSE: SPP, JSE: SAP) Chief Executive Officer Ralph Boettger said:
"Following a year in which various actions and strategies were initiated, primarily involving extensive restructuring charges and asset impairments, the group achieved a profit for the period of US$45 million (Q1 2011 US$37 million) and EPS of 9 US cents (Q1 2011 7 US cents) in the first quarter of the 2012 financial year.
"Market conditions remained uncertain as a result of the continued negative sentiment in financial markets. Nevertheless, utilisation levels for our coated paper mills remained at high levels in North America and reasonable levels in Europe.
"Pulp prices continued to decline during the quarter but stabilised towards the end of the quarter.
"The coated paper businesses performed in line with expectations in North America and the improvement in Europe reflected the cost reduction and restructuring actions we implemented last year.
"The performance of the North American segment was unfavourably impacted by lower pulp output, declining pulp prices and weaker demand for casting release products particularly in the Chinese markets.