Sappi results for 3rd quarter ended June 2015 highlights impact of exchange rates in seasonally weak quarter
The third quarter is seasonally the weakest for Sappi. In addition, the pulp mill upgrade at Gratkorn and planned annual maintenance shuts in all three regions reduced profit by approximately US$27 million compared to the equivalent quarter last year. The group generated EBITDA, excluding special items, of US$109 million, operating profit excluding special items of US$43 million and profit for the period of US$4 million. Earnings per share excluding special items for the quarter was 2 US cents, as it was in the equivalent quarter last year. The North American business experienced significant pressure as a result of the stronger US dollar, which led to increased imports of coated paper, lower coated paper sales volumes and lower margins for the release paper business. The domestic graphic paper market was also weaker than expected. The performance of the European business was adversely impacted by the higher cost of raw materials due to the stronger US Dollar and additional pulp purchases during the upgrade of the recovery boiler at Gratkorn. The market for graphic paper continues to decline in Western Europe. However, the weaker Euro made exports more competitive and profitable.