Sappi announces financial results for fourth quarter and full year

Commenting on the group’s results, Sappi Chief Executive Officer Steve Binnie said: “The group’s performance over the past year was severely impacted by the Covid-19 pandemic, the related government lockdowns and the ensuing economic after-effects. While the first half of the year was satisfactory given that we started the year with dissolving pulp prices at historic lows, the third quarter saw the full impact of Covid-19 before a gradual recovery began in the fourth quarter, in particular for Dissolving Pulp (DP). The improvement is further evidenced by the quarter-on-quarter improvement in EBITDA from US$26 million to US$82 million.”

Throughout this unprecedented time the health and safety of our employees remained paramount. A comprehensive Covid-19 action plan enabled us to operate in a safe and uninterrupted manner where demand permitted. Working closely with our customers and suppliers we systematically increased activity and output in response to improved market demand and our support for local communities helped mitigate the impact of the pandemic and the ensuing socio-economic consequences on them.

In response to the challenging market conditions we focused on the preservation of liquidity, lowering costs and re-prioritising various strategic actions. Commercial downtime of 1.1 million tons was taken across all segments as required, in order to match supply to demand and prevent the build-up of inventory. However, this had major repercussions for operating efficiency, fixed cost absorption and profitability. Additionally, non-critical capex projects were deferred, and some annual maintenance shuts were postponed for a short period. The project to expand the Saiccor Mill capacity, which was put on hold through the initial months of the Covid-19 outbreak, is 75% complete and we expect completion in the third quarter of FY2021.

Financial summary for the quarter and full year
• EBITDA excluding special items o For the quarter US$82 million (Q4 FY19 US$185 million) o For the year US$378 million (FY19 US$687 million)
• Loss for the period *For the quarter US$88 million (Q4 FY19 profit of US$50 million) *For the year US$135 million (FY19 profit of US$211 million)
• EPS excluding special items *For the quarter -4 US cents (Q4 FY19 10 US cents) *For the year -5 US cents (FY19 44 US cents)
• Cash generation for the quarter of US$88 million (Q4 FY19 US$173 million)
• Net debt US$1,957 million (FY19 US$1,501 million)

For the quarter, packaging and specialities volumes and profitability increased compared to the prior year as the US business in particular experienced encouraging sales growth across all of the major product categories, offsetting a slightly weaker performance from the European business which was affected by the temporary shut of Alfeld PM3 following the fire at that machine in the previous quarter and softer demand for non-essential consumer products. The South African containerboard business also achieved a strong end to the year.
details at: https://cdn-s3.sappi.com/s3fs-public/Q4-FY20-Financial-results-media-release-Final.pdf

Related Posts

Port Hawkesbury Paper Announces Price Increase

Effective with all shipments on 5/18/2018 or later, regardless of order date, the price of Port Hawkesbury Paper SC grades will be increased in the US and Canadian markets. This includes all Artisan® Plus, Artisan®, Prominence® Plus, Prominence®, and Maritime® grades. This price increase applies to all basis weights plus all related private label grades and associated brand extensions.

Orchids Paper Products Company Announces 2017 Second Quarter Results

Orchids Paper Products Company reported results for the quarter ended June 30, 2017. The following tables provide selected financial results for second quarter 2017 compared to second quarter 2016 and first quarter 2017. Net sales decreased $1.0 million, or 2%. Major factors include: parent roll sales volume increased $3.7 million; converted-product sales volumes declined $2.3 million; and there was a decrease of $2.3 million in average converted-product prices, reflecting both the lower prices associated with new bids which became effective in 2017 and the product mix sold to a changing mix of customers. Cost of sales increased $4.4 million, or 13%. Standard cost of sales for parent rolls increased $2.4 million due to the much higher number of parent-roll tons sold. This leaves a $2.0 million, or 7%, increase in cost of sales that is primarily attributable to converted product sales. Major contributors to this increase include: start-up costs at Barnwell including additional direct labor and overhead, the liquidation of older higher-cost inventory, fiber and other material cost increases, labor usage, and health care cost increases. Additionally, the second quarter of 2016 benefited from the recovery of $1.1 million in business interruption insurance proceeds, which did not reoccur in 2017. Click Read More below for additional detail.

Solenis to Expand Price Increase on Polyacrylamide Polymers and Retention Aids in EMEA

Solenis will increase prices by 10 to 15 percent on all polyacrylamide polymers, coagulants and retention aids across the EMEA region, effective immediately, or as customer contracts allow. Originally announced last month, Solenis readjusted the price increase and also included coagulants to the list of products affected. The increase is necessary due to the major impact on key feedstock costs, and also from raw material shortages that are tighter than anticipated.
Back To Top
×Close search
Search