Sappi Limited – Q4 and full FY23 financial results

Against a backdrop of a persistently volatile and challenging macroeconomic environment Sappi delivered EBITDA excluding special items of US$731 million for the year ended September 2023. The widespread disruption caused by ongoing geopolitical instability, weak global economic growth, rising interest rates, and an underperforming Chinese economy negatively impacted markets for our products. The unfavourable trading conditions faced in 2023 were further exacerbated by a prolonged period of downstream inventory destocking as buyers slowly worked through inventories that had been built up in the second half of 2022. In response to these headwinds, we concentrated on preserving selling prices, efficiently managed our capacity and inventories to optimise working capital and implemented various cost-saving initiatives across our operations, all of which positively contributed to the earnings performance.

Despite 2023 being one of the most challenging downcycles experienced in the pulp and paper industry, with demand for our paper products falling below that of the Covid-19 pandemic years, we achieved some significant milestones. The South African business delivered record EBITDA (in ZAR) and North America the second highest ever EBITDA. The group generated significant cash which enabled a further reduction of net debt at year-end to US$1,085 million, the lowest level in 30 years.
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