Sappi reports results for the second financial quarter

Sappi Chief Executive Officer, Steve Binnie said: “The operating performance for the second quarter fell short of expectations due to challenging market conditions and issues that arose during scheduled maintenance shuts, with the group delivering Adjusted EBITDA of US$107 million.”

Challenging market conditions prevailed across all segments, driven by heightened uncertainty from potential global trade tensions and a broader economic slowdown, which placed downward pressure on selling prices. The forestry fair value price adjustment for the quarter was a loss of US$17 million.

Despite these headwinds, year-on-year sales volumes remained stable, with a modest recovery in packaging and speciality papers volumes, underscoring the long-term potential of these markets. While market conditions for graphic papers remained soft, targeted efforts to grow market share delivered positive year-on-year gains. Amid these macroeconomic challenges, the group remained focused on optimising asset utilisation and advancing cost-saving initiatives to support future performance.

The quarter was negatively impacted by issues that arose during the scheduled maintenance shuts in South Africa, which required additional repairs and extended the shutdowns beyond the planned timeline thereby reducing production for the period. This resulted in an additional financial impact of US$13 million over and above the US$45 million guidance. These issues were resolved and both Saiccor and Ngodwana Mills are running well post start-up. The quarter was also affected by the extended shut for the conversion and expansion of Somerset Mill PM2 in North America, which was US$20 million as per guidance.
details at: https://mediahub.sappi.com/m/41e9bd77bdd40cef/original/Q2-FY25-Financial-results-booklet.pdf

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