Sappi reported increase of sales and profitability for the three months period ended in March, 2017. According to the announcement, the company made USD 1,316 million of sales generating USD 208 million EBITDA (excluding special items), which represents increase of margin to 15.8% from 15.1% recorded in the previous period.
Steve Binnie, Sappi Chief Executive Officer, commented:
“I am pleased to report that Sappi continues to deliver solid results on the back of our strategic shift to place more emphasis on dissolving pulp and speciality packaging. Coupled with strong cash generation and cost management initiatives to reduce variable costs we are well positioned to achieve our 2020 targets.
EBITDA for the half-year was up 10%; and for this quarter improved by 7% on last year despite our graphic paper business coming under pressure and the significantly stronger Rand/Dollar exchange rate partially offsetting the higher dissolving pulp prices.
Our projects to increase capacity of speciality packaging in Europe and North America are progressing as planned. Capital expenditure in 2017 is expected to be approximately US$350 million. This includes the next phase of the dissolving pulp debottlenecking projects at Ngodwana and Saiccor Mills, the Somerset Mill wood-yard and the initial phases of the speciality packaging conversions.
Sappi’s Biotech business is also progressing well, with the opening of a second-generation pilot plant for sugar extraction at our Ngodwana Mill in South Africa just after quarter close and the signing of a global sales agreement with Cellmark of Sweden for our Lignosulphonate products.”
In the last 3 months period ended December 2016 the company increased EBITDA margin to 11.5%.
Earlier Sappi Europe increases prices for all of its coated mechanical reels from July 1 , 2017.
South African Pulp and Paper Industries (Sappi) Limited was founded in 1936. The company is headquartered in Johannesburg. It is focuses on commodity paper products, pulp, chemical cellulose and forest and timber products for Southern Africa and export markets. In 2013, it was reported as the world’s largest producer of dissolving wood pulp.