Commenting on the group’s results, Sappi Chief Executive Officer Steve Binnie said: “Within the context of subdued underlying market conditions due to the challenging macroeconomic environment I am pleased that the group delivered EBITDA of US$183 million, which was 10% above the prior year.”
The increase was primarily due to an improvement from the pulp segment and significant costs savings, which included a 9% reduction in cash fixed costs following the closure of the Stockstadt and Lanaken Mills in Europe. Included in EBITDA was a positive plantation fair value price adjustment of US$3 million. A modest recovery in global paper markets was also observed following the extended destocking cycle in 2023.
Looking forward to Sappi’s third quarter, Binnie stated: “While we expect a gradual improvement in paper markets there will be a reduction in output due to a number of planned maintenance shuts in the quarter. We therefore anticipate that EBITDA (excluding a slightly negative fair value price adjustment) for the third quarter of FY2024 will be below that of the second quarter but substantially above last year.”
Financial summary for the quarter
- EBITDA excluding special items US$183 million (Q2 FY23 US$167 million)
- EPS excluding special items 12 US cents (Q2 FY23 11 US cents)
- Net debt US$1,366 million (Q2 FY23 US$1,225 million)
- Closure of Stockstadt and Lanaken Mills completed
Source: Sappi
