Paper giant Sappi records first quarter results ahead of expectations, up 56% year-on-year

 

 

Sappi has recorded first quarter results (ending January) ahead of expectations; up 56% year-on-year.

 

Financial summary for the quarter

 

Adjusted EBITDA US$203m (Q1 FY24 US$130m)

 

Profit for the period US$70m (Q1 FY24 loss of US$126m)

 

In Europe it reported:

 

Cost-saving initiatives and strategic rationalisation of graphic paper assets contributed to a more resilient and efficient European business

 

Sales volumes declined, higher selling prices and improved capacity utilisation helped maintain profitability and operational stability

 

Demand for label grades in speciality papers showed notable growth, with both sales volumes and pricing improving year-on-year

 

Fixed costs in Europe decreased by 12%, reflecting the benefits of streamlined operations and workforce restructuring

 

Steve Binnie, chief executive, said: “Despite continued challenging global macroeconomic conditions and weak paper markets I am pleased that the group delivered Adjusted EBITDA of US$203 million, which was ahead of expectations and substantially above last year.

 

“Year-on-year profitability improved across all segments, supported by cost savings, operational efficiency gains, higher dissolving pulp (DP) selling prices and sales volumes combined with improved packaging and speciality papers sales volumes. Against the backdrop of global macroeconomic headwinds, weak consumer spending and overcapacity in paper markets, our Thrive strategy – in particular our strategic capacity rationalisation and cost-saving initiatives – continued to deliver positive outcomes.”