Sappi has presented solid financial results for its second quarter, within a challenging macroeconomic environment and subdued market conditions. EBITDA excluding special items was $183m (Q2 FY23 $167m).
Steve Binnie, CEO, said, “Within the context of subdued underlying market conditions due to the challenging macroeconomic environment I am pleased that the group delivered EBITDA of $183m, 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 $3m. A modest recovery in global paper markets was also observed following the extended destocking cycle in 2023.
Binnie concluded, “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.”
