Sappi lifts Q2 Ebitda
On the back of its strategic shift to place more emphasis on dissolving pulp and specialty packaging, Sappi has delivered “solid results” in the three months to March 31.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 7% year-on-year to $208-million for the second quarter of the current financial year. Ebitda for the six months to March 31, rose 10% year-on-year to $409-million.
While profit for the quarter decreased from $100-million to $88-million, owing to an $18-million positive after tax plantation fair value adjustment in 2016, profit for the half-year improved to $178-million, from $175-million in the first half of the prior financial year.
“The specialised cellulose business benefited from strong demand and favourable pricing for dissolving wood pulp (DWP), which followed the trends for viscose staple fibre, cotton and polyester,” CEO Steve Binnie said in a statement on Monday.
The South African business continued to deliver strong margins, with improved dollar selling prices for DWP, higher sales volumes and reverting the yearly Ngodwana shut to the third-quarter, offsetting increased variable costs.
DWP sales volumes rose compared to both the prior quarter and equivalent quarter last year.
The paper business in South Africa had a positive quarter, with higher sales volumes in the containerboard and newsprint categories.
However, the stronger rand:dollar exchange rate impacted on sales prices, particularly for exports.
The speciality packaging business continued to achieve strong sales growth and profit margins.
Sappi reduced its net debt to $1.33-billion by the end of the second quarter.
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