Johannesburg, 9 November 2006 -- Results for the fourth quarter ended September 2006:
- EPS 18 US cents; headline EPS 2 US cents
- North America reports operating profit
- European headcount reduction - 650 positions
- Rand weakness benefits SA businesses
- Usutu mill turnaround
- Improved cash flow
The quarter under review
Commenting on the results, Sappi Chairman, Eugene van As, said:
"Earnings and cash flow were much better this quarter and we achieved our target of returning to profitability. Earnings per share of 18 US cents included a number of abnormal items which largely offset each other. Cash generated after investing activities was US$106 million, a marked improvement on the US$59 million of cash utilised in the prior quarter. Our performance has been driven by positive global demand, better operating performance and lower costs, aided by a weaker Rand."
Looking forward, van As commented:
"We have seen continued improvement in the supply/demand balance for coated fine paper. After the exuberant expansion of capacity in Europe at the start of this decade and more recently in Asia, there are no known major coated fine paper machines due to start up before late 2009, and significant capacity has been closed in Europe and North America during the past year. We expect further improvement in our operating performance in the December quarter and that earnings before any plantation fair value adjustments will be positive."
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