Sappi returns to profitability in third financial quarter 2021
The quarter-on-quarter improvement in Group EBITDA and overall return to profit of US$18 million was driven by strong dissolving pulp (‘DP’) prices and an excellent performance from the packaging and specialities segment. These gains were partially offset by ongoing global logistical challenges which impacted export deliveries and costs in all three regions and lower margins in Europe due to significant input cost inflation. Higher selling prices facilitated a substantial increase in EBITDA for the DP segment and sentiment generally remained buoyant on the back of steadily improving retail demand in the apparel sector. The average Chinese market price for hardwood DP increased 19% on the prior quarter to US$1,088 per ton. The EBITDA in the packaging and specialities segment reached a new record high and contributed almost half of the group EBITDA. Sales volumes increased by 23% compared to the equivalent quarter in the prior year and validate the strategic actions taken to reduce exposure to graphic paper through diversification into this segment.