Sappi delivers solid performance for first financial quarter 2023

Commenting on the group’s results, Sappi Chief Executive Officer Steve Binnie said: “I am pleased with another strong performance from the Group which was well above pre-Covid levels and the best ever first quarter results. EBITDA of US$290 million was 21% above the prior year and in line with guidance provided in the previous quarter. The positive results were underpinned by year-on-year pricing gains for paper products which offset cost inflation, lower sales volumes and delivered an EBITDA margin of 17.5%.”

The lower profits relative to the record levels in the prior quarter were reflective of the slowing global economy, which led to a softening in demand for our products, driven by the volatile and uncertain macroeconomic context including ongoing geopolitical turmoil, rampant inflation, rising interest rates and an underperforming Chinese economy as well as rapid downstream inventory accumulation in all our major product categories.

Looking forward, Binnie stated: “Factoring in the protracted macroeconomic uncertainty, and coming off three quarters of outperformance, we anticipate a return to a normalised level of earnings in FY2023. The second quarter will likely be the most challenging with a recovery in earnings expected later in the financial year. EBITDA for the second quarter of FY2023 is expected to be below that of the first quarter.”

Financial summary for the quarter
• EBITDA excluding special items US$290 million (Q1 FY22 US$240 million)
• Net debt US$1,241 million (Q1 FY22 US$1,917 million)
• Profit for the period US$190 million (Q1 FY22 US$123 million)
• EPS excluding special items 30 US Cents (Q1 FY22 20 US Cents)
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