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Sappi Limited Results For The First Quarter Ended 27 December 2009

JOHANNESBURG, Jan. 28 /PRNewswire/ --

  • Operating profit excluding special items increased to US$81 million (Q1 2009: US$25 million)
  • General improvement in demand for fine paper and pulp
  • Increased pulp prices; favourable for Southern African and North American businesses, but unfavourable for European business
  • Basic loss per share 10 US cents (unfavourably impacted by 11 US cents special items)
  • Cash generated from operations US$245 million (Q1 2009: US$95 million); net cash outflow US$30 million (Q1 2009: outflow US$121 million)

Summary

    
    
    
                                                   Quarter ended
                                                   -------------
                                                               
                                        Dec. 2009    Dec. 2008 Sept. 2009
                                         --------    --------  ---------
    Key figures: (US$ million)
    --------------------------
    Sales                                    1,620      1,187      1,553
    -----                                    -----      -----      -----
    Operating profit (loss)                      1         57       (129)
    -----------------------                    ---        ---       ----
          Special items – losses
           (gains)*                             80        (32)       167
          ----------------------               ---        ---        ---
          Operating profit excluding
           special items                        81         25         38
          --------------------------           ---        ---        ---
          EBITDA excluding special items*      193        106        150
          ------------------------------       ---        ---        ---
    Basic (loss) earnings per
     share (US cents)                          (10)         6        (20)
    -------------------------                  ---        ---        ---
          Net debt*                          2,581      2,497      2,576
          ---------                          -----      -----      -----
    
    
    Key ratios: (%)
    ---------------
    Operating profit (loss) to sales           0.1        4.8       (8.3)
    --------------------------------           ---        ---       ----
          Operating profit excluding
           special items to sales              5.0        2.1        2.4
          --------------------------           ---        ---        ---
          Operating profit excluding
           special items to Capital
           Employed  (ROCE)*                   7.5        2.6        3.3
          --------------------------           ---        ---        ---
          EBITDA excluding special items
           to sales
          ------------------------------
          Return on average equity
           (ROE)*                             11.9        8.9        9.7
          ------------------------            ----        ---        ---
          Net debt to total
           capitalisation*                   (11.6)       5.3      (21.4)
          -----------------                  -----        ---      -----
                                              60.0       57.3       58.9
                                              ----       ----       ----
    
    

*        Refer to the published results for details on special items, the definition of the terms, the reconciliation of profit/loss for the period to EBITDA excluding special items.

The table above has not been audited or reviewed.

Commenting on the results, Sappi (NYSE: SPP)  chief executive Ralph Boettger said:

"The operating results excluding special items for the group improved substantially compared both to the equivalent quarter last year and to the prior quarter. Demand continued to improve for our major products with a steady improvement in demand for coated woodfree paper. Paper pulp prices and prices for chemical cellulose have continued to rise, driven by improved demand in general and good demand from China. Demand for coated mechanical paper has, however, not recovered and demand conditions in the South African domestic market remained challenging.

"The Fine Paper business results excluding special items improved compared to a year earlier but fell short of the prior quarter primarily as a result of seasonal factors. The Southern African business returned to profitability excluding special items largely as a result of the improving performance of the expanded Saiccor Mill.

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