Sappi reports loss on slower demand
Business Day - Nov 11th 2011, 08:36
SAPPI , the global paper, packaging, pulp and chemical cellulose group, says fourth-quarter operating profit for the year ended September, excluding special items of $80m, was 33% higher than for the third quarter , but lower than the $129m for the same quarter last year.
It says strategic initiatives saw asset impairment and restructuring charges of $165m, despite its North American operations and Southern African chemical cellulose business performing strongly. It also says its European business generated positive operating profit, excluding special items, but high input costs squeezed margins.
This left Sappi with a loss per share of 24 US cents, from earnings per share of 16c in the same quarter last year. However, earnings per share excluding special items and once-off debt refinancing costs was 2c from 9c in the earlier period.
"(This year) was a year of significant intervention — we took dramatic action to achieve a massive reduction in our cost base across our businesses," CEO Ralph Boettger said yesterday.
He said this would better enable the company to serve its customers, and adapt to changing market needs.
"It was also a year of major investment decisions to position our business for growth."
Mr Boettger said all of this hit the group’s net result, but he did not expect more once-off charges in the shorter term.
Sappi said while demand for chemical cellulose showed signs of softening on lower Chinese growth, it had sold a record 190000 tons of the product in the quarter. "The entire profit of the Southern Africa business in the last year was produced by chemical cellulose," Mr Boettger said.
He said it was a double-digit margin, fast-growing business, and that Sappi was the world’s largest global chemical cellulose supplier, at lowest cost.
But he said the group’s other businesses "had a very tough year", including fine coated paper used in media industries, the packaging business, newsprint operations and the A4 office paper division, and this had led to "drastic actions" by management.
Mr Boettger said he did not foresee any more mill closures for now, and market guidance was that the business would return to net profit next year, barring further global economic ructions.
He also said this financial year had started off well, with good underlying profit and operating profit, only to have slowed in the second half.
The company said it was adding focus to its chemical cellulose business, feeding textile industries in China, Indonesia, India and Europe.
Fabric softener brand ordered to change name after Sta-Soft complaint
12/09/2019 - 09:01
A local fabric softener brand has been ordered to change its labelling after the advertising regulatory board found that its use of the word "soft" was imitating rival brand Sta-Soft.
Business models for the digital age
11/09/2019 - 08:25
Gearing up for digital transformation is daunting for any business owner. Taking a business model that has proven to be successful and moving it into the online space involves challenging the status quo, questioning assumptions, and taking an honest look at what works and what doesn’t if a business wants to maintain its competitive edge.
How to introduce a customer-centred business strategy
09/09/2019 - 10:14
Introducing a customer-centred business strategy is not an overnight process. First and foremost, it’s one that requires buy-in from the C-suite with specific, focused and action-orientated objectives put in place. In addition, the value and relevance of the project need to be clearly outlined and communicated to stakeholders to encourage their support at the “launch” thereof and throughout the process of change.
Shopping centres need to adopt an integrated holistic and fluid strategy to drive performance - Clur report
05/09/2019 - 10:36
Shifting local and international approaches to lifestyle, health, wellness, environment, work, and community living are increasingly dictating the need for Southern African shopping centres to adopt an integrated holistic and fluid strategy to drive performance.
Marketing the Future – unlocking the human element in a digital world
03/09/2019 - 12:59
The IMM Graduate School, in partnership with Nedbank, will be hosting the second annual half-day Marketing the Future Conference in Johannesburg, Durban, and Cape Town. This year’s theme, “unlocking the human element in a digital world”, examines how the role of marketers continues to change as technology develops.