Sappi shares wobble after quarterly earnings report
By Andries Mahlangu - Aug 3rd, 13:45
Sappi shares wobbled in early trade on the JSE, losing 2%, after the paper and pulp producer forecast lower operating performance in its fourth quarter. It cited higher prices for raw materials and a stronger rand.
Excluding special items, earnings per share held steady at 11 US cents in the three months to June, from a year-earlier period, the company said in a statement on Thursday.
CEO Steve Binnie said in a statement that the period under review was seasonally and historically its weakest quarter due to the slowdown in business activity during the northern hemisphere summer holiday period.
Higher raw material prices and a stronger rand also offset higher volumes, leaving operating profit excluding special items down to $93m for the quarter, from $97m in the matching period in 2016.
But the company was able to reduce net debt 17% to $1.31bn and repaid $400m in bonds from cash reserves, which it said would generate savings of about $21m per year on net interest charge.© BusinessLIVE MMXVII
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