Sappi is upbeat regardless of rand
The stronger rand pressured exports, while planned mill shutdowns and conversion to other products will affect volumes
Despite a stronger rand affecting exports, Sappi says its operating performance in the second quarter was ahead of expectations, boding well for ramp-up of production of high-margin dissolving wood pulp by 200,000 tonnes a year to 2020. The stronger rand pressured exports, while planned mill shutdowns and conversion to other products will affect volumes. Demand for dissolving wood pulp remains strong and pricing improved during the period ended March 2018. “The strong rand is still here — [and] that will continue to put pressure on us,” Sappi CEO Steve Binnie said on Monday. “I think the result is excellent under the circumstances,” he said, referring to the company’s exposure to rand volatility. Operating profit in financial 2018 would be the same as in 2017, while 2019 would be better, Binnie said. This comes as group earnings before interest, tax, depreciation and amortisation (ebitda) of $211m, excluding special items, inched up from the same quarter in 2017. Profit for the peri...
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