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1st quarter results

Sappi is a global diversified woodfibre company focused on providing dissolving wood pulp, specialities and packaging papers, printing and writing papers as well as products in adjacent fields including nanocellulose and lignosulphonate to our direct and indirect customer base across more than 150 countries.

Q1 2018
Financial results
conference call

Our dissolving wood pulp (specialised cellulose) products are used worldwide by converters to create viscose fibre for fashionable clothing and textiles, pharmaceutical products as well as a wide range of consumer and household products; quality specialities and packaging papers are used in the manufacture of such products as soup sachets, luxury carry bags, cosmetic and confectionery packaging, boxes for agricultural products for export, tissue wadding for household tissue products and casting release papers used by suppliers to the fashion, textiles, automobile and household industries; our market-leading range of printing and writing papers are used by printers in the production of books, brochures, magazines, catalogues, direct mail and many other print applications.

The wood and pulp needed for our products is either produced within Sappi or bought from accredited suppliers. Across the group, Sappi is close to ‘pulp neutral’, meaning that we sell almost as much pulp as we buy.

Sales by source*

Sales by product*

Sales by destination*

Net operating assets**

* For the period ended December 2017
** As at December 2017

Highlights for the quarter

EBITDA excluding special items
US$172 million
(Q1 2017 like-for-like US$181 million)

Profit for the period
US$63 million
(Q1 2017 US$90 million)

EPS excluding special items
14 US cents
(Q1 2017 16 US cents

Net debt
US$1,349 million
(Q1 2017 US$1,338 million)

Financial highlights

      Quarter ended  
      Dec 2017   Dec 2016   Sep 2017  
Key figures: (US$ million)                
Sales     1,330   1,309   1,411  
Operating profit excluding special items(1)     105   136   152  
Special items – (gains) losses(2)     (11)   (7)   1  
EBITDA excluding special items(1)     172   201   221  
Profit for the period     63   90   102  
Basic earnings per share (US cents)     12   17   19  
EPS excluding special items (US cents)(3)     14   16   19  
Net debt(3)     1,349   1,338   1,322  
Key ratios: (%)                
Operating profit excluding special items to sales     7.9   10.4   10.8  
Operating profit excluding special items to capital employed (ROCE)(3)     14.1   19.5   20.2  
EBITDA excluding special items to sales     12.9   15.4   15.7  
Net debt to EBITDA excluding special items     1.8   1.7   1.7  
Interest cover(3)     9.9   7.7   9.1  
Net asset value per share (US cents)(3)     338   270   327  
(1) Refer to note 2 to the group results for the reconciliation of EBITDA excluding special items and operating profit excluding special items to segment operating profit, and profit for the period.
(2) Refer to note 2 to the group results for details on special items.
(3) Refer to supplemental information for the definition of the term.


Operating performance in the quarter was in line with expectations and the group generated EBITDA excluding special items of US$172 million. On a like-for-like basis this is comparable to the US$181 million generated last year before the addition of US$20 million related to an additional accounting week. Profit for the comparative period decreased from US$90 million to US$63 million principally as a result of the extra week last year and a US$19 million non-cash income statement charge following the lowering of the corporate income tax rate in the United States and its impact on the deferred tax asset.

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