Paper and packaging company Sappi (SAP) was trading 3.27% firmer at R25.58 at 11.27am on Thursday after the company said it returned to profitability in the fourth quarter ended September compared with the same quarter last year due to a solid performance from its cellulose operations.
The counter reached an all-time high of R162.00 in March 2002.
However this does not necessarily mean that SA’s paper manufacturers are finally on the road to recovery‚ a local analyst said.
“Sappi just had a more normal quarter without internal disruption such as shutdowns. The company is repositioning itself for profitability‚” he said.
“Sappi is just confirming what Mondi said last week in its interim management statement with Mondi not seeing much recovery in the sector until 2014‚” he added.
Sappi and Mondi (MND) are rivals and Mondi was trading 0.38% up at R91.58 on Thursday at 11.30am.
Sappi delivered a net profit of US$107m compared with a loss of US$127m in the last comparable quarter. Earnings per share climbed to 21c after a loss per share of 24c previously.
“Pulp prices‚ despite having recovered from their recent lows‚ are expected to remain lower on average in 2013 than they were in 2012‚” CEO Ralph Boettger said. - I-Net Bridge