Johannesburg - Sappi pointed to lowered costs and enhanced competitiveness in the graphic paper segment as it reported a 91 percent in net profit to $319 million for the year ended in September, compared to $167 million last year.
Sappi - the world's largest producer of dissolving wood pulp - said it implemented various projects which lowered its cost position and enhanced its competitiveness in the graphic paper segment.
The group's earnings before interest, tax, depreciation and amortisation (EBITDA) excluding special items for the year was $739 million, an increase of $114 million or 18 percent on the prior year.
Sappi also managed to reduce its net debt by 20 percent, or $363 million year-on-year, to $1.4 billion.
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Sappi CEO Steve Binnie said the paper maker had delivered another strong performance to build on the momentum created in 2014 and 2015.
“The success of our strategy is evident in our strong cash generation which has allowed us to reduce our debt levels to below our stated target and to do this earlier than anticipated,” Binnie said.
“I am delighted that our robust performance has allowed us to declare a dividend for the first time since 2008. The 2016 dividend was covered five times by basic earnings per share.
The group aims to declare ongoing annual dividends, and over time achieve a long-term average earnings to dividend ratio of three to one.” Earnings per share for the year increased by some 68 percent to 57 US cents. A dividend of 11 US cents was declared.
Binnie said the demand for dissolving wood pulp would remain favourable towards the next quarter.
AFRICAN NEWS AGENCY
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