Picture: Reuters.

Johannesburg - Sappi, the world’s biggest maker of glossy paper, said fiscal first-quarter profit fell 62 percent because of lower paper and pulp prices.

Net income declined to $17 million, or 3 cents a share, in the three months through December compared with $45 million, or 9 cents, a year earlier, the Johannesburg-based company said in a statement today.

“The pulp business continued to be negatively impacted by pulp prices that are 5 percent lower than the equivalent quarter last year, and 3 percent lower than the prior quarter,” the company said.

Sappi, also the largest producer of dissolving wood pulp, is betting on the product to increase profit and allow it to resume dividend payments. The company stopped dividend payouts in 2008 as it struggled with a high debt burden and decreasing paper sales in its major market, Europe.

Sappi returned to profitability in the year through September and set a target to cut borrowings by $300 million a year to a ratio of twice earnings before interest, taxes, depreciation and amortization by the end of fiscal 2013, Chief Executive Officer Ralph Boettger said in a November 29 interview. - Bloomberg