Photo: File Sappi, on Thursday managed to post improved results where profits were up by 81.25 percent to $58m (R771.40m), up from $32m.

JOHANNESBURG - “I am pleased to report that during the past quarter Sappi delivered profits up 81 percent from a year ago, reduced debt by a further 17 percent ($265m) year-on-year. We also repaid $400m in bonds from cash reserves which will generate savings of approximately US$21 million per annum on our net interest charge,” Chief executive Steve Binnie said. 

Sappi’s net debt now stands at $1.32bn. 

The group said the European business benefited from good demand for most products and price increases for coated woodfree paper while coated paper selling prices remained below a year ago. This, combined with the higher raw material costs, led to a small reduction in profitability. However, speciality packaging business continued to achieve strong sales growth and profit margins.

Sappi is forecasting a lower operating performance in the fourth quarter as result of higher prices for raw materials and a stronger rand.