| Mon 20 Jul 2009, 8:26 | | SAP - Sappi - Trading Update In Respect Of Debt Refinancing And Bond Issue |
|
SAP
SAVVI
SAP - Sappi - Trading Update In Respect Of Debt Refinancing And Bond Issue
Sappi Limited
(Incorporated in the Republic of South Africa)
Registration number: 1936/008963/06
JSE share code: SAP
ISIN code: ZAE000006284
("Sappi" or "the company")
This notice does not constitute an offer to sell or the solicitation of an offer
to buy securities
20 July 2009
TRADING UPDATE IN RESPECT OF DEBT REFINANCING AND BOND ISSUE
Sappi is issuing this trading update in connection with the capital markets
transaction that it announced today and the ongoing syndication of a new secured
revolving credit facility and a new secured OeKB term loan facility.
Market conditions remained weak in the quarter in all our major markets. Sales
volumes for the group were similar to the prior quarter. Prices realised were
under pressure in most regions.
For the quarter ended June 2009 we expect to report improved operating results,
excluding special items, compared to the quarter ended March 2009 for our
European business, which we expect to return to profitability and for our North
American business, as a result of synergy achievements in Europe, and cost and
input price reductions. In addition the North American business expects to
report the benefit of alternative fuel credits in the range of US$30 - US$40
million.
Our Southern African business was impacted by the strengthening of the Rand
relative to the US Dollar, weak domestic demand and low pulp prices, which we
expect will result in a loss before special items for the quarter for the
region.
For the group, operating loss excluding special items for the quarter is
expected to be largely in line with the quarter ended March 2009.
The group continues to prioritise cash generation and expects to report a
positive net cash generation for the quarter.
Financial statements for the quarter ended June 2009 are not yet finalised. The
information above is based on certain preliminary financial data. This
information is subject to change as final financial data becomes available, and
our financial statements are prepared and reviewed by us and our auditors.
Outlook
Demand and prices for chemical cellulose have strengthened and the Saiccor mill
has a strong order book. The mill is progressing well with the ramp up of
production and expects to improve sales volumes in the next quarter. Global
markets for coated paper remain depressed; however, we expect stronger seasonal
demand during the next quarter for web products and stable demand for sheet
products. The extent of inventory reduction in our customer supply chain
appears to be reducing and we therefore expect an improvement in coated paper
demand on paper producers. We expect alternative fuel credits of approximately
US$40 million in the next quarter.
We expect to generate positive net cash flow in the quarter ended September
2009.
Forward-looking statements
Certain statements in this release that are neither reported financial results
nor other historical information, are forward-looking statements, including but
not limited to statements that are predictions of or indicate future earnings,
savings, synergies, events, trends, plans or objectives. Undue reliance should
not be placed on such statements because, by their nature, they are subject to
known and unknown risks and uncertainties and can be affected by other factors,
that could cause actual results and company plans and objectives to differ
materially from those expressed or implied in the forward-looking statements (or
from past results). Such risks, uncertainties and factors include, but are not
limited to, the impact of the global economic downturn, the highly cyclical
nature of the pulp and paper industry (and the factors that contribute to such
cyclicality, such as levels of demand, production capacity, production, input
costs including raw material, energy and employee costs, and pricing), adverse
changes in the markets for the group`s products, consequences of substantial
leverage, including as a result of adverse changes in credit markets that affect
our ability to raise capital when needed, changing regulatory requirements,
unanticipated production disruptions, adverse changes in the political situation
and economy in the countries in which we operate or the effect of governmental
efforts to address present or future economic or social problems, the impact of
investments, acquisitions and dispositions (including related financing), any
delays, unexpected costs or other problems experienced with integrating
acquisitions and achieving expected savings and synergies and currency
fluctuations. The company undertakes no obligation to publicly update or revise
any of these forward-looking statements, whether to reflect new information or
future events or circumstances or otherwise.
Contact details
Brunswick South Africa Tel +27 (0) 11 502 7300
Robert Hope
Group Head Strategic Development
Sappi Limited
Tel +27 11 407 8492
e-Mail Robert.Hope@sappi.com
Andre F Oberholzer
Group Head Corporate Affairs
Sappi Limited
Tel +27 11 407 8044
Mobile +27 83 235 2973
e-Mail Andre.Oberholzer@sappi.com
Sponsor: UBS South Africa (Pty) Ltd
Date: 20/07/2009 08:26:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
