| Wed 9 Feb 2011, 9:00 | | SAP - Sappi Limited - 1st Quarter results for the period ended December 2010 |
|
SAP
SAVVI
SAP - Sappi Limited - 1st Quarter results for the period ended December 2010
Sappi Limited
(Registration number 1936/008963/06)
Issuer Code: SAVVI
JSE Code: SAP
ISIN: ZAE000006284
1st Quarter results for the period ended December 2010
Financial summary for the quarter
- EPS 7 US cents; Q1 2010 loss per share 10 US cents
- Operating profit US$137 million (excluding special items);
Q1 2010 US$81 million (excluding special items)
- Improved demand and pricing for the majority of our products
Quarter ended
Dec 2010 Dec 2009 Sept 2010
Key figures: (US$ million)
Sales 1,873 1,620 1,774
Operating profit 121 1 158
Special items - losses (gains) 1 16 80 (29)
Operating profit excluding special items 2 137 81 129
EBITDA excluding special items 3 246 193 227
Basic earnings (loss) per share (US cents) 7 (10) 16
Net debt 4 2,432 2,581 2,221
Key ratios: (%)
Operating profit to sales 6.5 0.1 8.9
Operating profit excluding special items
to sales 7.3 5.0 7.3
Operating profit excluding special items to
capital employed (ROCE) 12.8 7.5 12.6
EBITDA excluding special items to sales 13.1 11.9 12.8
Return on average equity (ROE) 5 7.6 (11.6) 18.6
Net debt to total capitalisation 5 54.7 60.0 53.9
1. Refer to note 9 to the group results for details on special items.
2. Refer to note 9 to the group results for the reconciliation of operating
profit excluding special items to operating profit.
3. Refer to note 9 to the group results for the reconciliation of EBITDA
excluding special items to profit (loss) before taxation.
4. Refer to Supplemental information for the reconciliation of net debt to
interest-bearing borrowings.
5. Refer to Supplemental information for the definition of the term.
The table above has not been audited or reviewed.
Commentary on the quarter
The trend of improving performance continued in the quarter. Operating profit
improved further as a result of the inclusion of an additional accounting week
in the quarter, which occurs every six years in the group`s accounting
calendar. The group achieved an annualised return on capital employed (ROCE)
of 12.8% for the quarter, which was an improvement on the quarter ended
September 2010 and ahead of our target minimum of 12%.
Demand for our products remained good and prices increased gradually. Pulp
prices remained high, benefiting our Southern African and North American
businesses, which performed strongly. Our North American business had a
planned outage for an upgrade of the pulp mill at Somerset mill commencing in
October 2010 which reduced output and profitability in the quarter. The
European business generated modest margins and continued to experience
significant pressure as a result of high pulp input costs and price increases
for other raw materials.
Sales increased to US$1.9 billion, up 16% compared to the equivalent quarter
last year as a result of improved sales volumes and prices.
Average prices realised by the group were up 7.7% on the equivalent quarter
last year in US Dollar terms. In local currency, average prices increased by
11.6% in Europe, 5.6% in North America and 17.7% in Southern Africa.
Raw material input costs were approximately US$100 million higher than a year
ago as a result of the high pulp prices and a gradual increase in chemical and
energy costs.
Special items for the quarter amounted to a charge of US$16 million mainly in
respect of the plantation fair value adjustment.
Operating profit excluding special items was US$137 million for the quarter
compared to US$81 million in the equivalent quarter last year. Including
special items, operating profit was US$121 million compared to US$1 million in
the equivalent quarter last year.
Earnings per share for the quarter was 7 US cents (which included a charge of
3 US cents of special items) compared to a loss of 10 US cents per share
(which included a charge of 11 US cents of special items) in the equivalent
quarter last year.
Cash flow and debt
Net cash utilised for the quarter was US$196 million. We expect positive cash
generation for the rest of our financial year and good net cash generation for
the full year.
Cash generated from operations was US$245 million for the quarter; however,
partly for seasonal and accounting calendar reasons, our working capital
increased by US$335 million during the quarter, much of which will be reversed
during the balance of the financial year.
Capital expenditure for the quarter was US$45 million. Our target for the year
is a modest increase on the US$188 million capital spent last year in order to
ensure the continued sustainability of our business.
At quarter-end we had cash on hand of US$591 million and access to additional
liquidity in the form of a EUR209 million (US$280 million) committed revolving
credit facility, which remains undrawn.
Net debt increased to US$2.4 billion as a result of the cash utilisation in
the quarter. We are committed to prudent cash flow management and the
continued reduction of finance costs.
Operating Review - Quarter ended December 2010 compared
with quarter ended December 2009
Sappi Fine Paper
Quarter Quarter Quarter
ended ended ended
Dec 2010 Dec 2009 % Sept 2010
US$ million US$ million change US$ million
Sales 1,409 1,256 12 1,327
Operating profit 57 79 (28) 87
Operating profit to sales (%) 4.0 6.3 - 6.6
Special items (gains) - (35) - (11)
Operating profit excluding
special items 57 44 30 76
Operating profit excluding
special items to sales (%) 4.0 3.5 - 5.7
EBITDA excluding special items 137 130 5 151
EBITDA excluding special items
to sales (%) 9.7 10.4 - 11.4
RONOA pa (%) 7.3 5.3 - 10.0
The fine paper business` operating profit (excluding special items) improved
30% compared to the equivalent quarter last year. The performance of both the
European and North American businesses improved compared to last year. In
North America, the operating profit was unfavourably impacted by the planned
outage at Somerset Mill during the upgrade of the chemical recovery complex,
resulting in a reduction in margins compared to the quarter ended September
2010.
Europe
Quarter Quarter
ended ended %
Dec 2010 Dec 2009 change
US$ million US$ million (US$)
Sales 1,027 936 10
Operating profit 34 12 183
Operating profit to sales (%) 3.3 1.3 -
Special items - losses (gains) - 13 -
Operating profit excluding special items 34 25 36
Operating profit excluding special
items to sales (%) 3.3 2.7 -
EBITDA excluding special items 95 88 8
EBITDA excluding special items to sales (%) 9.3 9.4 -
RONOA pa (%) 6.2 4.3 -
Quarter
% ended
change Sept 2010
(Euro) US$ million
Sales 20 963
Operating profit 213 40
Operating profit to sales (%) - 4.2
Special items - losses (gains) - (6)
Operating profit excluding special items 47 34
Operating profit excluding special items to sales (%) - 3.5
EBITDA excluding special items 17 90
EBITDA excluding special items to sales (%) - 9.3
RONOA pa (%) - 6.5
Compared to a year earlier, the business has achieved a significant
improvement in sales volumes and average prices. However, as a result of input
cost pressure particularly of purchased pulp, the business` operating margins
remain below expectations.
Demand for coated paper has remained generally robust and the third coated
woodfree price increase of 2010, effective September 2010, was implemented
during the quarter. A further price increase for both coated woodfree and
uncoated woodfree paper has been announced for March 2011. Prices for coated
mechanical paper remained depressed during the quarter, resulting in negative
margins for this category. Price increases for coated mechanical paper have
been implemented in January 2011.
Our average prices realised in Europe in Euro terms were approximately 12%
above the equivalent quarter last year and similar to those realised in the
September 2010 quarter.
North America
Quarter Quarter Quarter
ended ended ended
Dec 2010 Dec 2009 % Sept 2010
US$ million US$ million change US$ million
Sales 382 320 19 364
Operating profit 23 67 (66) 47
Operating profit to sales (%) 6.0 20.9 - 12.9
Special items - (gains) - (48) - (5)
Operating profit excluding
special items 23 19 21 42
Operating profit excluding
special Items to sales (%) 6.0 5.9 - 11.5
EBITDA excluding special items 42 42 - 61
EBITDA excluding special
items to sales (%) 11.0 13.1 - 16.8
RONOA pa (%) 9.9 7.8 - 17.8
Despite the planned outage of the Somerset Mill pulp mill, which dampened the
strong underlying performance during the quarter, the North American business`
operating profit (excluding special items) was up 21% compared to the
equivalent quarter last year. The upgraded chemical recovery complex is now
fully operational and delivering the expected reduction in energy costs and
increase in pulp production capacity.
Demand for our coated fine paper was firm and our mills were sold out during
the quarter. Our average price achieved for coated paper improved compared to
both the equivalent quarter last year and the quarter ended September 2010.
Pulp demand and pricing remained high. Pulp production, however, was lower
during the quarter as a result of the pulp mill outage. Our speciality
business also performed strongly during the quarter, with price increases in
key segments.
Sappi Southern Africa
Quarter Quarter
ended ended %
Dec 2010 Dec 2009 change
US$ million US$ million (US$)
Sales 464 364 27
Operating profit (loss) 66 (86) -
Operating profit (loss) to sales (%) 14.2 (23.6) -
Special items - losses (gains) 13 115 (89)
Operating profit excluding special items 79 29 172
Operating profit excluding special
items to sales (%) 17.0 8.0 -
EBITDA excluding special items 108 55 96
EBITDA excluding special items to sales (%) 23.3 15.1 -
RONOA pa (%) 15.8 6.3 -
Quarter
% ended
change Sept 2010
(Rand) US$ million
Sales 18 447
Operating profit (loss) - 84
Operating profit (loss) to sales (%) - 18.8
Special items - losses (gains) (90) (26)
Operating profit excluding special items 151 58
Operating profit excluding special items to sales (%) - 13.0
EBITDA excluding special items 82 82
EBITDA excluding special items to sales (%) - 18.3
RONOA pa (%) - 12.6
The performance of the Southern African business improved further during the
quarter.
The chemical cellulose business achieved improved sales volumes and prices.
Demand for this business remains strong, driven by demand for viscose fibres,
particularly in Asia. The Saiccor mill`s post expansion output and efficiency
continued to improve.
Our paper and packaging business had improved demand for containerboard,
sackkraft and newsprint, but weaker demand for fine paper. Competition from
low-priced imports has continued as a result of the strength of the Rand
relative to the US Dollar, which squeezed margins in the paper and packaging
business.
Outlook
We are pleased with the improving trend in the group`s financial performance.
We expect demand for coated paper to remain reasonably firm in our major
markets. Prices for coated mechanical paper in Europe increased in January
2011, which we expect to help restore this product category to profitability.
Our raw material input costs are gradually increasing as commodity prices
rise. We continue to focus on more efficient procurement and use of our
inputs.
Our chemical cellulose business is performing strongly and we intend to
accelerate our plans for expanding this business through investment in
additional capacity.
Although our net debt increased in the quarter as a result of working capital
growth, we intend to continue to reduce net debt this year. We also aim to
reduce finance costs by, from time to time, applying a portion of our cash on
hand to further debt repayment. We have today announced a tender offer to
repurchase up to US$150 million of our senior notes, which mature in June
2012. This transaction will allow us to use a portion of our available cash on
hand more efficiently and to repurchase a portion of such notes well ahead of
their maturity.
In our second financial quarter we expect the group`s operating profit
(excluding special items) to continue the improving trend relative to the
equivalent quarter last year, but to below that of the first financial
quarter.
On behalf of the board
R J Boettger M R Thompson
Director Director 09 February 2011
forward-looking statements
Certain statements in this report that are neither reported financial results
nor 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.
The words `believe`, `anticipate`, expect`, `intend`, `estimate`, `plan`,
`assume`, `positioned`, `will`, `may`, `should`, `risk` and other similar
expressions, which are predictions of or indicate future events and future
trends, which do not relate to historical matters, identify forward-looking
statements.
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 highly cyclical nature of the pulp and paper industry (and the factors
that can contribute to such cyclicality, such as levels of demand, production
capacity, production, input costs including raw material, energy and employee
costs and pricing);
the impact on our business of the global economic downturn;
unanticipated production disruptions (including as a result of planned or
unexpected power outages);
changes in environmental, tax and other laws and regulations;
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;
adverse changes in the political situation and economy in the countries in
which we operate or the effect of government 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 in
connection with dispositions or integrating acquisitions and achieving
expected savings and synergies; and
currency fluctuations.
We undertake 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.
Group income statement
Quarter Quarter
ended ended
Dec 2010 Dec 2009
Notes US$ million US$ million
Sales 1,873 1,620
Cost of sales 1,637 1,531
Gross profit 236 89
Selling, general and administrative expenses 112 107
Other operating expenses (income) 5 (16)
Share of profit from associates and
joint ventures (2) (3)
Operating profit 2 121 1
Net finance costs 71 73
Net interest 78 79
Net foreign exchange gains (4) (3)
Net fair value gains on financial instruments (3) (3)
Profit (loss) before taxation 50 (72)
Taxation 13 (21)
Current 2 4
Deferred 11 (25)
Profit (loss) for the period 37 (51)
Basic earnings (loss) per share (US cents) 7 (10)
Weighted average number of shares in issue (millions) 519.5 515.6
Diluted basic earnings (loss) per share (US cents) 7 (10)
Weighted average number of shares on
fully diluted basis (millions) 524.5 515.6
Group statement of comprehensive income
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
Profit (loss) for the period 37 (51)
Other comprehensive income (loss), net of tax 78 (24)
Exchange differences on translation of foreign operations 82 (25)
Movements in hedging reserves (3) 1
Deferred tax effects on above (1) -
Total comprehensive income (loss) for the period 115 (75)
Group balance sheet
Reviewed
Dec 2010 Sept 2010
US$ million US$ million
ASSETS
Non-current assets 4,689 4,653
Property, plant and equipment 3,656 3,660
Plantations 717 687
Deferred taxation 52 53
Other non-current assets 264 253
Current assets 2,388 2,531
Inventories 890 836
Trade and other receivables 907 903
Cash and cash equivalents 591 792
Total assets 7,077 7,184
EQUITY AND LIABILITIES
Shareholders` equity
Ordinary shareholders` interest 2,016 1,896
Non-current liabilities 3,089 3,249
Interest-bearing borrowings 2,120 2,317
Deferred taxation 417 386
Other non-current liabilities 552 546
Current liabilities 1,972 2,039
Interest-bearing borrowings 899 691
Bank overdraft 4 5
Other current liabilities 1,030 1,307
Taxation payable 39 36
Total equity and liabilities 7,077 7,184
Number of shares in issue at balance sheet date
(millions) 519.8 519.5
Group cash flow statement
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
Profit (loss) for the period 37 (51)
Adjustment for:
Depreciation, fellings and amortisation 131 132
Taxation 13 (21)
Net finance costs 71 73
Post-employment benefits (14) (13)
Plantation price fair value adjustment 11 95
Other non-cash items (4) 30
Cash generated from operations 245 245
Movement in working capital (335) (170)
Net finance costs (63) (64)
Taxation paid (2) (4)
Cash (utilised in) retained from operating activities (155) 7
Cash utilised in investing activities (41) (37)
Net cash utilised (196) (30)
Cash effects of financing activities (15) 57
Net movement in cash and cash equivalents (211) 27
Group statement of changes in equity
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
Balance - beginning of period 1,896 1,794
Total comprehensive income (loss) for the period 115 (75)
Transfers from the share purchase trust 2 -
Share-based payment reserve 3 2
Balance - end of period 2,016 1,721
Notes to the group results
1. Basis of preparation
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board, the AC 500 standards issued by the Accounting
Practices Board and the information required by IAS 34 "Interim Financial
Reporting". The report has been prepared using accounting policies that comply
with IFRS which are consistent with those applied in the financial statements
for the year ended September 2010.
The results are unaudited.
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
2. Operating profit
Included in operating profit are the following
non-cash items:
Depreciation and amortisation 109 112
Fair value adjustment on plantations (included in
cost of sales)
Changes in volume
Fellings 22 20
Growth (21) (19)
1 1
Plantation price fair value adjustment 11 95
12 96
Included in other operating expenses (income) are
the following:
Asset impairment reversals - (8)
Loss on disposal of property, plant and equipment - 2
Restructuring provisions raised 3 38
Black Economic Empowerment charge 1 -
Fuel tax credit - (49)
3. Headline earnings (loss) per share *
Headline earnings (loss) per share (US cents) 7 (11)
Weighted average number of shares in issue (millions) 519.5 515.6
Diluted headline earnings (loss) per share (US cents) 7 (11)
Weighted average number of shares on fully diluted
basis (millions) 524.5 515.6
Calculation of headline earnings (loss) *
Profit (loss) for the period 37 (51)
Asset impairment reversals - (8)
Loss on disposal of property, plant and equipment - 2
Tax effect of above items - -
Headline earnings (loss) 37 (57)
*Headline earnings disclosure is required by the JSE Limited.
4. Capital expenditure
Property, plant and equipment 45 37
Dec 2010 Sept 2010
US$ million US$ million
5. Capital commitments
Contracted 69 62
Approved but not contracted 175 109
244 171
6. Contingent liabilities
Guarantees and suretyships 52 48
Other contingent liabilities 8 8
60 56
7. Material balance sheet movements
Cash and cash equivalents and other current liabilities
The decrease in cash and cash equivalents and in other current liabilities is
largely due to the timing of creditor payments as a result of the calendar
month-end falling before the fiscal month-end when creditor payments fell due.
Interest-bearing borrowings
An amount of US$213 million was transferred from non-current interest-bearing
liabilities to current interest-bearing liabilities due to the maturity
profile of two loans falling due in the next twelve months.
8. Post balance sheet events
A tender offer to repurchase up to US$150 million of our senior notes, which
mature in June 2012 was announced on 9 February 2011.
9. Segment information
The information below is presented in the way that it is reviewed by the chief
operating decision maker as required by IFRS 8 "Operating Segments".
Quarter Quarter
ended ended
Dec 2010 Dec 2009
Metric tons Metric tons
(000`s) (000`s)
Sales volume
Fine Paper - North America 364 322
Europe 1,012 944
Total 1,376 1,266
Southern Africa - Pulp and paper 452 450
Forestry 194 168
Total 2,022 1,884
US$ million US$ million
Sales
Fine Paper - North America 382 320
Europe 1,027 936
Total 1,409 1,256
Southern Africa - Pulp and paper 447 350
Forestry 17 14
Total 1,873 1,620
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
Operating profit excluding special items
Fine Paper - North America 23 19
Europe 34 25
Total 57 44
Southern Africa 79 29
Unallocated and eliminations 1 1 8
Total 137 81
Special items - losses (gains)
Fine Paper - North America - (48)
Europe - 13
Total - (35)
Southern Africa 13 115
Unallocated and eliminations 1 3 -
Total 16 80
Segment operating profit (loss)
Fine Paper - North America 23 67
Europe 34 12
Total 57 79
Southern Africa 66 (86)
Unallocated and eliminations 1 (2) 8
Total 121 1
EBITDA excluding special items
Fine Paper - North America 42 42
Europe 95 88
Total 137 130
Southern Africa 108 55
Unallocated and eliminations 1 1 8
Total 246 193
Segment assets
Fine Paper - North America 924 980
Europe 2,255 2,364
Total 3,179 3,344
Southern Africa 2,121 1,770
Unallocated and eliminations 1 65 15
Total 5,365 5,129
1 Includes the group`s treasury operations, the self-insurance captive and the
investment in the Jiangxi Chenming joint venture.
Reconciliation of operating profit excluding special items to operating profit
Special items cover those items which management believe are material by
nature or amount to the operating results and require separate disclosure.
Such items would generally include profit or loss on disposal of property,
investments and businesses, asset impairments, restructuring charges, non-
recurring integration costs related to acquisitions, financial impacts of
natural disasters, non-cash gains or losses on the price fair value adjustment
of plantations and alternative fuel tax credits receivable in cash.
Quarter Quarter
ended ended
Dec 2010 Dec 2009
US$ million US$ million
Operating profit excluding special items 137 81
Special items (16) (80)
Plantation price fair value adjustment (11) (95)
Restructuring provisions raised (3) (38)
Loss on disposal of property, plant and equipment - (2)
Asset impairment reversals - 8
Fuel tax credit - 49
Black Economic Empowerment charge (1) -
Fire, flood, storm and related events (1) (2)
Operating profit 121 1
Reconciliation of EBITDA excluding special items and operating profit
excluding special items to profit (loss) before taxation
EBITDA excluding special items 246 193
Depreciation and amortisation (109) (112)
Operating profit excluding special items 137 81
Special items - losses (16) (80)
Net finance costs (71) (73)
Profit (loss) before taxation 50 (72)
Reconciliation of segment assets to total assets
Segment assets 5,365 5,129
Deferred tax 52 56
Cash and cash equivalents 591 786
Other current liabilities 1,030 1,092
Taxation payable 39 54
Liabilities associated with assets held for sale - 28
Total assets 7,077 7,145
Supplemental information (this information has not been audited or reviewed)
General definitions
Average - averages are calculated as the sum of the opening and closing
balances for the relevant period divided by two
Black Economic Empowerment - as envisaged in the Black Economic Empowerment
(BEE) legislation in South Africa
Black Economic Empowerment charge - represents the IFRS 2 non-cash charge
associated with the BEE transaction implemented in fiscal 2010
Fellings - the amount charged against the income statement representing the
standing value of the plantations harvested
NBSK - Northern Bleached Softwood Kraft pulp. One of the main varieties of
market pulp, produced from coniferous trees (ie spruce, pine) in Scandinavia,
Canada and northern USA. The price of NBSK is a benchmark widely used in the
pulp and paper industry for comparative purposes
SG&A - selling, general and administrative expenses
Non-GAAP measures
The group believes that it is useful to report certain non-GAAP measures for
the following reasons:
- these measures are used by the group for internal performance analysis;
- the presentation by the group`s reported business segments of these measures
facilitates comparability with other companies in our industry, although the
group`s measures may not be comparable with similarly titled profit
measurements reported by other companies; and
- it is useful in connection with discussion with the investment analyst
community and debt rating agencies.
These non-GAAP measures should not be considered in isolation or construed as
a substitute for GAAP measures in accordance with IFRS
Capital employed - shareholders` equity plus net debt
EBITDA excluding special items - earnings before interest (net finance costs),
taxation, depreciation, amortisation and special items
Headline earnings - as defined in circular 3/2009 issued by the South African
Institute of Chartered Accountants, separates from earnings all separately
identifiable re-measurements. It is not necessarily a measure of sustainable
earnings. It is a Listings Requirement of the JSE Limited to disclose headline
earnings per share
Net assets - total assets less total liabilities
Net asset value per share - net assets divided by the number of shares in
issue at balance sheet date
Net debt - current and non-current interest-bearing borrowings, and bank
overdraft (net of cash, cash equivalents and short-term deposits)
Net debt to total capitalisation - net debt divided by capital employed
Net operating assets - total assets (excluding deferred taxation and cash)
less current liabilities (excluding interest-bearing borrowings and
overdraft). Net operating assets is considered to equal segment assets
ROCE - return on average capital employed. Operating profit excluding special
items divided by average capital employed
ROE - return on average equity. Profit for the period divided by average
shareholders` equity
RONOA - return on average net operating assets. Operating profit excluding
special items divided by average segment assets
Special items - special items cover those items which management believe are
material by nature or amount to the operating results and require separate
disclosure. Such items would generally include profit or loss on disposal of
property, investments and businesses, asset impairments, restructuring
charges, non-recurring integration costs related to acquisitions, financial
impacts of natural disasters, non-cash gains or losses on the price fair value
adjustment of plantations and alternative fuel tax credits receivable in cash
The above financial measures are presented to assist our shareholders and the
investment community in interpreting our financial results.
These financial measures are regularly used and compared between companies in
our industry.
Supplemental information (this information has not been audited or reviewed)
Summary Rand convenience translation
Quarter Quarter
ended ended
Dec 2010 Dec 2009
Key figures: (ZAR million)
Sales 13,011 12,151
Operating profit 841 8
Special items - losses * 111 600
Operating profit excluding special items * 952 608
EBITDA excluding special items * 1,709 1,448
Basic earnings (loss) per share (SA cents) 49 (75)
Net debt * 16,097 19,439
Key ratios: (%)
Operating profit to sales 6.5 0.1
Operating profit excluding special items to sales 7.3 5.0
Operating profit excluding special items to
capital employed (ROCE) * 13.1 7.5
EBITDA excluding special items to sales 13.1 11.9
Return on average equity (ROE) 7.7 (11.7)
Net debt to total capitalisation * 54.7 60.0
*Refer to Supplemental information for the definition of the term.
The above financial results have been translated into Rands from US Dollars as
follows:
- Assets and liabilities at rates of exchange ruling at period end; and
- Income, expenditure and cash flow items at average exchange rates.
Reconciliation of net debt to interest-bearing borrowings
Dec 2010 Sept 2010
US$ million US$ million
Interest-bearing borrowings 3,023 3,013
Non-current interest-bearing borrowings 2,120 2,317
Current interest-bearing borrowings 899 691
Bank overdraft 4 5
Cash and cash equivalents (591) (792)
Net debt 2,432 2,221
Exchange rates
Dec Sept Jun
2010 2010 2010
Exchange rates:
Period end rate: US$1 = ZAR 6.6190 7.0190 7.6250
Average rate for the Quarter: US$1 = ZAR 6.9464 7.3517 7.5821
Average rate for the YTD: US$1 = ZAR 6.9464 7.4917 7.5610
Period end rate: EUR 1 = US$ 1.3380 1.3491 1.2377
Average rate for the Quarter: EUR 1 = US$ 1.3516 1.2871 1.2937
Average rate for the YTD: EUR 1 = US$ 1.3516 1.3658 1.3845
Mar Dec
2010 2009
Exchange rates:
Period end rate: US$1 = ZAR 7.4298 7.5315
Average rate for the Quarter: US$1 = ZAR 7.5597 7.5009
Average rate for the YTD: US$1 = ZAR 7.5302 7.5009
Period end rate: EUR 1 = US$ 1.3413 1.4397
Average rate for the Quarter: EUR 1 = US$ 1.3891 1.4737
Average rate for the YTD: EUR 1 = US$ 1.4302 1.4737
The financial results of entities with reporting currencies other than the US
Dollar are translated into US Dollars as follows:
- Assets and liabilities at rates of exchange ruling at period end; and
- Income, expenditure and cash flow items at average exchange rates.
SEE PRESS FOR GRAPHS
Other interested parties can obtain printed copies of this report from:
South Africa: United States:
Computershare Investor ADR Depositary:
Services (Proprietary) Limited The Bank of New York Mellon
70 Marshall Street Investor Relations
Johannesburg 2001 PO Box 11258
PO Box 61051 Church Street Station
Marshalltown 2107 New York, NY 10286-1258
Tel +27 (0)11 370 5000 Tel +1 610 382 7836
Sappi has a primary listing on the JSE Limited and a secondary listing on the
New York Stock Exchange
this report is available on the Sappi website
www.sappi.com
Date: 09/02/2011 09:00:01 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.
