Sappi Limited - Chairman's Statement At Annual Gen
EXECUTIVE CHAIRMAN, EUGENE VAN AS'STATEMENT AT SAPPI'S 64th ANNUAL GENERAL
MEETING : 1 MARCH 2001
There continues to be some uncertainty in our markets. Pulp prices declined
slightly and paper prices in North America are under pressure after the sharp
decline in demand that the industry experienced in November and December. This
has resulted in continued pressure on our North American business and in Europe
we have taken substantial commercial downtime to ensure that we maintain
appropriate inventories. On the other hand the Forest Products business has
benefited from a reasonably strong domestic economy and the weaker exchange
rate compared to the US dollar. There is a great deal of evidence that the
industry as a whole is managing capacity and inventory better than in the past.
We expect the weakness in the market to continue through the first quarter of
this calendar year, and current indications are that there will be pressure on
our operating income. Reduced finance costs, lower taxation charges in Europe,
and the buy back of some 4% of our shares, which reduces the number of shares
to be serviced, should enable us to produce earnings per share for the year
similar to those of the previous year.
However, as we report in US dollars but more than half of our business is
conducted in other currencies, mainly the Euro, changes in exchange rates could
influence earnings materially.
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