Sappi Limited
Share code : SAP
ISIN :
ZAE000006284
Johannesburg
Press Release
25 February 2002
SAPPI EXPECTS MARKETS TO IMPROVE SLOWLY IN SECOND HALF
Sappi announced at its AGM today (25 February 2002) that it expects to
return its North American business to profitability in the second half of
the year and that, provided the world economy does not deteriorate from its
current projections, it still expects quarterly earnings per share for the
rest of the year to improve to levels similar to those of the fourth quarter
2001.
"The state of the North American coated paper market is our biggest
challenge as it is severely pressured by imported product at low prices.
Our own imports there are also rising significantly," said Sappi Chairman
Eugene van As. "Retail spending in the USA is increasing and the economy
should start to recover soon. We are therefore confident of returning this
business to profitability."
The new Chief Executive in North America, Kathleen Walters, has now joined
the group and Monte Haymon, the retiring chief executive, is working with
her to effect a smooth transition of leadership.
Consumer inventories of coated woodfree paper in all markets have been
sharply reduced over the last eighteen months, resulting in shipments from
producing mills being much lower than end user consumption. Sappi expects
shipments to rise in the short term to match consumption, increasing
substantially once the world economies turn, advertising spend begins to
recover and end users of coated paper start normalising their inventories.
Van As concluded by saying that: "We continue to focus on improving the
fundamentals of our business within the constraints of the current market
excess capacity. Growing our market share has been limited in the past year
due to the extent of the downtime we have taken, but our geographic spread
has minimised the impact of weaker regional markets and currency volatility
on our total business. We will continue to control our costs and focus on
the opportunities to grow our market share when the market changes."
ENDS
For further information:
Andre F Oberholzer
Corporate Affairs and Communication Manager
Sappi Limited
Tel +27 (0) 11 407 8044
Fax +27 (0) 11 403 8236
Andre.oberholzer@za.sappi.com
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