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Sappi Limited - Results for the quarter and half-year ended March 2003
SAPPI LIMITED
(Registration number 1936/008963/06)
JSE Code: SAP
ISIN Code: ZAE 000006284
Results for the quarter and half-year ended March 2003
* EPS up on prior quarter
* Markets remain tough
* Euro strength buffers performance
* Rand strength squeezes SA margins
Summary
Quarter Quarter Quarter Half- Half-
year year
ended ended ended ended ended
March Dec. March March March
2003 2002 2002 2003 2002
Sales (US$ million) 1,095 1,019 871 2,114 1,703
Operating profit 102 92 105 194 170
(US$ million)
EBITDA (US$ million) * 194 190 186 384 334
Operating profit to sales (%) 9.3 9.0 12.1 9.2 10.0
EBITDA * to sales (%) 17.7 18.6 21.4 18.2 19.6
Operating profit to average net 10.3 9.6 15.1 10.0 11.5
assets (RONA) (%) *
Headline EPS (US cents) * 25 23 26 48 40
EPS (US cents) 25 23 25 48 35
Return on average equity (ROE) (%) * 13.0 12.5 17.8 12.8 11.3
Net debt (US$ million) * 1,509 1,525 1,194 1,509 1,194
Net debt to total capitalisation (%) 35.4 36.7 36.6 35.4 36.6
*
* Refer to the supplemental information for the definition of the term herein.
Comment
Global events have led to continued uncertainty in our markets.
Pulp prices increased further in the quarter. NBSK prices increased by more than
25% or approximately US$120 per ton in Europe from January to the end of April.
These increases have been caused at least in part by interrupted wood supply to
some USA mills as a result of poor weather, low inventories and the strong Euro
relative to the US dollar.
Pricing pressure has continued for coated fine paper in our main markets. In
North America uncertainty about demand, a surge of Asian imports and active
discounting by some competitors has resulted in slower than expected
implementation of price increases. Average prices realised for US-produced sheet
products have declined since December but imported products have shown some
price improvement. In Europe price erosion has continued despite largely
successful price increases in southern Europe.
Advertising spending, which is an important driver of coated paper demand,
remains mixed. Advertising pages in the USA increased 5.3% this quarter and 9.1%
in March from a low base a year earlier. In Europe there has not been any
sustained increase in advertising spending.
Total European industry shipments of coated fine paper for the quarter improved
by 5.5%, however, shipments to western Europe were only 1.5% higher compared to
a year earlier. In the USA where there was an element of trading down and prices
declined slightly, industry shipments were down 2.4%.
Against this background, the group"s sales increased 7.5% compared to the
December quarter and 25.7% compared to a year earlier, but most of the growth
can be attributed to the inclusion of the Potlatch fine paper business, which we
acquired in May last year.
Currency movements have had a major influence on our results this quarter. In
general a stronger Euro favours the trading performances of our European
business and a stronger Rand is detrimental to the Southern African business.
Because we report in US dollars a stronger Euro and a stronger Rand have a
positive translation effect on the results of the European and Southern African
businesses and lead to an increase in liabilities and assets recorded in those
currencies. The net positive effect of currency movements on shareholders equity
this quarter was US$69 million.
Net profit was marginally below the same quarter last year at US$58 million and
11.5% above the quarter ended December. Basic and Diluted earnings per share
were 25 US cents.
Costs of goods sold have been well controlled but reflect significant increases
compared to a year ago as a result of the currency translation effect.
Selling, General and Administration (SG&A) expenses were at the same level as
the December quarter but 33% higher than a year earlier mainly as a result of
the currency impact, increased insurance and higher pension costs, and the
inclusion of the Potlatch coated paper business.
Group operating profit decreased 2.9% compared to a year earlier to US$102
million and increased 11% compared to the December quarter.
During the quarter we entered swaps for US$250 million of fixed interest debt to
floating interest, which will have a beneficial impact on finance costs. Finance
costs for the quarter were US$27 million, US$3 million higher than the December
quarter, largely as a result of the currency effect.
It is our intention to swap a further US$500 million to floating rates. We have
finalised a US$500 million term loan of which 80% is at a fixed rate of
approximately 4.3% and which will be used to repay existing debt.
Once these transactions have been completed floating rate debt will represent
approximately 55% of gross debt and the effect on the finance costs rate will be
a reduction of 1.5% at current market rates.
The effective tax rate of 23.5% is consistent with our expectations for the full
year.
Cash flow and debt
Cash generated by operations was US$194 million, 6.0% higher than a year earlier
and 10.2% higher than the December quarter. Net working capital, however,
increased by US$23 million partly as a result of increased inventories.
Capital expenditure for the half year was approximately 60% of depreciation,
amortisation and fellings. Capital commitments increased from the prior quarter
by US$51 million to US$306 million. For the full year we expect capital
expenditure to approach the level of depreciation.
Net debt declined slightly to US$1,509 million from US$1,525 million in March
after our dividend payment of US$65 million in the quarter. At constant
September 2002 exchange rates net debt at March 2003 would have been in line
with the September 2002 level of US$1,419 million. The ratio of net debt to
total capitalisation declined to 35.4% from 36.7%, well within our target range.
During the quarter we re-purchased approximately 900,000 shares at an average
price of US$13.65 per share.
Operating review for the quarter
Sappi Fine Paper
Quarter ended Quarter ended
March 2003 March 2002 %
US$ million US$ million change
Sales 904 734 23.2
Operating profit 72 62 16.1
Operating profit to Sales (%) 8.0 8.4 -
EBITDA 147 126 16.7
EBITDA to Sales (%) 16.3 17.2 -
RONOA p.a. (%) 9.2 10.1 -
The fine paper business grew its sales volume by 15% compared to a year earlier,
mainly as a result of the inclusion of the Potlatch fine paper business. Our
geographic spread continues to help us maintain reasonable performance in the
face of currency volatility and weak markets particularly in the USA. We have
continued to curtail production in order to manage our output to customer demand
levels.
Our first quarter report reflected 32,000 tons of European sales in the USA as
North American sales, which, in accordance with our practice of reporting sales
in the manufacturing region, should have been shown as European sales. This has
been restated and had no effect on total sales or on regional or group profit.
Europe
Quarter ended Quarter ended
March 2003 March 2002 % change % change
US$ million US$ million (US$) (Euro)
Sales 503 433 16.2 (4.8)
Operating profit 42 65 (35.4) (47.0)
Operating profit 8.3 15.0 - -
to Sales (%)
EBITDA 83 101 (17.8) (32.7)
EBITDA to Sales 16.5 23.3 - -
(%)
RONOA p.a. (%) 11.0 19.9 - -
Apparent consumption for coated fine paper in Europe was almost flat compared to
last year and prices remained under pressure. Our average prices achieved in
Euros were approximately 4% below the December quarter reflecting primarily the
effect of the weaker dollar on export proceeds. In addition, margins were
squeezed by higher pulp prices resulting in a 35.4% drop in operating income to
US$42 million. The stronger Euro buffered the performance of the business, which
purchases over half of its pulp requirements, much of it in US dollars and had a
favourable impact on the translation of the results to dollars.
North America
Quarter ended Quarter ended
March 2003 March 2002 %
US$ million US$ million change
Sales 338 251 34.7
Operating profit 20 (10) -
Operating profit to Sales (%) 5.9 - -
EBITDA 51 15 240.0
EBITDA to Sales (%) 15.1 6.0 -
RONOA p.a. (%) 5.4 - -
Market conditions remain difficult.
Following the acquisition of the Potlatch fine paper business, we took a long-
term view and rationalised our brands and merchant distribution, which resulted
in discontinuing certain products and merchant relationships to focus on our
strengths. In the process we had a short-term loss of volume and market share
exacerbated by our efforts to increase prices in the face of others discounting.
Recovery is underway with momentum building. We expect to regain the lost share
and will have a stronger and better distribution network as a result.
In spite of difficult wood sourcing conditions in Minnesota, we are still on
target to achieve synergies of at least US$80 million in the current year, from
the Potlatch acquisition.
Higher wood and energy prices had an unfavourable effect of approximately US$8
million for the quarter compared to last year and total pension and medical
costs were approximately US$4 million higher than last year adjusted for the
inclusion of the Potlach fine paper business.
Our North American business amended its early-retirement medical plans during
the quarter to reduce its liability and on-going funding cost. This resulted in
a one-off credit of approximately US$10 million in the quarter and will have a
long-term benefit and will stabilise these costs in the future.
The operating profit of US$20 million for the quarter compared to a loss of
US$10 million a year earlier is still disappointing but signals the beginning of
a profit recovery.
Fine Paper SA
Quarter ended Quarter ended
March 2003 March 2002 % change % change
US$ million US$ million (US$) (Rand)
Sales 63 50 26.0 (8.1)
Operating profit 10 7 42.9 4.2
Operating profit 15.9 14.0 - -
to Sales (%)
EBITDA 13 10 30.0 (5.2)
EBITDA to Sales 20.6 20.0 - -
(%)
RONOA p.a. (%) 33.3 33.9 - -
The South African business has experienced increased competition from imports in
the domestic markets as a result of the strengthening of the Rand. It has
increased its margins slightly as a result of tight cost control and has
achieved a significant increase in operating profit as a result of the currency
translation to US dollars. However, it is under severe price pressure and
margins will not be maintained as prices are discounted to reflect the changed
currency conditions and the threat of imports.
Forest Products
Quarter ended Quarter ended
March 2003 March 2002 % change % change
US$ million US$ million (US$) (Rand)
Sales 191 137 39.4 1.7
Operating profit 27 42 (35.7) (53.1)
Operating profit 14.1 30.7 - -
to Sales (%)
EBITDA 44 59 (25.4) (45.6)
EBITDA to Sales 23.0 43.1 - -
(%)
RONOA p.a. (%) 11.7 24.9 - -
Pulp prices in dollars have continued to increase and the impact is now being
seen in dissolving pulp prices, but as most of these products are sold on
quarterly prices very little benefit was reflected in this quarter. The strength
of the Rand, up 16% against the US dollar since the previous quarter, has
depressed the business" export margins and will also affect domestic margins in
the coming quarter.
The supply/demand balance for dissolving pulp has been tightened by improved
demand for textiles and the announced closure of a major dissolving pulp mill in
the USA. The Saiccor mill has returned to full production and this plus the
sharp improvement in pulp prices will have a positive impact on our performance
in the quarter ahead.
In the domestic market demand remained strong in the quarter. There is a risk,
however, that the stronger Rand will dampen economic activity and increase the
competitiveness of imported paper.
Outlook
Although the market conditions remain difficult and unpredictable, the recent
boost in the US business confidence index may indicate a positive change in the
future. Pulp prices have moved up strongly since the start of the year and
consumer and producer pulp inventories remain low but, at the same time, there
is severe price pressure from imports on paper prices in the USA and downward
pressure from discounting in Europe.
The continued weakness of markets in Europe and the disruption of economic
growth in Asia, particularly in China and Hong Kong, together with the changes
in energy costs and the volatility in the currencies in which we operate make it
increasingly difficult to predict earnings accurately. It will be a challenge
to meet our earlier forecast that we expect the full year earnings per share to
exceed those of the previous year. That continues to be our aim. While the
changes in prices and currency movements have an immediate effect on our revenue
line, the benefits associated with lower input costs resulting from a change in
energy prices and currency movements tend to come through more slowly. It is,
therefore, clear that our earnings per share for the third quarter will not
match those of the immediate past quarter.
On behalf of the Board
E van As D G Wilson
Director Director
8 May 2003
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 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 and pricing), adverse changes in the markets for
the group"s products, consequences of substantial leverage, changing regulatory
requirements, unanticipated production disruptions, economic and political
conditions in international markets, 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.
Financial results for the second quarter and half-year ended March 2003
Group Income Statement
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March March March 2003 March 2002
2003 2002
US$ US$ % US$ million US$ million %
million million change change
Sales 1,095 871 25.7 2,114 1,703 24.1
Cost of sales* 912 705 1,758 1,410
Gross profit 183 166 10.2 356 293 21.5
Selling, 81 61 162 123
general &
administrative
expenses *
Operating 102 105 (2.9) 194 170 14.1
profit
Non-trading (1) 7 (1) 19
(profit) loss
Net finance 27 13 51 38
costs
Net paid 29 18 54 43
Capitalised (5) (10) (11) (17)
Net foreign 3 1 8 8
exchange losses
Change in fair - 4 - 4
value of
financial
instruments
Profit before 76 85 144 113 27.4
tax (10.6)
Taxation 17 25 31 16
- current
- deferred 1 1 3 16
Net profit 58 59 (1.7) 110 81 35.8
Earnings per 25 25 48 35
share
(US cents)
Headline 25 26 48 40
earnings per
share
(US cents) **
Weighted 229.4 230.6 229.8 230.2
average number
of shares in
issue
(millions)
Diluted 25 25 47 35
earnings per
share
(US cents)
Diluted 25 26 47 40
headline
earnings per
share
(US cents) **
Weighted
average number
of shares on
fully diluted
basis 232.1 234.3 232.5 233.6
(millions)
Calculation of
Headline
earnings net of
tax **
Net profit 58 59 110 81
(Profit) loss (1) 1 (1) 1
on disposal of
business and
fixed assets
Mill closure 1 1 1 5
costs
Debt - - - 6
restructuring
costs
Headline 58 61 110 93
earnings
* Reallocation of delivery charges. Refer to note 3 for further details.
** Headline earnings disclosure is required by the JSE Securities Exchange South
Africa.
Group Balance Sheet
Reviewed Audited
March 2003 Sept. 2002
US$ million US$ million
ASSETS
Non-current assets 3,934 3,639
Property, plant and equipment 3,388 3,189
Plantations 400 298
Deferred taxation 6 6
Other non-current assets 140 146
Current assets 1,199 1,002
Cash and cash equivalents 203 161
Trade and other receivables 325 282
Prepaid income taxes 3 38
Inventories 668 521
Total assets 5,133 4,641
EQUITY AND LIABILITIES
Shareholders" equity
Ordinary shareholders" interest 1,836 1,601
Minority interest 2 2
Non-current liabilities 2,171 2,110
Interest-bearing borrowings 1,457 1,455
Deferred taxation 465 399
Other non-current liabilities 249 256
Current liabilities 1,124 928
Interest-bearing borrowings and bank 255 125
overdraft
Taxation payable 74 48
Other current liabilities 795 755
Total equity and liabilities 5,133 4,641
Number of shares in issue at balance sheet 229.2 230.2
date (millions)
Group Cash Flow Statement
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March 2003 March 2002 March March
2003 2002
US$ US$ US$ US$
million million million million
Cash generated by operations 194 183 370 313
Movement in working capital (23) (31) (165) (131)
Net finance costs (31) (23) (61) (55)
Taxation recovered (paid) 30 (58) 25 (59)
Dividends paid (65) (60) (65) (60)
Cash retained from operating 105 11 104 8
activities
Cash effects of investing (65) (43) (105) (106)
activities
40 (32) (1) (98)
Cash effects of financing (22) (90) 34 (205)
activities
Net movement in cash and cash 18 (122) 33 (303)
equivalents
Group Statement Of Changes In Shareholders" Equity
Reviewed Reviewed
Half-year Half-year
ended ended
March 2003 March 2002
US$ million US$ million
Balance - beginning of year 1,601 1,503
Net profit 110 81
Foreign currency translation reserve 223 (174)
Revaluation of movement in share capital 3 -
and share premium
Revaluation of derivative instruments (17) 11
Dividends declared - US$0.28 (2002: (65) (60)
US$0.26) per share
(Share buybacks) net of transfers to (19) 3
participants of the share purchase trust
Balance - end of period 1,836 1,364
Notes to the Group Results
1. Basis of preparation
The group results have been prepared in conformity with South African Statements
of Generally Accepted Accounting Practice (SA GAAP).
Sappi has changed its accounting policy with regard to the translation of equity
categories to conform to the requirements of AC 430 (Reporting currency -
Translation from measurement currency to presentation currency), the effects of
which are negligible. All of the other accounting policies are the same as those
in the September 2002 annual financial statements.
The financial results for the quarter have been reviewed by the group"s
auditors, Deloitte & Touche. Their report is available for inspection at the
company"s registered offices.
2. Headline Earnings per share
Headline earnings per share has been restated as required by the new JSE
Securities Exchange South Africa Listing Requirements. These require that all
companies comply with circular 7/2002 issued by the South African Institute of
Chartered Accountants.
For Sappi the only change in headline earnings is that there are no longer any
adjustments for movements in restructuring provisions.
The impact on headline earnings per share and diluted headline earnings per
share is negligible for all periods except for the half-year ended March 2002
where diluted headline earnings per share increased by 1 US cent to 40 US cents.
3. Reallocation of costs
In prior years, a portion of delivery charges was included in selling, general
and administrative expenses. It is now considered more appropriate to reflect
all delivery charges under cost of sales. The effect is to increase cost of
sales and decrease selling, general and administrative expenses by US$21 million
for the quarter (December 2002: US$20 million; March 2002: US$15 million) and
US$41 million for the half-year end (March 2002: US$31 million.)
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March March March March
2003 2002 2003 2002
US$ US$ US$ US$
million million million million
4. Operating profit Included in
operating profit are:
Depreciation 85 72 170 144
Fellings 1 5 9 12
Amortisation 6 4 11 8
92 81 190 164
5. Capital expenditure
Property, plant and equipment 62 37 100 99
Plantations 7 5 13 10
69 42 113 109
Reviewed Audited
March Sept.
2003 2002
US$ US$
million million
6. Capital commitments
Contracted but not provided 137 55
Approved but not contracted 169 173
306 228
7. Contingent liabilities
Guarantees and suretyships 73 66
Other contingent liabilities 14 14
Supplemental Information
Definitions
Average - averages are calculated as the sum of the opening and closing balances
for the relevant period divided by two.
* EBITDA - earnings before non-trading profit/loss and before interest, tax,
depreciation, amortisation and fellings
* EBITDA to sales - EBITDA divided by sales
Fellings - the amount charged against the income statement representing the
standing cost of the plantations harvested
Headline earnings - as defined in circular 7/2002 issued by the South African
Institute of Chartered Accountants, separates from earnings all items of a
capital nature. It is not necessarily a measure of sustainable earnings. It is a
listing requirement of the JSE Securities Exchange South Africa to disclose
headline earnings per share.
* Net assets - total assets less current liabilities
* Net asset value - shareholders" equity plus net deferred tax
* Net asset value per share - net asset value divided by number of shares in
issue at balance sheet date
* Net debt - current and non-current interest-bearing borrowings, and bank
overdrafts (net of cash, cash equivalents and short-term deposits)
* Net debt to total capitalisation - Net debt divided by shareholders" equity
plus minority interest, non-current liabilities, current interest bearing-
borrowings and overdraft
* ROE - return on average equity. Net profit divided by average shareholders"
equity
* RONA - operating profit divided by average net assets
* RONOA - operating profit divided by average net operating assets. Net
operating assets are total assets (excluding deferred taxation and cash) less
current liabilities (excluding interest-bearing borrowings and bank overdraft)
* The above financial measures, other than headline earnings per share, 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
Additional information
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March March March March
2003 2002 2003 2002
US$ US$ US$ US$
million million million million
Operating profit to
EBITDA * reconciliation
Operating profit per the Group 102 105 194 170
Income Statement
Depreciation 85 72 170 144
Fellings 1 5 9 12
Amortisation 6 4 11 8
EBITDA * 194 186 384 334
Reviewed Audited
March 2003 Sept. 2002
US$ million US$ million
Net debt (US$ million) * 1,509 1,419
Net debt to total capitalisation (%) * 35.4 37.0
Net asset value per share (US$) * 10.01 8.66
* Refer to the supplemental information for the definition of the term herein.
Supplemental Information
Regional information
Reviewed Reviewed
Quarter Quarter
ended ended
March 2003 March
2002
US$ US$ million %
million change
Sales - Metric tons
(000"s)
Fine Paper - North America* 343 234 46.6
Europe* 592 559 5.9
Southern Africa 69 80 (13.8)
Total 1,004 873 15.0
Forest Products - Pulp and paper 395 346 14.2
operations
Forestry operations 309 275 12.4
Total 1,708 1,494 14.3
Sales
Fine Paper - North America* 338 251 34.7
Europe* 503 433 16.2
Southern Africa 63 50 26.0
Total 904 734 23.2
Forest Products - Pulp and paper 178 129 38.0
operations
Forestry operations 13 8 62.5
Total 1,095 871 25.7
Operating profit
Fine Paper - North America 20 (10) -
Europe 42 65 (35.4)
Southern Africa 10 7 42.9
Total 72 62 16.1
Forest Products 27 42 (35.7)
Corporate 3 1 200.0
Total 102 105 (2.9)
Earnings before
interest, tax,
depreciation and
amortisation charges
Fine Paper - North America 51 15 240.0
Europe 83 101 (17.8)
Southern Africa 13 10 30.0
Total 147 126 16.7
Forest Products 44 59 (25.4)
Corporate 3 1 200.0
Total 194 186 4.3
Net operating assets
Fine Paper - North America 1,458 1,042 39.9
Europe 1,560 1,312 18.9
Southern Africa 130 85 52.9
Total 3,148 2,439 29.1
Forest Products 956 691 38.4
Corporate (49) 5 -
Total 4,055 3,135 29.3
Reviewed Reviewed
Half-year Half-year
ended ended
March March
2003 2002
US$ US$ %
million million change
Sales - Metric tons (000"s)
Fine Paper - North America 711 452 57.3
Europe 1,117 1,077 3.7
Southern Africa 143 153 (6.5)
Total 1,971 1,682 17.2
Forest Products - Pulp and paper 732 672 8.9
operations
Forestry 607 509 19.3
operations
Total 3,310 2,863 15.6
Sales
Fine Paper - North America 707 490 44.3
Europe 937 843 11.2
Southern Africa 122 98 24.5
Total 1,766 1,431 23.4
Forest Products - Pulp and paper 323 255 26.7
operations
Forestry 25 17 47.1
operations
Total 2,114 1,703 24.1
Operating profit
Fine Paper - North America 29 (20) -
Europe 81 104 (22.1)
Southern Africa 19 14 35.7
Total 129 98 31.6
Forest Products 61 64 (4.7)
Corporate 4 8 (50.0)
Total 194 170 14.1
Earnings before interest, tax,
depreciation and amortisation
charges *
Fine Paper - North America 91 30 203.3
Europe 165 178 (7.3)
Southern Africa 24 19 26.3
Total 280 227 23.3
Forest Products 100 99 1.0
Corporate 4 8 (50.0)
Total 384 334 15.0
Net operating assets
Fine Paper - North America 1,458 1,042 39.9
Europe 1,560 1,312 18.9
Southern Africa 130 85 52.9
Total 3,148 2,439 29.1
Forest Products 956 691 38.4
Corporate (49) 5 -
Total 4,055 3,135 29.3
* Our first quarter report reflected 32,000 tons and US$31 million of European
sales in the USA as USA sales, which, in accordance with our practice of
reporting sales in the manufacturing region, should have been shown as European
sales. This has been restated and had no effect on total sales or on regional or
group profit.
Supplemental Information
Summary Rand Convenience Translation
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half- Half-
year year
ended ended ended ended
March March % March March %
2003 2002 change 2003 2002 change
Sales 9,149 9,977 (8.3) 19,209 18,033 6.5
(ZAR million)
Operating 852 1,203 (29.2) 1,763 1,800 (2.1)
profit
(ZAR million)
Profit after 485 676 (28.3) 1,000 858 16.6
taxation
(ZAR million)
EBITDA 1,621 2,131 (23.9) 3,489 3,537 (1.4)
(ZAR million)*
Operating 9.3 12.1 9.2 10.0
profit to
sales (%)
EBITDA * to 17.7 21.4 18.2 19.6
sales (%)
Operating 10.3 14.9 9.9 12.1
profit to
average net
assets (%)
EPS (SA cents) 209 286 (26.9) 436 371 17.5
Headline EPS 209 298 (29.9) 436 424 2.8
(SA cents) *
Net debt 12,004 13,504 (11.1)
(ZAR million)*
Net debt to 35.4 36.6
total
capitalisation
(%) *
Cash generated 1,621 2,096 (22.7) 3,362 3,314 1.4
by operations
(ZAR million)
Cash retained 877 126 945 85
from
operating
activities
(ZAR million)
Net movement 150 (1,397) 300 (3,208)
in cash and
cash
equivalents
(ZAR million)
* Refer to the supplemental information for the definition of the term herein.
Exchange Rates
March December September June March
2003 2002 2002 2002 2002
Exchange rates:
Period end 7.9550 8.7200 10.5400 10.3600 11.3100
rate: US$1 =
ZAR
Average rate 8.3550 9.7265 10.4818 10.6581 11.4547
for the
Quarter:
US$1 = ZAR
Average rate 9.0866 9.7265 10.5393 10.5443 10.5887
for the YTD:
US$1 = ZAR
Period end 1.0729 1.0387 0.9789 0.9920 0.8724
rate:
EUR1 = US$
Average rate 1.0686 0.9995 0.9850 0.9196 0.8750
for the
Quarter:
EUR1 = US$
Average rate 1.0334 0.9995 0.9188 0.8997 0.8844
for the YTD:
EUR1 = US$
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.
This report is available on the Sappi website - www.sappi.com
Other interested parties can obtain printed copies of this report from:
South Africa:
Computershare Investor Services Limited
70 Marshall Street
Johannesburg 2001
P.O. Box 61051, Marshalltown 2107
Tel +27 (0)11 370-5000
United States ADR Depositary:
Bank of New York ADR Department 101 Barclay Street New York, NY 10286
Tel +1 212 815-5800
United Kingdom:
Capita IRG plc Bourne House 34 Beckenham Road Beckenham, Kent BR3 4TU, DX 91750
Beckenham West
Tel +44 (0)208 639-2157
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