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Sappi Limited -
Sappi Limited
Registration number 1936/008963/06
Share code : SAVVI
ISIN : ZAE000006284
Johannesburg, 23 June 2003
ANNOUNCEMENT
Sappi announces trading update.
Sappi today provided a trading update of market conditions in advance of its
closed period and announcement of third quarter results on 31 July 2003.
Introduction
In announcing second quarter results to March 2003, the group gave a clear
indication that earnings per share for the third quarter would not match those
of the second quarter. Since then, conditions in Sappi"s main markets have
deteriorated further than expected, with continued pressure on both prices and
volumes. Third quarter earnings per share - traditionally the weakest quarter
for Sappi - therefore could be approximately 50% of those of the second quarter.
Market conditions
The improvement in market conditions anticipated in the United States has not
yet materialised and domestic demand remains subdued.
In Europe there has been a considerable shortfall in volumes due to the very
weak economic conditions and some downward pressure on prices.
In South Africa, the continued strength of the rand against the dollar has
reduced export margins, and substantial allowances have had to be made in
domestic prices to counter imported competition.
Going forward
Although the expected upturn has not yet materialised in the US, we do expect an
improvement in the web business in the next quarter, and price increases have
been announced by two major suppliers. Conditions in Europe remain depressed,
although falling pulp prices may bring some margin relief. The current strength
of the rand and pulp price decreases will adversely impact the South African
business.
The group"s leadership position across all major markets, supported by excellent
distribution systems and its pulp integration strategy, have continued to assist
the group in weathering these extremely tough markets, which have unusually
affected all our markets and regions at the same time. While earnings per share
for the full year are now likely to be less than last year, earnings for the
fourth quarter 2003 are expected to be better than those for the third quarter.
Given current market uncertainty and volatility, we will only give further
guidance at the time of our third quarter results announcement.
End
For further information contact:
Andre F Oberholzer
Corporate Affairs and Communication Manager
Sappi Limited
Tel +27(0) 11 407 8044
Fax +27(0) 11 403 8236
Mobile +27(0) 82 906 0638
Andre.Oberholzer@za.sappi.com
Date: 23/06/2003 03:33:04 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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