Sappi Limited - Sappi announces trading update

Sappi Limited - Sappi announces trading update                                  
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                     
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