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SAPPI LIMITED
REG. NO. 1936/008963/06
REPORT FOR THE FIRST QUARTER ENDED 31 DECEMBER 2000
SUMMARY
QUARTER ENDED
DECEMBER SEPTEMBER DECEMBER
2000 2000 1999
SALES (US$ MILLION) 1,115 1,246 1,116
OPERATING PROFIT (US$ MILLION) 143 199 127
EBITDA (US$ MILLION) 237 285 227
OPERATING PROFIT TO SALES (%) 12.8 16.0 11.4
EBITDA TO SALES (%) 21.3 22.9 20.4
OPERATING PROFIT TO AVERAGE
NET ASSETS RONA (%) 15.8 20.6 12.9
EPS BEFORE EXCEPTIONAL
ITEMS (HEADLINE) (US CENTS) 34 48 26
EPS (US CENTS) 34 54 29
RETURN ON EQUITY (%) 20.1 32.3 17.5
NET DEBT (US$ MILLION) 1,269 1,270* 1,927*
*RESTATED FOR RECLASSIFICATION OF MINORITY INTEREST TO DEBT
HIGHLIGHTS
INVENTORY CORRECTION SLOWS SALES
OPERATING PROFIT UP 13%
EPS UP 31%
SHARE BUY BACK COMMENCED
COMMENTS
WE HAD ANOTHER STRONG EARNINGS QUARTER AND OUR MARGINS AND RETURNS WERE BETTER
THAN A YEAR EARLIER. THE FIRST FINANCIAL QUARTER IS TYPICALLY A SEASONALLY
QUIET PERIOD AND THIS YEAR WAS FURTHER AFFECTED BY A DEGREE OF DESTOCKING BY
OUR CUSTOMERS AND BY OURSELVES TO MEET OUR COMMITMENT TO MATCH SUPPLY TO MARKET
REQUIREMENTS. IN ADDITION TO THE DOWNTIME TAKEN IN SEPTEMBER, WE TOOK ABOUT
70,000 TONS OF PAPER DOWNTIME AND 30,000 TONS PULP DOWNTIME IN THE QUARTER.
SALES WERE SIMILAR TO THE SAME QUARTER LAST YEAR AND OPERATING PROFIT REFLECTED
A 13% IMPROVEMENT.
FINE PAPER
OUR PERFORMANCE REMAINED STRONG IN THE QUARTER EXCEPT IN NORTH AMERICA WHERE
SLOWER SALES, AS A RESULT OF THE STRONG DOLLAR, COMPETITIVELY PRICED IMPORTS
AND SOME OPERATIONAL ISSUES, RESULTED IN A SHARP DECLINE IN OPERATING PROFITS.
FINE PAPER BUSINESS
QUARTER ENDED
DEC DEC
2000 1999
US$ US$ %
MILLION MILLION CHANGE
SALES 918 914 0
OPERATING PROFIT 78 96 (19)
OPERATING MARGIN (%) 8.5 10.5 -
EBITDA 147 167 (12)
EBITDA MARGIN (%) 16.0 18.3 -
RONOA P.A. (%) 11.5 12.6 -
EUROPE
SALES VOLUME WAS SLIGHTLY LOWER THAN A YEAR EARLIER AS A RESULT OF SOME
INVENTORY CORRECTION BY OUR CUSTOMERS. ALTHOUGH THE AVERAGE PRICE IN EUROS WAS
UP 14%, THE DOLLAR EQUIVALENT WAS LOWER THAN A YEAR EARLIER.
WE INCREASED OPERATING PROFIT SLIGHTLY BECAUSE OF CONTINUED TIGHT COST CONTROL
AND EXCELLENT OPERATING EFFICIENCIES, AND WERE ABLE TO OFFSET THE HIGH COST OF
PULP, WHICH WAS EXACERBATED BY THE STRONG DOLLAR.
QUARTER ENDED
DEC DEC
2000 1999 % %
US$ US$ CHANGE CHANGE
MILLION MILLION (US$) (EUROS)
SALES 466 474 (2) 18
OPERATING PROFIT 54 53 2 22
OPERATING MARGIN (%) 11.6 11.2 - -
EBITDA 92 95 (3) 16
EBITDA MARGIN (%) 19.7 20.0 - -
RONOA P.A. (%) 15.6 12.7 - -
THE OPERATING MARGIN IMPROVED SLIGHTLY AND THE RETURN ON NET OPERATING ASSETS
WAS 15.6%, 3% HIGHER THAN A YEAR EARLIER.
NORTH AMERICA
OPERATING PROFIT OF US$18 MILLION WAS EXTREMELY WEAK AND ONLY HALF OF THE SAME
QUARTER LAST YEAR. ALTHOUGH VOLUME FOR THE QUARTER WAS ESSENTIALLY FLAT,
SHIPMENTS DROPPED OFF SHARPLY IN NOVEMBER AND DECEMBER. TWO CAPITAL PROJECTS -
ONE INVOLVING EPA "CLUSTER RULE COMPLIANCE" AND THE OTHER PAPER QUALITY
IMPROVEMENT - RESULTED IN DOWNTIME IN THE QUARTER. THE IMPACT OF BUYING PULP
DURING THE DOWNTIME, PULP PRICE INCREASES AND THE INCREASE IN THE COST OF
ENERGY COULD NOT BE RECOVERED BY HIGHER PRICES, WHICH WERE ONLY 2% HIGHER THAN
A YEAR EARLIER. PERFORMANCE WAS FURTHER AGGRAVATED BY HIGHER BENEFIT COSTS AND
AN INCREASE IN CHEMICAL PRICES AS SUPPLIERS PASSED THROUGH HIGHER ENERGY COSTS.
QUARTER ENDED
DEC DEC
2000 1999
US$ US$ %
MILLION MILLION CHANGE
SALES 395 380 4
OPERATING PROFIT 18 38 (53)
OPERATING MARGIN (%) 4.6 10.0 -
EBITDA 46 65 (29)
EBITDA MARGIN (%) 11.6 17.1 -
RONOA P.A. (%) 5.9 12.6 -
THE OPERATING MARGIN DECLINED TO 4.6% AND THE RETURN ON NET OPERATING ASSETS
DECLINED TO 5.9%. PERFORMANCE AND RETURNS ARE EXPECTED TO IMPROVE IN THE NEXT
PERIODS ALTHOUGH THEY ARE UNLIKELY TO MATCH LAST YEAR.
SOUTH AFRICA
THE SOUTH AFRICAN FINE PAPER BUSINESS CONTINUED TO IMPROVE ITS PERFORMANCE.
SALES VOLUME INCREASED SLIGHTLY COMPARED TO A YEAR EARLIER AND PRICES IN RAND
TERMS BY APPROXIMATELY 15%. IN DOLLAR TERMS HOWEVER PRICES DECLINED BY
APPROXIMATELY 6%.
OPERATING INCOME INCREASED BY 20% TO US$6 MILLION INCREASING THE OPERATING
MARGIN TO 10.5% AND RETURN ON NET OPERATING ASSETS TO 22.3%.
FOREST PRODUCTS
THE BUSINESS CONTINUED ITS STRONG PERFORMANCE IN THE QUARTER. PULP (NBSK) PRICE
REMAINED AT THE US$710 PER TON LEVEL SET THE PREVIOUS QUARTER AND DISSOLVING
PULP PRICES STRENGTHENED MARGINALLY. PRICES FOR NEWSPRINT CONTINUED TO
STRENGTHEN, HOWEVER THERE WAS SOME WEAKENING OF KRAFT LINERBOARD PRICES IN OUR
EXPORT MARKETS.
THE SALES VOLUME OF CONTINUING OPERATIONS INCREASED BY 10% COMPARED TO LAST
YEAR (THE PARTICLEBOARD BUSINESS WAS SOLD IN SEPTEMBER 2000) AND AVERAGE PRICES
ACHIEVED INCREASED 20% IN RANDS BUT WERE FLAT IN DOLLAR TERMS COMPARED TO A
YEAR EARLIER.
FOREST PRODUCTS BUSINESS
QUARTER ENDED
DEC DEC
2000 1999* % %
US$ US$ CHANGE CHANGE
MILLION MILLION (US$) (RANDS)
SALES 197 202 (2) 22
OPERATING PROFIT 62 33 88 135
OPERATING MARGIN (%) 31.5 16.3 - -
EBITDA 87 62 40 74
EBITDA MARGIN (%) 44.2 30.7 - -
RONOA P.A. (%) 26.4 11.0 - -
*INCLUDES DISCONTINUED OPERATIONS.
THE OPERATING MARGIN WAS 31.5% AND RETURN ON NET OPERATING ASSETS WAS 26.4%,
TWO AND A HALF TIMES THE RETURN A YEAR EARLIER.
ACCOUNTING POLICY CHANGES
THERE HAVE BEEN A NUMBER OF ACCOUNTING POLICY CHANGES IN THE NEW FINANCIAL
YEAR. THIS IS MAINLY DUE TO THE NUMEROUS CHANGES TO SOUTH AFRICAN ACCOUNTING
STANDARDS TO HARMONIZE THEM WITH RECENTLY CHANGED INTERNATIONAL ACCOUNTING
STANDARDS.
THE FULL IMPACT ON EARNINGS OF SUCH NEW POLICIES HAS NOT BEEN MATERIAL. THE
IMPACT ON EQUITY WAS A REDUCTION OF US$57 MILLION AS A RESULT OF A CHANGE IN
TREATMENT OF EMPLOYEE BENEFITS AND FINANCIAL INSTRUMENTS.
THE IMPLEMENTATION OF AC 412 CONSOLIDATION OF SPECIAL PURPOSES ENTITIES AND AC
133 FINANCIAL INSTRUMENTS HAS IMPACTED ON THE GROUP'S NET DEBT SITUATION. AS A
RESULT OF THE ADOPTION OF NEW ACCOUNTING STANDARD AC 412 IN RESPECT OF THE
CONSOLIDATION OF SPECIAL PURPOSE ENTITIES, AN AMOUNT OF ABOUT US$25 MILLION OF
ASSETS AND DEBT HAS BEEN BROUGHT ONTO THE BALANCE SHEET. PRIOR PERIODS HAVE
BEEN RESTATED.
IN TERMS OF THE DEFINITIONS OF THE NEW ACCOUNTING STANDARD AC 133 ON FINANCIAL
INSTRUMENTS, THE IDC'S INVESTMENT IN BONUSKOR, A GROUP SUBSIDIARY, HAS BEEN
RECLASSIFIED FROM MINORITY INTEREST TO CURRENT INTEREST BEARING LIABILITIES FOR
THE AMOUNT OF US$47 MILLION. THE EFFECT ON THE INCOME STATEMENT WAS TO INCREASE
NET FINANCE COSTS AND REDUCE INCOME ATTRIBUTABLE TO MINORITY INTERESTS BY US$2
MILLION FOR THE QUARTER. IN TERMS OF THIS ACCOUNTING STANDARD NO RESTATEMENT OF
PRIOR YEARS IS ALLOWED. AS IT IS SAPPI'S INTENTION TO TENDER CASH FOR THIS
OBLIGATION, THIS CHANGE IS, IN ANY CASE, APPROPRIATE.
GROUP RESULTS
THE GROUP'S EARNINGS INCREASED 24% COMPARED TO THE COMPARATIVE QUARTER LAST
YEAR TO US$82 MILLION. EARNINGS PER SHARE WERE 34 US CENTS AND EARNINGS PER
SHARE BEFORE EXCEPTIONAL ITEMS WERE ALSO 34 US CENTS, 31% ABOVE THE EQUIVALENT
QUARTER LAST YEAR.
OPERATING PROFIT INCREASED 13% TO US$143 MILLION WITH EACH BUSINESS EXCEPT
NORTH AMERICA CONTRIBUTING TO THE IMPROVEMENT.
SALES VOLUMES OF CONTINUING OPERATIONS WERE SLIGHTLY HIGHER THAN A YEAR
EARLIER. PRICES WERE SLIGHTLY HIGHER IN DOLLAR TERMS, WHICH DOES NOT REFLECT
THE SIGNIFICANT INCREASES IN EUROPE AND SOUTHERN AFRICA IN LOCAL CURRENCY TERMS
COMPARED WITH LAST YEAR.
NET FINANCE COSTS FOR THE QUARTER WERE US$24 MILLION, 19% BELOW LAST YEAR
ASSUMING THE PRIOR YEAR HAD BEEN RESTATED. AS NO RESTATEMENT IS ALLOWED IN
TERMS OF AC 133 ON FINANCIAL INSTRUMENTS, THE FINANCE COSTS REPORTED WERE 11%
BELOW LAST YEAR.
TAXATION FOR THE QUARTER WAS US$36 MILLION, AN EFFECTIVE TAX RATE OF
APPROXIMATELY 30%, WHICH IS LOWER THAN THE RATE LAST YEAR LARGELY AS A RESULT
OF THE REGIONAL SPLIT OF PROFIT AND THE IMPACT OF THE LOWER GERMAN TAX RATE.
CASH FLOW AND DEBT
STRONG CASH FLOW OF US$237 MILLION (EBITDA) WAS OFFSET BY A SEASONAL INCREASE
IN WORKING CAPITAL OF US$80 MILLION AND CAPITAL EXPENDITURE OF US$93 MILLION,
MUCH OF WHICH (US$29 MILLION) RELATED TO ONE-OFF ENVIRONMENTAL EXPENDITURE IN
NORTH AMERICA (TO COMPLY WITH THE EPA "CLUSTER RULES") AND IN SOUTHERN AFRICA.
CONTINUED DEBT REDUCTION WAS OFFSET DURING THE QUARTER BY THE EFFECT OF
ACCOUNTING STANDARDS CHANGES AND CURRENCY MOVEMENTS.
SHARE REPURCHASE
AT A SHAREHOLDER MEETING ON 15 DECEMBER 2000, APPROVAL WAS OBTAINED FOR THE
PURCHASE OF UP TO 10% OF SAPPI'S SHARES BY A SUBSIDIARY. A SUBSIDIARY HAS
COMMENCED REPURCHASING SHARES AND BY 31 DECEMBER HAD PURCHASED 1.25 MILLION
SHARES.
TO DATE, THE SUBSIDIARY HAS BOUGHT 5,687,700 SHARES REPRESENTING APPROXIMATELY
2.4% OF THE ISSUED SHARES AT AN AVERAGE PRICE OF R53.47 PER SHARE.
WE WILL MAKE A FULL ANNOUNCEMENT IN ACCORDANCE WITH THE REQUIREMENTS OF THE JSE
SECURITIES EXCHANGE SOUTH AFRICA WHEN A TOTAL OF 3% OF ISSUED SHARES HAS BEEN
REPURCHASED.
OUTLOOK
MANY PULP AND PAPER ANALYSTS ARE EXPECTING A SLOWER START TO THE CALENDAR YEAR.
TO DATE CONTRACT PULP (NBSK) PRICES HAVE REMAINED AT US$710 PER TON AND
ALTHOUGH PRODUCER INVENTORIES HAVE INCREASED, CONSUMER INVENTORIES HAVE FALLEN
AND TOGETHER THEY REMAIN AT REASONABLE LEVELS. DEMAND FOR COATED WOODFREE PAPER
REMAINS FIRM. THERE IS HOWEVER PRESSURE ON PRICES IN NORTH AMERICA BUT IN
EUROPE PRICES ARE STEADY.
THERE IS SOME INCREASED DISCOUNTING IN BOTH PULP AND PAPER BUT IN GENERAL THE
INDUSTRY CONTINUES TO SHOW CONSIDERABLE COMMITMENT TO MATCHING SUPPLY TO DEMAND
ECONOMISTS PREDICT A SLOWING OF ECONOMIC GROWTH IN THE USA BUT GLOBAL GROWTH
SHOULD STILL BE REASONABLE, AND IN THESE CIRCUMSTANCES WE EXPECT TO MATCH LAST
YEAR'S US DOLLAR EARNINGS PER SHARE FOR THE FULL YEAR.
ON BEHALF OF THE BOARD
E VAN AS D G WILSON
DIRECTOR DIRECTOR
24 JANUARY 2001
FORWARD LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS REPORT 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
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), 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.
GROUP INCOME STATEMENT
UNAUDITED
QUARTER ENDED
DECEMBER DECEMBER
2000 1999
US$ MILLION US$ MILLION % CHANGE
SALES 1,115 1,116 (0.1)
COST OF SALES 882 900
GROSS PROFIT 233 216 7.9
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 90 89
OPERATING PROFIT 143 127 12.6
NON-TRADING (LOSS)/PROFIT (1) 6
NET FINANCE COSTS 24 27
NET PAID 32 36
CAPITALISED (8) (9)
PROFIT BEFORE TAX 118 106
TAXATION - CURRENT 23 12
- DEFERRED 13 25
PROFIT AFTER TAX 82 69 18.8
INCOME ATTRIBUTABLE TO
MINORITY INTERESTS 3
NET PROFIT 82 66 24.2
EBITDA 237 227 4.4
BASIC EARNINGS
PER SHARE (US CENTS) 34 29
BASIC EARNINGS BEFORE
EXCEPTIONAL ITEMS
(HEADLINE EARNINGS)
PER SHARE (US CENTS) 34 26
WEIGHTED AVERAGE NUMBER OF
SHARES IN ISSUE (MILLIONS) 238.9 230.6
DILUTED EARNINGS
PER SHARE (US CENTS) 34 28
DILUTED EARNINGS BEFORE
EXCEPTIONAL ITEMS
(HEADLINE EARNINGS)
PER SHARE (US CENTS) 34 26
WEIGHTED AVERAGE NUMBER OF
SHARES ON FULLY DILUTED
BASIS (MILLIONS) 245.0 236.3
CALCULATION OF EARNINGS BEFORE
EXCEPTIONAL ITEMS (HEADLINE)
NET OF TAX
NET PROFIT 82 66
PROFIT ON DISPOSAL OF
BUSINESS AND FIXED ASSETS (4)
DECREASE IN OTHER PROVISIONS (1) (3)
EARNINGS BEFORE EXCEPTIONAL
ITEMS (HEADLINE) 81 59
GROUP BALANCE SHEET
UNAUDITED AUDITED
DECEMBER 2000 SEPTEMBER 2000
US$ MILLION US$ MILLION
ASSETS
NON-CURRENT ASSETS 3,633 3,600
PROPERTY, PLANT AND EQUIPMENT 3,139 3,095
PLANTATIONS 362 372
DEFERRED TAXATION 35 37
OTHER NON-CURRENT ASSETS 97 96
CURRENT ASSETS 1,165 1,168
CASH AND CASH EQUIVALENTS 211 294
TRADE AND OTHER RECEIVABLES 323 319
INVENTORIES 631 555
TOTAL ASSETS 4,798 4,768
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
ORDINARY SHAREHOLDERS' INTEREST 1,649 1,618
MINORITY INTEREST 5 53
NON-CURRENT LIABILITIES 1,938 1,996
INTEREST BEARING LIABILITIES 1,198 1,278
DEFERRED TAXATION 515 500
OTHER NON-CURRENT LIABILITIES 225 218
CURRENT LIABILITIES 1,206 1,101
INTEREST BEARING LIABILITIES 245 162
BANK OVERDRAFT 37 76
OTHER CURRENT LIABILITIES 924 863
TOTAL EQUITY AND LIABILITIES 4,798 4,768
NUMBER OF SHARES IN ISSUE (MILLIONS) 237.8 239.1
NET DEBT (US$ MILLION) 1,269 1,270*
NET DEBT TO TOTAL CAPITALISATION (%) 32.8 32.5*
NET ASSET VALUE PER SHARE (US CENTS) 895 870
*RESTATED FOR RECLASSIFICATION OF MINORITY INTEREST TO DEBT IN DECEMBER 2000,
AS IF PROCESSED IN SEPTEMBER 2000.
GROUP CASH FLOW STATEMENT
UNAUDITED UNAUDITED
QUARTER ENDED QUARTER ENDED
DECEMBER 2000 DECEMBER 1999
US$ MILLION US$ MILLION
CASH GENERATED BY OPERATIONS 231 254
MOVEMENT IN WORKING CAPITAL (80) (220)
NET FINANCE COSTS (32) (36)
TAXATION PAID (1) 3
CASH RETAINED FROM OPERATING
ACTIVITIES 118 1
CASH EFFECTS OF INVESTING ACTIVITIES (94) 23
24 24
CASH EFFECTS OF FINANCING ACTIVITIES (109) 141
NET MOVEMENT IN CASH AND CASH
EQUIVALENTS (85) 165
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
UNAUDITED UNAUDITED
QUARTER ENDED QUARTER ENDED
DECEMBER 2000 DECEMBER 1999
US$ MILLION US$ MILLION
BALANCE - BEGINNING OF YEAR 1,618 1,463
CHANGES IN ACCOUNTING POLICIES 8 (27)
BALANCE - BEGINNING OF YEAR RESTATED 1,626 1,436
NET PROFIT 82 66
FOREIGN CURRENCY TRANSLATION RESERVE 9 3
DIVIDENDS DECLARED - US$ 0.25
(1999: US$ 0.19) PER SHARE (60) (45)
(SHARE BUYBACKS)/ISSUANCE OF
ORDINARY SHARES (8) 114
BALANCE AT 31 DECEMBER 1,649 1,574
RECONCILIATION OF OPENING BALANCE
OF EQUITY
BALANCE - SEPTEMBER 2000 AS
PREVIOUSLY REPORTED 1,621
CHANGES IN ACCOUNTING POLICIES:
EVENTS AFTER BALANCE SHEET DATE
(DIVIDENDS) 60
EMPLOYEE BENEFITS (53)
PROVISIONS (3)
SPECIAL PURPOSE ENTITIES (7)
RESTATED BALANCE - SEPTEMBER 2000 1,618
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. THE SAME ACCOUNTING
POLICIES HAVE BEEN FOLLOWED AS IN THE ANNUAL FINANCIAL STATEMENTS FOR SEPTEMBER
2000, EXCEPT FOR THE FOLLOWING NEW OR REVISED ACCOUNTING STANDARDS ADOPTED FOR
THIS PERIOD:
LEASES - AC 105 (REVISED), EVENTS AFTER THE BALANCE SHEET DATE - AC 107
(REVISED), EMPLOYEE BENEFITS - AC 116 (REVISED), DISCONTINUING OPERATIONS - AC
117 (REVISED), IMPAIRMENT OF ASSETS - AC 128, INTANGIBLE ASSETS - AC 129,
PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS - AC 130, BUSINESS
COMBINATIONS - AC 131, CONSOLIDATED FINANCIAL STATEMENTS AND ACCOUNTING FOR
INVESTMENTS IN SUBSIDIARIES - AC 132, FINANCIAL INSTRUMENTS: RECOGNITION AND
MEASUREMENT - AC 133, GOVERNMENT GRANTS - AC 134, CONSOLIDATION: SPECIAL
PURPOSE ENTITIES - AC 412 AND SHARE CAPITAL - REACQUIRED OWN EQUITY INSTRUMENTS
(TREASURY SHARES) - AC 416.
THE EFFECT ON EQUITY FOR THE ABOVE CHANGES IS REFLECTED IN THE GROUP STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY. THE EFFECT ON NET PROFIT FOR THE CURRENT
AND COMPARABLE PERIOD IS NOT MATERIAL. WHERE APPROPRIATE, COMPARATIVE FIGURES
HAVE BEEN RESTATED.
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.
UNAUDITED
QUARTER ENDED
DECEMBER 2000 DECEMBER 1999
US$ MILLION US$ MILLION
2. COST OF SALES
INCLUDED IN COST OF SALES ARE:
DEPRECIATION 80 84
FELLINGS 8 10
88 94
3. CAPITAL EXPENDITURE
FIXED ASSETS 86 32
PLANTATIONS 7 8
UNAUDITED AUDITED
DECEMBER 2000 SEPTEMBER 2000
US$ MILLION US$ MILLION
4. CAPITAL COMMITMENTS
CONTRACTED BUT NOT PROVIDED 96 73
APPROVED BUT NOT CONTRACTED 215 150
311 223
5. CONTINGENT LIABILITIES
GUARANTEES AND SURETYSHIPS 63 80
OTHER CONTINGENT LIABILITIES 51 46
REGIONAL INFORMATION
UNAUDITED
QUARTER ENDED
DECEMBER 2000 DECEMBER 1999
US$ MILLION US$ MILLION % CHANGE
SALES - METRIC TONS
FINE PAPER - NORTH AMERICA 328 323 1.5
EUROPE 563 568 (0.9)
SOUTHERN AFRICA 71 70 1.4
TOTAL 962 961 0.1
FOREST PRODUCTS 621 648 (4.2)
TOTAL 1,583 1,609 (1.6)
SALES
FINE PAPER - NORTH AMERICA 395 380 3.9
EUROPE 466 474 (1.7)
SOUTHERN AFRICA 57 60 (5.0)
TOTAL 918 914 0.4
FOREST PRODUCTS 197 202 (2.5)
TOTAL 1,115 1,116 (0.1)
OPERATING PROFIT
FINE PAPER - NORTH AMERICA 18 38 (52.6)
EUROPE 54 53 1.9
SOUTHERN AFRICA 6 5 20.0
TOTAL 78 96 (18.8)
FOREST PRODUCTS 62 33 87.9
CORPORATE 3 (2)
TOTAL 143 127 12.6
EARNINGS BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION
CHARGES**
FINE PAPER - NORTH AMERICA 46 65 (29.2)
EUROPE 92 95 (3.2)
SOUTHERN AFRICA 9 7 28.6
TOTAL 147 167 (12.0)
FOREST PRODUCTS 87 62 40.3
CORPORATE 3 (2)
TOTAL 237 227 4.4
NET OPERATING ASSETS
FINE PAPER - NORTH AMERICA 1,238 1,215 1.9
EUROPE 1,428 1,644 (13.1)
SOUTHERN AFRICA 102 159 (35.8)
TOTAL 2,768 3,018 (8.3)
FOREST PRODUCTS 940 1,212 (22.4)
CORPORATE (80) (63) 27.0
TOTAL 3,628 4,167 (12.9)
**BEFORE NON TRADING PROFIT (LOSS)
SUMMARY RAND CONVENIENCE TRANSLATION
DECEMBER 2000
UNAUDITED
QUARTER ENDED
DECEMBER DECEMBER %
2000 1999 CHANGE
SALES (ZAR MILLION) 8,425 6,810 23.7
OPERATING PROFIT
(ZAR MILLION) 1,081 775 39.4
PROFIT AFTER TAXATION
(ZAR MILLION) 620 421 47.2
EBITDA (ZAR MILLION) 1,791 1,385 29.3
OPERATING PROFIT TO SALES (%) 12.8 11.4
EBITDA TO SALES (%) 21.3 20.4
OPERATING PROFIT TO AVERAGE
NET ASSETS (%) 16.1 13.0
EPS BEFORE EXCEPTIONAL
ITEMS (HEADLINE) (SA CENTS) 257 159 61.6
BASIC EPS (SA CENTS) 257 177 45.2
EBITDA PER SHARE (SA CENTS) 750 601 24.7
NET DEBT (ZAR MILLION) 9,594* 11,839* (19.0)
NET DEBT TO TOTAL
CAPITALISATION (%) 32.8* 41.4*
CASH GENERATED BY OPERATIONS
(ZAR MILLION) 1,745 1,550
CASH RETAINED FROM OPERATING
ACTIVITIES (ZAR MILLION) 892 6
NET MOVEMENT IN CASH AND
CASH EQUIVALENTS
(ZAR MILLION) (642) 1,007
EXCHANGE RATES:
PERIOD END RATE :
US $1 = R 7.5600 6.1440
AVERAGE RATE :
US $1 = R 7.5560 6.1024
PERIOD END RATE :
US $1 = EURO 1.0730 0.9878
AVERAGE RATE :
US $1 = EURO 1.1486 0.9619
*RESTATED FOR RECLASSIFICATION OF MINORITY INTEREST TO DEBT
THIS REPORT IS AVAILABLE ON THE SAPPI WEBSITE.
OTHER INTERESTED PARTIES CAN OBTAIN PRINTED COPIES OF THIS REPORT FROM:
SOUTH AFRICA: MERCANTILE REGISTERS LIMITED, 8TH FLOOR, 11 DIAGONAL STREET,
JOHANNESBURG, 2001, PO BOX 1053, JOHANNESBURG, 2000. TEL: +27 (0) 11 370-5000
UNITED KINGDOM: CAPITA IRG PLC, BOURNE HOUSE, 34 BECKENHAM ROAD, BECKENHAM,
KENT, BR3 4TU, DX 91750, BECKENHAM WEST. TEL: +44 (0) 208 639-2000.
UNITED STATES ADR DEPOSITARY: BANK OF NEW YORK, ADR DEPARTMENT, 101 BARCLAY
STREET, NEW YORK, NY 10286. TEL: +1 212 815-5800.
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