Wrap Text
SAPPI LIMITED - RESULTS FOR THE 2ND QUARTER AND HALF-YEAR ENDED MARCH 2004
sappi limited
(Registration number 1936/008963/06)
Issuer Code: SAVVI
JSE Code: SAP
ISIN Code: ZAE 000006284
RESULTS FOR THE QUARTER AND HALF-YEAR ENDED
MARCH 2004
Sappi is the world"s leading producer of coated fine paper
* EPS 10 US cents
* Coated paper prices low; increases announced in Europe and North America
* Strong demand in Europe
* US shipments increasing
* Forest Products performance strong despite continued Rand strength
summary
Quarter Quarter Quarter Half-year Half-year
ended ended ended ended ended
March Dec. March ** March March **
2004 2003 2003 2004 2003
Sales (US$ 1,185 1,120 1,095 2,305 2,114
million)
Operating profit 56 - 108 56 203
(US$ million)
EBITDA (US$ 173 114 194 287 383
million) *
Operating profit 4.7 - 9.9 2.4 9.6
to sales (%)
EBITDA to sales 14.6 10.2 17.7 12.5 18.1
(%) *
Operating profit
to average
net assets (%) 4.9 - 10.9 2.5 10.5
Headline EPS (US 10 (9) 25 1 47
cents)
EPS (US cents) 10 (9) 25 1 47
Return on equity 4.7 (4.3) 13.1 0.2 12.7
(%) *
Net debt (US$ 1,753 1,694 1,509 1,753 1,509
million) *
Net debt to 35.6 34.7 34.6 35.6 34.6
total
capitalisation
(%) *
* Refer to Supplemental Information for the definition of the term
** Restated for AC137
comment
The underlying performance for the quarter improved compared to the prior
quarter as a result of a better performance from our European fine paper and
South African forest products businesses and a reduction in the losses from our
North American business.
In North America, commercial printers are starting to show clear signs of a
turnaround in demand for paper, reflecting improvements in the US economy. This
pick-up in consumption was only evident towards the end of the quarter and did
not have a major impact on demand statistics. Shipments of coated fine paper
from US producers were up 3% on the same quarter last year while net imports
fell sharply. Magazine advertising pages were 2% below the equivalent quarter
last year. Demand for coated fine paper in Western Europe continued to show
healthy improvement with apparent consumption for the quarter 6% above the
equivalent quarter last year and total shipments by European manufacturers were
up 8% on the prior year.
Prices in both major markets remained at cyclical lows in the quarter.
Tightening supply conditions only presented the opportunity to announce price
increases for implementation after the end of the reporting period.
Against this background, Sappi"s earnings and headline earnings per share were
10 US cents compared to 25 US cents a year earlier and a loss in the December
quarter, after charges related to a machine closure and additional maintenance
shut costs.
We maintain our focus on costs, which were generally well managed in local
currency terms in the quarter. Costs of wood and energy remain high in North
America. Selling, General and Administrative costs fell from the prior quarter
but were US$24 million higher than last year primarily due to currency (US$10
million) and the US$10 million credit relating to retirement costs reported last
year. The favourable impact of applying the Agriculture Accounting Standard -
AC137 (IAS41) in the quarter compared to applying our previous accounting policy
was US$7 million after tax.
Net finance costs at US$26 million were US$2 million below the December quarter.
Taxation for the quarter was at an effective rate of 23%, which is higher than
the expected rate for the full year.
cash flow and debt
Cash generated by operations increased strongly compared to the December quarter
to US$184 million, a similar level to last year.
Working capital increased by US$31 million mainly as a result of higher
inventories.
Capital expenditure for the quarter was US$84 million, similar to the first
quarter and approximately 82% of depreciation.
Net debt increased by US$59 million during the quarter the annual dividend
payment of US$66 million, was paid in January 2004 and a pension funding payment
of US$19 million was also made in the quarter.
operating review for the quarter
Sappi Fine Paper
Quarter ended Quarter ended
March 2004 March 2003 %
US$ million US$ million change
Sales 967 904 7.0
Operating profit 10 72 (86.1)
Operating profit to sales 1.0 8.0 -
(%)
EBITDA 98 147 (33.3)
EBITDA to sales (%) 10.1 16.3 -
RONOA pa (%) 1.2 9.2 -
Sappi Fine Paper volumes and average prices in Dollar terms both increased;
however, low prices in local currencies and increases in pulp, wood and energy
costs continue to squeeze our margins.
Demand in Europe and South Africa remains good and we are seeing signs of a pick
up, in domestic volumes, in North America.
Europe
Quarter ended Quarter ended
March 2004 March 2003 % change % change
US$ million US$ million (US$) (Euros)
Sales 556 503 10.5 (5.5)
Operating 27 42 (35.7) (45.0)
profit
Operating 4.9 8.3 - -
profit to
sales (%)
EBITDA 77 83 (7.2) (20.7)
EBITDA to 13.8 16.5 - -
sales (%)
RONOA pa (%) 6.1 11.0 - -
Our sales volume has continued to grow and was 3% higher than the equivalent
quarter last year and 4% above the December quarter. Domestic European sales
volumes increased 6% on the prior quarter; but, export volumes to the US, which
are included in Sappi Fine Paper Europe"s total volumes have declined.
Prices in European and overseas markets fell early in the quarter but stabilised
in March. Average prices realised in Euros were 9% below a year earlier and
slightly down on the December quarter.
During the quarter, we announced a price increase of 5% to 7% for coated fine
paper which should become effective in the June quarter.
We have continued to manage our costs effectively and despite the low prices
have achieved an EBITDA to sales margin of 13.8% for the quarter.
North America
Quarter ended Quarter ended
March 2004 March 2003 %
US$ million US$ million change
Sales 339 338 0.3
Operating profit (20) 20 -
Operating profit to sales (5.9) 5.9 -
(%)
EBITDA 15 51 (70.6)
EBITDA to sales (%) 4.4 15.1 -
RONOA pa (%) 5.8 5.4 -
Although our North American business improved on the prior quarter, it still
reported an operating loss in the quarter under review.
Volumes sold were higher than the equivalent quarter last year representing some
gain in share. Volumes were up 7% from the December quarter.
Prices remain at approximately the same low level as in the December quarter. As
a result of improving operating rates and order backlogs, we have announced a
price increase of US$50 per ton on certain coated fine paper sheets and increase
of US$60 per ton uncoated fine paper web products which becomes effective in
June.
Costs of wood and energy continue to impact profitability and remain at high
levels. These costs were US$9 million above the same quarter last year and US$3
million higher than the prior quarter.
South Africa
Quarter ended Quarter ended
March 2004 March 2003 % change % change
US$ million US$ million (US$) (Rands)
Sales 72 63 14.3 (6.9)
Operating 3 10 (70.0) (75.6)
profit
Operating 4.2 15.9 - -
profit to
sales (%)
EBITDA 6 13 (53.8) (62.4)
EBITDA to 8.3 20.6 - -
sales (%)
RONOA pa (%) 7.4 33.3 - -
The performance of our South African fine paper business was affected by low
prices resulting from increased competition and the strong Rand. There are some
signs that growing demand in Asia will absorb greater volumes and therefore
reduce import pressure.
Sappi Forest Products
Quarter ended Quarter ended
March 2004 March 2003 % change % change
US$ million US$ million (US$) (Rands)
Sales 218 191 14.1 (7.0)
Operating 48 33 45.5 18.5
profit
Operating
profit
to sales (%) 22.0 17.3 - -
EBITDA 77 44 75.0 42.5
EBITDA to 35.3 23.0 - -
sales (%)
RONOA pa (%) 15.4 14.4 - -
Demand for our pulp and packaging paper was firm during the quarter. Our paper
exports were lower as a result of the strong Rand and newsprint sales were lower
as customers adjusted inventories.
Demand for dissolving pulp produced by our Saiccor mill remains strong. Saiccor
has a world-class cost position and is taking a number of steps to increase
capacity through de-bottlenecking projects. The first step, which is already
underway, will increase output by 20,000 tons based on the current product mix.
Further plans are being investigated to add an additional 30,000 tons of
capacity.
Pulp prices have continued to increase with average NBSK prices for the quarter
up US$ 35 per ton on the previous quarter and have partly offset the impact of
the strong Rand on our pricing.
outlook
We are seeing signs of a turnaround in profitability for coated fine paper.
Advertising spending in Europe is growing, as is apparent consumption of coated
fine paper, which bodes well for the price increases currently being introduced.
Imports of coated fine paper to the US from Asia and Europe have declined partly
as a result of improved demand in those regions and partly as a result of less
attractive price realisations.
US domestic shipments have strengthened and order backlogs are increasing. The
combination of these factors and signs of improved printer activity will support
the announced price increases. However, these coated paper price increases in
North America are not expected to have a major impact on our results until the
fourth fiscal quarter.
Pulp prices continue to strengthen, which will support the performance of our
Forest Products business.
We will have to absorb the costs of two major maintenance shuts next quarter at
our Cloquet and Ngodwana mills. In addition to this, we face continued pressure
from rising energy costs globally and high wood costs in North America.
Overall, market developments are encouraging and with rising price trends, we
expect to see a further improvement in our earnings in our third quarter
compared to the second quarter.
On behalf of the Board
J C A Leslie D G Wilson
Director Director 10 May 2004
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 quarter and half-year ended March 2004
group income statement
Reviewe Reviewed Reviewed Reviewed
d
Quarter Quarter Half-year Half-year
ended ended ended ended
Mar Mar 2003 Mar 2004 Mar 2003
2004
US$ US$ % US$ US$ %
million million change million million change
Sales 1,185 1,095 8.2 2,305 2,114 9.0
Cost of sales 1,030 913 2,025 1,760
Gross profit 155 182 (14.8) 280 354 (20.9)
Selling, 99 75 224 152
general &
administrative
expenses
56 107 56 202
Other income - 1 - 1
Operating 56 108 (48.1) 56 203 (72.4)
profit
Net finance 26 32 54 61
costs
Net Paid 26 29 52 54
Capitalised - - (1) (1)
Net foreign (4) 3 (6) 8
exchange
(gains) losses
Change in fair 4 - 9 -
value of
financial
instruments
Profit before 30 76 (60.5) 2 142 (98.6)
tax
Taxation 10 17 18 31
- current
- deferred (3) 1 (18) 2
Net profit 23 58 (60.3) 2 109 (98.2)
Earnings per 10 25 1 47
share (US
cents)
Headline 10 25 1 47
earnings per
share (US cents)
*
Weighted average 226.1 229.4 226.3 229.8
number of shares
in issue
(millions)
Diluted earnings 10 25 1 47
per share (US
cents)
Diluted headline 10 25 1 47
earnings per
share (US cents)
*
Weighted average 228.3 232.1 228.4 232.5
number of shares
on fully diluted
basis (millions)
Calculation of
Headline
earnings *
Net profit 23 58 2 109
Profit on - (1) - (1)
disposal of
business and
property, plant
& equipment
Mill closure - 1 - 1
costs
Headline 23 58 2 109
earnings
* Headline earnings disclosure is required by the JSE Securities Exchange South
Africa.
group balance sheet
Reviewed Audited
March 2004 Sept 2003
US$ million US$ million
ASSETS
Non-current assets 4,501 4,242
Property, plant and equipment 3,679 3,554
Plantations 491 432
Deferred taxation 51 41
Other non-current assets 280 215
Current assets 1,373 1,575
Cash and cash equivalents 332 584
Trade and other receivables 265 290
Inventories 776 701
Total assets 5,874 5,817
EQUITY AND LIABILITIES
Shareholders" equity
Ordinary shareholders" interest 1,991 1,945
Non-current liabilities 2,506 2,541
Interest-bearing borrowings 1,652 1,742
Deferred taxation 537 517
Other non-current liabilities 317 282
Current liabilities 1,377 1,331
Interest-bearing borrowings and bank 433 333
overdraft
Taxation payable 85 82
Other current liabilities 859 916
Total equity and liabilities 5,874 5,817
Number of shares in issue at balance 226.2 226.9
sheet date (millions)
group cash flow statement
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March 2004 March 2003 March 2004 March 2003
US$ million US$ million US$ million US$ million
Cash generated 184 195 290 373
by operations
Movement in (31) (23) (144) (165)
working
capital
Net finance (26) (31) (52) (61)
costs
Taxation (4) 30 (19) 25
(paid)
recovered
Dividents paid (66) (65) (66) (65)
Cash retained 57 106 9 107
from operating
activities
Cash effects (96) (58) (185) (92)
of investing
activities
(39) 48 (176) 15
Cash effects (25) (36) (99) 3
of financing
activities
Net movement (64) 12 (275) 18
in cash and
cash
equivalents
group statement of changes in shareholders" equity
Reviewed Reviewed
Half-year Half-year
ended ended
March 2004 March 2003
US$ million US$ million
Balance - beginning of year 1,958 1,601
Change in accounting policy (13) (4)
Balance - beginning of year restated 1,945 1,597
Net profit 2 109
Foreign currency translation reserve 128 224
Revaluation of derivative instruments (7) (17)
Dividends declared - US$ 0.29 (2003: US$ (66) (65)
0.28) per share
Share buybacks net of transfers to (11) (19)
participants of the share purchase trust
Balance - end of period 1,991 1,829
notes to the group results
1. Basis of preparation
The annual financial statements are prepared in conformity with South African
Statements of Generally Accepted Accounting Practice (SA GAAP). These quarterly
results have been prepared in compliance with AC 127 (Interim financial
reporting) and are based on accounting policies which are consistent with those
used in the annual financial statements. The same accounting policies have been
followed as in the annual financial statements for September 2003, except for
the new agriculture accounting standard - Agriculture - AC 137 (IAS 41) which
became effective from the beginning of the current financial year.
The effect on equity for the above change is reflected in the Group statement of
changes in shareholders" equity. The effect on net profit for the current
quarter is an increase of US$7 million, net of US$3 million tax (December 2003
quarter: increase of US$7 million, net of US$3 million tax; March 2003 quarter:
minimal impact) and an increase of US$14 million, net of US$6 million tax for
the half-year end (March 2003: a decrease of US$1 million, net of US$1 million
tax). Where appropriate, comparative figures have been restated.
The preliminary results for the quarter have been reviewed by the group"s
auditors, Deloitte & Touche. Their unqualified review report is available for
inspection at the company"s registered offices.
2. Comparative figures
Comparative figures have been restated to take into account the effects of the
new agriculture accounting standard which became effective from the beginning of
the current financial year. The effect on operating profit is the inclusion of
the fair value changes in the value of plantations and the expensing of the
costs incurred to establish and maintain plantations (silviculture costs) and
the amortisation of interest which had been previously capitalised. Net finance
costs have increased. In terms of the new accounting standard, interest is no
longer capitalised to the carrying value of plantations.
The effect on the cash flow statement is a reclassification of investments in
plantations from cash utilised in investing activities to cash generated by
operations. Net cash flows remain the same.
Operating profit has been restated to take into account the requirements of
circular 3/2004 issued by the South African Institute of Chartered Accountants.
Previously non-trading (profit) loss items were excluded from operating profit.
The impact of the inclusion is an increase in operating profit of US$1 million
for the quarter and half-year ended March 2003.
In September 2003, cash and overdraft were restated to gross up amounts
previously set-off. The March 2003 cash flow statement has been restated to take
the effects of this into account.
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended ended ended
March March March March
2004 2003 2004 2003
US$ million US$ million US$ million US$ million
3. Operating
profit
Included in
operating
profit are the
following non-
cash items:
Depreciation
and
amortisation
Depreciation 103 85 203 170
of property,
plant and
equipment
Fellings 13 1 27 9
Other 1 - 1 1
amortisation
117 86 231 180
Fair value
adjustment
(gains) on
plantations
(included in
cost of sales)
Changes in (13) (10) (28) (20)
volume
Changes in (17) (2) (24) (1)
fair value
(30) (12) (52) (21)
4. Capital
expenditure
Property, 84 62 167 100
plant and
equipment
Reviewed Audited
March 2004 Sept 2003
US$ million US$ million
5. Capital
commitments
Contracted but 101 86
not provided
Approved but 174 193
not contracted
275 279
6. Contingent
liabilities
Guarantees and 49 47
suretyships
Other 25 24
contingent
liabilities
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 interest (net finance costs),tax, depreciation and
amortisation
* EBITDA to sales - EBITDA divided by sales
Fellings - the amount charged against the income statement representing the
standing value 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 neccessarily 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 the 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 2004 March 2003 March 2004 March 2003
US$ million US$ million US$ million US$ million
Net profit to
EBITDA *
reconciliation
Net profit 23 58 2 109
Net finance 26 32 54 61
costs
Taxation - 10 17 18 31
current
- deferred (3) 1 (18) 2
Depreciation 103 85 203 170
Amortisation 14 1 28 10
(including
fellings)
EBITDA * 173 194 287 383
Reviewed Audited
March 2004 Sept 2003
US$ million US$ million
Net debt (US$ million) ** 1,753 1,491
Net debt to total capitalisation (%) ** 35.6 30.9
Net asset value per share (US$) ** 10.95 10.67
* In connection with the US Securities Exchange Commission ("SEC") rules
relating to "Conditions for Use of Non-GAAP Financial Measures", we have
reconciled EBITDA to net profit rather than operating profit and recalculated
EBITDA to exclude interest (net finance costs),taxes, depreciation and
amortisation (including fellings). As a result our definition has been amended
to retain other income/expenses (previously non-trading profit/loss) as part of
EBITDA. The comparative information has been restated to take this into account.
The effect on EBITDA for the amended definition is an increase of US$1m for the
quarter and half-year ended March 2003. There was no impact on the current
quarter and half-year ended March 2004.
We use EBITDA as an internal measure of performance and believe it is a useful
and commonly used measure of financial performance in addition to operating
profit and other profitability measures under SA GAAP. EBITDA is not a measure
of performance under SA GAAP. EBITDA should not be construed as an alternative
to operating profit as an indicator of the company"s operations in accordance
with SA GAAP. EBITDA is also presented to assist our shareholders and the
investment community in interpreting our financial results. This financial
measure is regularly used as a means of comparison of companies in our industry
by removing certain differences between companies such as depreciation methods,
financing structures and taxation regimes. Different companies and analysts may
calculate EBITDA differently, so making comparisons among companies on this
basis should be done very carefully.
** Refer to page 15, Supplemental Information for the definition of the term.
regional information
Reviewed Reviewed
Quarter Quarter
ended ended
March 2004 March 2003
Metric tons Metric tons %
Sales (000"s) (000"s) change
Fine Paper - North America 362 343 5.5
Europe 611 592 3.2
Southern Africa 74 69 7.2
Total 1,047 1,004 4.3
Forest Products - Pulp and paper
operations 373 395 (5.6)
Forestry operations 341 309 10.4
Total 1,761 1,708 3.1
Reviewed Reviewed
Half-year Half-year
ended ended
March 2004 March 2003
Metric tons Metric tons %
Sales (000"s) (000"s) change
Fine Paper - North America 699 711 (1.7)
Europe 1,199 1,117 7.3
Southern Africa 146 143 2.1
Total 2,044 1,971 3.7
Forest Products - Pulp and paper
operations 757 732 3.4
Forestry operations 658 607 8.4
Total 3,459 3,310 4.5
Reviewed Reviewed
Quarter Quarter
ended ended
March 2004 March 2003 %
US$ million US$ million change
Sales
Fine Paper - North America 339 338 0.3
Europe 556 503 10.5
Southern Africa 72 63 14.3
Total 967 904 7.0
Forest Products Pulp and paper
-
operations 203 178 14.0
Forestry 15 13 15.4
operations
Total 1,185 1,095 8.2
Operating
profit
Fine Paper - North America (20) 20 -
Europe 27 42 (35.7)
Southern Africa 3 10 (70.0)
Total 10 72 (86.1)
Forest Products 48 33 45.5
Corporate (2) 3 -
Total 56 108 (48.1)
Earnings before
interest, tax,
depreciation
and
amortisation
charges
Fine Paper - North America 15 51 (70.6)
Europe 77 83 (7.2)
Southern Africa 6 13 (53.8)
Total 98 147 (33.3)
Forest Products 77 44 75.0
Corporate (2) 3 -
Total 173 194 (10.8)
Net operating
assets
Fine Paper - North America 1,396 1,458 (4.3)
Europe 1,742 1,560 11.7
Southern Africa 166 130 27.7
Total 3,304 3,148 5.0
Forest Products 1,283 946 35.6
Corporate (40) (49) 18.4
Total 4,547 4,045 12.4
Reviewed Reviewed
Half-year Half-year
ended ended
March 2004 March 2003 %
US$ million US$ million change
Sales
Fine Paper - North America 655 707 (7.4)
Europe 1,074 937 14.6
Southern Africa 143 122 17.2
Total 1,872 1,766 6.0
Forest Products Pulp and paper
-
operations 404 323 25.1
Forestry 29 25 16.0
operations
Total 2,305 2,114 9.0
Operating
profit
Fine Paper - North America (74) 29 -
Europe 42 81 (48.1)
Southern Africa 8 19 (57.9)
Total (24) 129 -
Forest Products 83 70 18.6
Corporate (3) 4 -
Total 56 203 (72.4)
Earnings before
interest, tax,
depreciation
and
amortisation
charges
Fine Paper - North America (5) 91 -
Europe 140 165 (15.2)
Southern Africa 14 24 (41.7)
Total 149 280 (46.8)
Forest Products 141 99 42.4
Corporate (3) 4 -
Total 287 383 (25.1)
Net operating
assets
Fine Paper - North America 1,396 1,458 (4.3)
Europe 1,742 1,560 11.7
Southern Africa 166 130 27.7
Total 3,304 3,148 5.0
Forest Products 1,283 946 35.6
Corporate (40) (49) 18.4
Total 4,547 4,045 12.4
summary rand convenience translation
Reviewed Reviewed Reviewed Reviewed
Quarter Quarter Half-year Half-year
ended ended % ended ended %
Mar 2004 Mar 2003 change Mar 2004 Mar 2003 change
Sales (ZAR 8,064 9,149 (11.9) 15,758 19,209
million) (18.0)
Operating 381 902 383 1,845
profit (ZAR (57.8) (79.2)
million)
Net profit 157 485 (67.6) 14 990 (98.6)
(ZAR million)
EBITDA * (ZAR 1,177 1,621 1,962 3,480
million) (27.4) (43.6)
Operating 4.7 9.9 2.4 9.6
profit to
sales (%)
EBITDA * to 14.6 17.7 12.5 18.1
sales (%)
Operating 5.0 10.9 2.5 10.4
profit to
average net
assets (%)
EPS (SA cents) 68 209 (67.5) 7 427 (98.4)
Headline EPS 68 209 (67.5) 7 427 (98.4)
(SA cents) *
Net debt (ZAR 11,524 12,004 (4.0)
million) *
Net debt to 35.6 34.6
total
capitalisation
(%) *
Cash generated 1,252 1,629 1,983 3,389
by operations (23.1) (41.5)
(ZAR million)
Cash retained 388 886 (56.2) 62 972 (93.6)
from operating
activities
(ZAR million)
Net movement (436) 100 - (1,880) 164 -
in cash and
cash
equivalents
(ZAR million)
* Refer to Supplemental Information for the definition of the term.
exchange rates
March Dec Sept June March
2004 2003 2003 2003 2003
Exchange rates:
Period end rate: 6.5738 6.7951 7.1288 7.4300 7.9550
US$1 = ZAR
Average rate for
the Quarter:
US$1 = ZAR 6.8054 6.8569 7.3866 7.6305 8.3550
Average rate for
the YTD:
US$1 = ZAR 6.8363 6.8569 8.3300 8.6173 9.0866
Period end rate: 1.2150 1.2410 1.1475 1.1417 1.0729
EUR1 = US$
Average rate for
the Quarter:
EUR1 = US$ 1.2497 1.1887 1.1328 1.1236 1.0686
Average rate for 1.2161 1.1887 1.0804 1.0655 1.0334
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.
Other interested parties can obtain printed copies of this report from:
South Africa:
Computershare Limited
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
Tel +27 (0)11 370-5000
United States
ADR Depository:
The Bank of New York
Investor Relations
PO Box 11258
Church Street Station
New York, NY 10286-1258
Tel +1 610 382 7836
United Kingdom:
Capita Registrars
The Registry
34 Beckenham Road
Beckenham, Kent
BR3 4TU, DX 91750 Beckenham West
Tel +44 (0)208 639-2157
this report is available on the Sappi website - www.sappi.com
Date: 10/05/2004 09:00:31 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
Sharenet Sites 
