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Sappi posts improved results for second quarter Sappi Limited (Registration number 1936/008963/06) (Incorporated in the Republic of South Africa) Share code: SAP ISIN: ZAE000006284 ("Sappi" ) Press Release Johannesburg, 10 May 2004 Sappi posts improved results for second quarter Sappi, the world"s leading producer of coated fine paper, today announced results for the second quarter to March 2004. Results highlights Strong demand in Europe US shipments increasing Low price levels for coated paper, however increases announced Strong Forest Products performance despite continued Rand strength Cash generated from operations of US$184 million EPS of 10 US cents for quarter Commenting on the results, Sappi CEO Jonathan Leslie, said: "After three quarters of declining earnings, we have now reversed that trend. The overall improved performance from the previous quarter reflects the coated paper sales volume increases in all regions, particularly Europe. "There is increasing recognition of the value of print in the marketing media mix and during the quarter we launched our "Life with Print" programme, aimed at promoting print as a powerful communications medium to marketing decision makers. "Increased demand for coated fine paper in Western Europe and a reduction in losses in North America despite high costs of wood and energy positively impacted overall results. "The forest products business performed well notwithstanding the strong Rand, particularly our dissolving pulp business which had strong demand and higher Dollar pulp prices. We have taken the first step to increase the output of dissolving pulp by 20,000 tons and we are investigating adding a further 30,000 tons of annual capacity." Looking forward, Leslie said: "Pricing for coated fine paper in both the US and Europe remained low in the quarter, although we believe that we are now at an inflection point in pricing. We are encouraged by what appears to be a turnaround in the advertising cycle and the increase in activity at commercial printers in the USA along with the already positive demand developments in Europe. While facing continued pressure from rising energy costs globally and high wood costs in North America, we nonetheless expect to see a further improvement in our earnings in our third quarter compared to our second quarter." ends The full results announcement is available at www.sappi.com 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. Issued by: Brunswick South Africa on behalf of Sappi Limited Tel + 27 (0)11 268 5750 Fax + 27 (0)11 268 5747 For further information contact: Robert Hope Director Strategic Development Sappi Limited Tel +27 (0)11 407 8492 Robert.Hope@sappi.com Andre F Oberholzer Corporate Affairs and Communication Manager Sappi Limited Tel +27 (0)11 407 8044 Mobile +27 (0)82 906 0638 Andre.Oberholzer@sappi.com Date: 10/05/2004 09:01:03 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
