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SAPPI LIMITED - FIRST QUARTER RESULTS ENDED DECEMBER 2004
SAPPI LIMITED
(Registration number 1936/008963/06)
Issuer Code: SAVVI
JSE Code: SAP
ISIN Code: ZAE000006284
FIRST QUARTER RESULTS ENDED DECEMBER 2004
FINANCIAL HIGHLIGHTS
* Headline EPS 6 US cents
* Demand remains strong
* Further price realisation for US coated paper
* Weak US Dollar/Strong Rand
* Usutu asset impairment US$41 million
SUMMARY
Quarter ended
December September December
2004 2004 2003
Sales (US$ million) 1,253 1,235 1,120
Operating profit (US$ million) ** 4 72 0
EBITDA * (US$ million) ** 129 191 114
Operating profit to sales (%) 0.3 5.8 0.0
EBITDA to sales (%) * 10.3 15.5 10.2
Operating profit to average net
assets (%) * 0.3 6.3 0.0
Headline EPS (US cents) * 6 26 (11)
EPS (US cents) (13) 25 (11)
Return on average equity (%) * (5.3) 10.5 (4.9)
Net debt (US$ million) * 1,898 1,584 1,694
Net debt to total
capitalisation (%) * 35.6 31.7 34.7
* Refer to Supplemental Information for the definition of the term
** Operating profit and EBITDA for the quarter ended December 2004 reduced by
US$41 million in respect of asset impairment
COMMENT
Demand for coated paper continued to grow in our major markets in the quarter
supported by strong growth in advertising spending. Apparent consumption of
coated fine paper increased 9.7% in North America and 9.1% in Europe compared
to the same quarter last year. Although apparent consumption in North America
grew strongly year on year it showed a typical seasonal decline, compared to
the September quarter, of 7.5%.
Prices realised by our North American business continued to improve. In Europe,
however, prices did not increase in local currency but reflected a significant
increase in US Dollar terms due to the weakening of the US Dollar.
Pulp prices softened in the early part of the quarter, however, softwood pulp
prices at the end of the period had returned to levels similar to September
2004 and hardwood pulp prices had increased to slightly higher levels than
September 2004. The average price for softwood pulp during the quarter was 9%
below the September quarter and for hardwood was slightly higher.
A number of factors offset the benefits of the improved market conditions. Raw
material input cost pressure continued particularly in respect of wood costs in
North America and energy and energy related costs.
The Rand strengthened a further 5% on average to the US Dollar compared to the
September 2004 quarter, further squeezing the margins of our South African
businesses as a result of lower Rand price realisation and most of the
businesses" costs being incurred in Rands. At quarter end the Rand/Dollar
exchange rate was R5.65, almost 7% stronger than the average for the quarter
and 14% stronger than the end of the prior quarter. It has since lost some
ground and is almost back to the average level of the first quarter. Our
southern African business has done well to offset the near doubling in the
value of the currency since December 2001.
In our 2004 annual report we anticipated that certain of our southern African
operations would incur losses in the new financial year at prevailing exchange
rates. Accounting Standard IAS 36 (AC128) - Impairment of Assets requires us to
evaluate potential impairment of assets using the quarter end exchange rate.
Our Usutu mill reported operating losses in the quarter and is very sensitive
to currency movements. At the very strong quarter end rate of R5.65 to the US
Dollar, the mill does not meet its cost of capital at the period end cost of
capital and projected prices. We have therefore recorded an impairment charge
of US$41 million in the quarter. Plans are in place to improve the mill"s
productivity in the face of the stronger exchange rate. The mill has a valuable
plantation resource and when the currency turns it will have good prospects of
returning to profitability.
As anticipated last quarter, mill shut costs, which amounted to some US$20
million, had a further impact on operating profit in the quarter.
Headline earnings per share was 6 US cents, compared to a loss per share of 11
US cents in the equivalent quarter last year. After the asset impairment charge
the loss per share for the quarter was 13 US cents. The loss in the equivalent
quarter last year included pre-tax charges of US$29 million related to the
closure of a paper machine at Westbrook Mill and staff reduction.
The gain at the operating profit level from the fair value adjustment on
plantations, net after fellings, was US$14 million for the quarter, largely as
a result of wood price increases, compared to US$8 million for the equivalent
quarter last year.
Net finance costs of US$29 million for the quarter were slightly higher than a
year ago. As indicated last quarter, we incurred a US$8 million deferred tax
charge on dividends in the quarter, in terms of the new accounting standard
for Secondary Tax on Companies (STC). The charge is recorded when the annual
dividend is declared. Our STC credits are now recorded as deferred tax assets.
The Usutu asset impairment was not tax effected.
cash flow and debt
Cash generated by operations was US$137 million, 29.2% higher than a year
earlier as a result of improved operating conditions.
Working capital increased by US$149 million in the quarter, mainly as a result
of a seasonal decrease in payables, additional inventory arising from
scheduling problems in North America and the annual prepayment of group
insurance.
Capital expenditure was US$78 million in the quarter representing approximately
72% of the depreciation charge for the quarter. We also paid our equity
contribution of approximately US$60 million to a new Chinese joint venture in
December.
During the quarter a wholly owned subsidiary repurchased 1.25 million Sappi
shares at an average price of US$12.66 per share.
Net debt increased by US$314 million compared to September 2004, of which
US$106 million is due to currency translation. The balance of the increase
relates primarily to the effect of the increase in working capital on cash
utilised. Net debt to total capitalisation increased to 35.6% from 31.7% in
September.
operating review for the quarter
Sappi Fine Paper
Quarter Quarter Quarter
ended ended ended
Dec 2004 Dec 2003 % Sept 2004
US$ million US$ million change US$ million
Sales 1,011 905 11.7 982
Operating profit
(loss) 16 (34) - 26
Operating profit
(loss) to sales (%) 1.6 (3.7) - 2.6
EBITDA 105 51 105.9 112
EBITDA to sales (%) 10.4 5.6 - 11.4
RONOA pa (%) 1.9 (4.2) - 3.2
Our fine paper business continued to have strong order inflow. Its margins,
however, were negatively affected by logistics issues in North America, by low
price realisation, although this is improving in North America, by upward
pressure on input costs and in southern Africa by the strength of the Rand
relative to the US Dollar.
Europe
Quarter Quarter Quarter
ended ended % % ended
Dec 2004 Dec 2003 change change Sept 2004
US$ million US$ million (US$) (Euro) US$ million
Sales 571 518 10.2 2.0 541
Operating profit 28 15 86.7 72.7 23
Operating profit
to sales (%) 4.9 2.9 - - 4.3
EBITDA 78 63 23.8 14.5 70
EBITDA to
sales (%) 13.7 12.2 - - 12.9
RONOA pa (%) 6.2 3.5 - - 5.4
Our European business" total sales volume of 611,000 tons increased only
slightly compared to the prior quarter. Compared with the equivalent quarter
last year our shipments of coated fine paper grades into Europe grew by 7%,
while apparent consumption for the whole market was up 9%. We declined some
business, particularly in export markets, because of low margins.
The margin of operating profit to sales improved slightly in the quarter
compared to the prior quarter despite flat pricing. In large part this is a
result of improved volumes combined with lower purchased pulp costs but offset
by increases in other raw material costs.
We continue to combat rising costs through improving efficiency and product
design optimisation, and are achieving administration cost efficiency through
synergies between certain of our mills.
North America
Quarter Quarter Quarter
ended ended ended
Dec 2004 Dec 2003 % Sept 2004
US$ million US$ million change US$ million
Sales 357 316 13.0 355
Operating loss (15) (54) (72.2) (1)
Operating loss to
sales (%) (4.2) (17.1) - (0.3)
EBITDA 21 (20) - 35
EBITDA to sales (%) 5.9 (6.3) - 9.9
RONOA pa (%) (4.4) (15.3) - (0.3)
Our coated fine paper shipments from US mills grew by 10% in the quarter
compared to a year ago, in line with demand growth. Pulp sales declined in line
with higher internal consumption and as a result of the Somerset pulp mill
outage. Compared to the September quarter our business experienced a seasonal
decline similar to the seasonal apparent consumption decline.
Average prices realised were approximately 9% higher than a year ago partly as
a result of the mix of pulp and paper. Further increases in price realisation
are expected in the second financial quarter.
The benefits of strong market conditions were offset in the quarter by the
anticipated high mill shut costs and high wood, energy and other raw material
costs. The shut and repair costs were approximately US$12 million in the
quarter and the effect of higher prices on wood, energy and other raw material
costs was approximately US$16 million compared to a year ago.
A number of problems relating to scheduling and inventory management manifested
themselves in high delivery costs in the quarter. The issues have been
clearly identified and action plans are in place to reduce these and other
costs. We expect these plans to result in cost reductions of US$30 million in
the balance of the year and we see the potential for reductions at an
annualised run rate of US$50 million by the end of the year, compared to our
first financial quarter.
Fine Paper South Africa
Quarter Quarter Quarter
ended ended % % ended
Dec 2004 Dec 2003 change change Sept 2004
US$ million US$ million (US$) (Rand) US$ million
Sales 83 71 16.9 3.4 86
Operating profit 3 5 (40.0) (47.0) 4
Operating profit
to sales (%) 3.6 7.0 - - 4.7
EBITDA 6 8 (25.0) (33.7) 7
EBITDA to sales (%) 7.2 11.3 - - 8.1
RONOA pa (%) 6.8 13.7 - - 9.7
Our South African fine paper business" sales volume for the quarter increased
8% compared to a year ago. The strength of the Rand continues to result in a
margin squeeze. Nevertheless, our profit improvement projects which include
pricing, material usage and productivity improvements, contributed to a good
performance.
Forest Products
Quarter Quarter Quarter
ended ended % % ended
Dec 2004 Dec 2003 change change Sept 2004
US$ million US$ million (US$) (Rand) US$ million
Sales 242 215 12.6 (0.4) 253
Operating profit
(loss) * (11) 35 - - 46
Operating profit
(loss) to
sales (%) (4.5) 16.3 - - 18.2
EBITDA * 25 64 (60.9) (65.4) 80
EBITDA to sales (%) 10.3 29.8 - - 31.6
RONOA pa (%) (3.2) 12.8 - - 13.8
* Operating profit and EBITDA for the quarter ended December 2004 reduced by
US$41 million in respect of asset impairment
Our Forest Products business performed well despite the massive pressure from
the relative strength of the Rand. Demand for our products in both the southern
African and international markets was strong and our volumes of pulp and paper
sold increased slightly compared to a year ago. Our chemical cellulose business
in particular had strong demand.
Prices realised in local currency terms continue to be impacted by the strength
of the Rand relative to the US Dollar, which continues to squeeze margins.
We have effective programmes to reduce fixed and variable costs. As a result
total costs per ton in local currency were 5.4% below the equivalent quarter
last year.
Usutu Mill, which exports all of its output of unbleached pulp and is
particularly sensitive to currency movements, reported operating losses. At the
December end rate of R5.65 per US Dollar, projections for the mill indicate an
impaired asset. The mill, which has a valuable plantation resource, has plans
in place to improve efficiency and productivity. The recent announcement of the
closure of the Usutu"s second largest competitor representing 5% of the market
for unbleached pulp, is expected to have a favourable impact on operating rates
and therefore the pricing of unbleached pulp.
Outlook
The market outlook for our major products is positive. Demand for coated fine
paper continues to grow on the back of good economic growth and increased
advertising spending in the major markets and on the supply side there is
limited new capacity on the horizon. This positive demand and supply scenario
is leading to higher operating rates, which will support price increases in our
major markets.
We will continue to experience headwinds as a result of a strong Rand relative
to the US Dollar and high energy and other raw material costs including high
wood costs in North America. To counteract these pressures we have active
profit improvement plans in each of our businesses, with a particular focus on
improving the efficiency of our logistics in North America.
Although we are faced with a buoyant Rand and cost increases, we are positive
about the outlook for the balance of this year and we expect our headline
earnings per share for the second financial quarter to be similar to the
earnings per share reported in the equivalent quarter last year.
On behalf of the Board
J C A Leslie D G Wilson
Director Director 31 January 2005
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 ENDED DECEMBER 2004
Group Income Statement
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million % change
Sales 1,253 1,120 11.9
Cost of sales 1,113 995
Gross profit 140 125 12.0
Selling, general and
administrative expenses 93 125
47 -
Other expenses 43 -
Operating profit 4 - 100.0
Net finance costs 29 28
Net paid 28 26
Capitalised - (1)
Net foreign exchange gains (2) (2)
Change in fair value of financial
instruments 3 5
Loss before tax (25) (28) (10.7)
Taxation - current 8 11
- deferred (4) (15)
Net loss (29) (24) 20.8
Loss per share (US cents) (13) (11)
Headline earnings (loss) per share
(US cents) * 6 (11)
Weighted average number of shares
in issue
(millions) 226.0 226.5
Diluted loss per share (US cents) (13) (11)
Diluted headline earnings (loss)
per share (US cents) * 6 (11)
Weighted average number of shares
on fully diluted basis (millions) 227.3 228.4
Calculation of Headline earnings (loss) *
Net loss (29) (24)
Write-off of assets 1 -
Impairment of assets 41 -
Headline earnings (loss) 13 (24)
* Headline earnings (loss) disclosure is required by the JSE Securities
Exchange South Africa.
Group Balance Sheet
Reviewed Reviewed
Dec 2004 Sept 2004
US$ million US$ million
ASSETS
Non-current assets 4,930 4,564
Property, plant and equipment 3,859 3,670
Plantations 637 548
Deferred taxation 78 84
Other non-current assets 356 262
Current assets 1,597 1,580
Cash and cash equivalents 377 484
Trade and other receivables 362 331
Inventories 858 765
Total assets 6,527 6,144
EQUITY AND LIABILITIES
Shareholders" equity
Ordinary shareholders" interest 2,248 2,157
Non-current liabilities 2,551 2,463
Interest-bearing borrowings 1,741 1,693
Deferred taxation 485 453
Other non-current liabilities 325 317
Current liabilities 1,728 1,524
Interest-bearing borrowings 523 364
Bank overdraft 11 11
Taxation payable 134 137
Other current liabilities 992 1,012
Shareholders for dividend 68 -
Total equity and liabilities 6,527 6,144
Number of shares in issue at
balance sheet date (millions) 225.6 226.5
Group Cash Flow Statement
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million
Cash generated by operations 137 106
Movement in working capital (149) (113)
Net finance costs (34) (26)
Taxation paid (27) (15)
Cash utilised in operating activities (73) (48)
Cash effects of investing activities (127) (89)
(200) (137)
Cash effects of financing activities 70 (74)
Net movement in cash and cash equivalents (130) (211)
Group statement of changes in
Shareholders" equity
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million
Balance - beginning of year as reported 2,119 1,945
Change in accounting policy - refer to note 1 38 38
Balance - beginning of year restated 2,157 1,983
Net loss (29) (24)
Foreign currency translation reserve 193 89
Revaluation of derivative instruments 9 2
Dividends paid - US$ 0.30 (2004: US$ 0.29) per
share (68) (66)
Share buybacks net of transfers to participants
of the share purchase trust (14) (11)
Balance - end of period 2,248 1,973
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 2004, except for the new accounting standard AC 501 -
Accounting for "Secondary Tax on Companies (STC)" - which became effective from
the beginning of the current financial year. This has resulted in the
recognition of a deferred tax asset for unused tax credits to the extent that
they will be utilised in the future.
The adoption of the new accounting policy resulted in an increase in
shareholders" equity of US$38 million at September 2004 (September 2003:
increase of US$38 million). The effect on net profit for the current quarter is
a decrease of US$8 million (September 2004 quarter: no effect; December 2003
quarter: decrease of US$3 million). Where appropriate, comparative figures have
been restated.
The preliminary results for the quarter have been reviewed in terms of South
African Auditing Standards by the group"s auditors, Deloitte & Touche. Their
unqualified review report is available for inspection at the company"s
registered offices.
2. Comparative figures
Certain comparative amounts have been reclassified between deferred tax and
current tax.
This had no effect on reported net income or shareholders" equity.
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million
3. Operating profit
Included in operating profit are the following
non-cash items:
Depreciation, amortisation
Depreciation of property, plant and equipment 108 100
Other amortisation 1 -
109 100
Asset impairment 41 -
150 100
Fair value adjustment (gains) on plantations
(included in cost of sales)
Changes in volume
Fellings 16 14
Growth (14) (15)
2 (1)
Changes in fair value (16) (7)
(14) (8)
The above fair value adjustment gains have been
partially offset by silviculture costs 11 9
4. Capital expenditure
Property, plant and equipment 78 83
Reviewed Reviewed
Dec 2004 Sept 2004
US$ million US$ million
5. Capital commitments
Contracted but not provided 65 76
Approved but not contracted 199 198
264 274
6. Contingent liabilities
Guarantees and suretyships 90 68
Other contingent liabilities 12 15
A recent survey has indicated an adverse environmental
condition at our mill in Stanger. At this time we have no
reason to believe that there is a material effect on the
group"s financial position at December 2004.
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 necessarily a measure of sustainable earnings. It is
a listing requirement of the JSE Securities Exchange South Africa to disclose
headline earnings per share
NBSK - Northern Bleached Softwood Kraft pulp. One of the main varieties of
market pulp, mainly produced from spruce trees in Scandinavia, Canada and north
eastern USA. The NBSK is a benchmark widely used in pulp and paper industry for
comparative purposes
* 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
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million
Net loss to EBITDA(1) reconciliation
Net loss (29) (24)
Net finance costs 29 28
Taxation - current 8 11
- deferred (4) (15)
Depreciation 108 100
Amortisation (including fellings) 17 14
EBITDA (1) (3) 129 114
Reviewed Reviewed
Dec 2004 Sept 2004
US$ million US$ million
Net debt (US$ million)(2) 1,898 1,584
Net debt to total capitalisation (%)(2) 35.6 31.7
Net asset value per share (US$)(2) 11.77 11.15
(1) In connection with the U.S. Securities Exchange Commission ("SEC") rules
relating to "Conditions for Use of Non-GAAP Financial Measures", we have
reconciled EBITDA to net profit rather than operating profit.
As a result our definition retains other income/expenses as part of EBITDA.
We use EBITDA as an internal measure of performance and believe it is a useful
and commonly used measure of financial performance in addition to operating
profit and other profitability measures under SA GAAP. EBITDA is not a measure
of performance under SA GAAP. EBITDA should not be construed as an alternative
to operating profit as an indicator of the company"s operations in accordance
with SA GAAP. EBITDA is also presented to assist our shareholders and the
investment community in interpreting our financial results. This financial
measure is regularly used as a means of comparison of companies in our industry
by removing certain differences between companies such as depreciation methods,
financing structures and taxation regimes. Different companies and analysts may
calculate EBITDA differently, so making comparisons among companies on this
basis should be done very carefully.
(2) Refer to Supplemental Information for the definition of the term.
(3) EBITDA for the quarter ended December 2004 reduced by US$ 41 million in
respect of asset impairments.
Supplemental information
Regional information
Quarter Quarter
ended ended
Dec 2004 Dec 2003
Metric tons Metric tons
(000"s) (000"s) % change
Sales
Fine Paper - North America 350 337 3.9
Europe 611 588 3.9
Southern Africa 78 72 8.3
Total 1,039 997 4.2
Forest
Products - Pulp and paper operations 391 384 1.8
Forestry operations 381 317 20.2
Total 1,811 1,698 6.7
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million % change
Sales
Fine Paper - North America 357 316 13.0
Europe 571 518 10.2
Southern Africa 83 71 16.9
Total 1,011 905 11.7
Forest
Products - Pulp and paper operations 222 201 10.4
Forestry operations 20 14 42.9
Total 1,253 1,120 11.9
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003
US$ million US$ million % change
Operating profit
Fine Paper - North America (15) (54) (72.2)
Europe 28 15 86.7
Southern Africa 3 5 (40.0)
Total 16 (34) -
Forest Products * (11) 35 -
Corporate (1) (1) -
Total * 4 - 100.0
Earnings before interest, tax,
depreciation and amortisation charges
Fine Paper - North America 21 (20) -
Europe 78 63 23.8
Southern Africa 6 8 (25.0)
Total 105 51 105.9
Forest Products * 25 64 (60.9)
Corporate (1) (1) -
Total * 129 114 13.2
Net operating assets
Fine Paper - North America 1,347 1,377 (2.2)
Europe 1,932 1,772 9.0
Southern Africa 198 160 23.8
Total 3,477 3,309 5.1
Forest Products 1,480 1,172 26.3
Corporate (79) (81) (2.5)
Total 4,878 4,400 10.9
* Operating profit and EBITDA for the quarter ended December 2004 reduced by
US$ 41 million in respect of asset impairments.
Supplemental Information
Summary Rand Convenience Translation
Reviewed Reviewed
Quarter Quarter
ended ended
Dec 2004 Dec 2003 % change
Sales (ZAR million) 7,599 7,680 (1.1)
Operating profit (ZAR million)** 24 - 100.0
Net loss (ZAR million) (176) (165) 6.7
EBITDA * (ZAR million) ** 782 782 -
Operating profit to sales (%) 0.3 -
EBITDA * to sales (%) 10.3 10.2
Operating profit to average net
assets (%) 0.3 -
EPS (SA cents) (79) (75) 5.3
Headline EPS (SA cents) * 36 (75) -
Net debt (ZAR million) * 10,720 11,511 (6.9)
Net debt to total capitalisation (%) * 35.6 34.7
Cash generated by operations
(ZAR million) 831 727 14.3
Cash utilised in operating activities
(ZAR million) (443) (329) 34.7
Net movement in cash and cash equivalents
(ZAR million) (788) (1,447) (45.5)
* Refer to Supplemental Information for the definition of the term.
** Operating profit and EBITDA for the quarter ended December 2004 reduced by
ZAR247 million in respect of asset impairment
Exchange Rates
Dec Sept June
2004 2004 2004
Exchange rates :
Period end rate: US $1 = ZAR 5.6480 6.4290 6.3224
Average rate for the Quarter: US $1 = ZAR 6.0649 6.3830 6.5953
Average rate for the YTD: US $1 = ZAR 6.0649 6.6824 6.7661
Period end rate: EUR 1 = US$ 1.3456 1.2309 1.2138
Average rate for the Quarter: EUR 1 = US$ 1.2848 1.2233 1.2051
Average rate for the YTD: EUR 1 = US$ 1.2848 1.2152 1.2118
March Dec
2004 2003
Exchange rates :
Period end rate: US $1 = ZAR 6.5738 6.7951
Average rate for the Quarter: US $1 = ZAR 6.8054 6.8569
Average rate for the YTD: US $1 = ZAR 6.8363 6.8569
Period end rate: EUR 1 = US$ 1.2150 1.2410
Average rate for the Quarter: EUR 1 = US$ 1.2497 1.1887
Average rate for the YTD: EUR 1 = US$ 1.2161 1.1887
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: United States United Kingdom:
Computershare Investor ADR Depository: Capita Registrars
Services 2004 (Pty) Limited The Bank of New York The Registry
70 Marshall Street Investor Relations 34 Beckenham Road
Johannesburg 2001 PO Box 11258 Beckenham, Kent
PO Box 61051 Church Street Station BR3 4TU, DX 91750
Marshalltown 2107 New York, NY 10286-1258 Beckenham West
Tel +27 (0)11 370 5000 Tel +1 610 382 7836 Tel +44 (0)208 639 2157
this report is available on the Sappi website
www.sappi.com
Date: 31/01/2005 09:00:31 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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