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SAP - Sappi Limited - Trading Update in Respect of Debt Refinancing and Bond
Issue
SAPPI LIMITED
Registration Number 1936/008963/06
(Incorporated in the Republic of South Africa)
JSE Code: SAP
ISIN: ZAE000006284
NYSE Code: SPP
Announcement
4 April 2011
Trading Update in Respect of Debt Refinancing and Bond Issue
Sappi is issuing this trading update in connection with the capital markets
transaction that it announced today.
We expect demand for coated paper to remain reasonably firm in our major
markets.
Our raw material input costs are gradually increasing as commodity prices rise.
We continue to focus on more efficient procurement and use of our inputs.
In response to rising costs, we announced price increases for coated woodfree
web products in North America and for coated and uncoated woodfree products in
Europe, with effect from March and April 2011.
On 31 March we announced that we would enter into a consultation process with
the employee representatives of Biberist Mill. The aim is to identify ways of
improving the profitability of our European business, which may include the full
closure of Biberist Mill. If the full closure of Biberist Mill were to occur,
Sappi would reduce its coated fine paper capacity by 435,000 tons and its
uncoated fine paper capacity by 65,000 tons.
Our chemical cellulose business is performing strongly and we intend to
accelerate our plans for expanding this business through investment in
additional capacity.
In the second financial quarter of 2011 we expect the group`s operating profit
(excluding special items) to continue the improving trend compared to the
equivalent quarter last year, but to be below that of the first financial
quarter as a result of seasonal factors and the additional accounting week in
the first financial quarter. We expect to generate positive net cash for our
second financial quarter.
Financial statements for the second financial quarter of 2011 are not yet
finalised. The information above is based on certain preliminary financial
data. This information is subject to change as financial data becomes
available, and our financial statements are prepared.
Forward looking statement
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.
The words "believe", "anticipate", "expect", "intend", "estimate", "plan",
"assume", "positioned", "will", "may", "should", "risk" and other similar
expressions, which are predictions of or indicate future events and future
trends, which do not relate to historical matters, identify forward-looking
statements. You should not rely on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors which are in
some cases beyond our control and may cause our actual results, performance or
achievements to differ materially from anticipated future results, performance
or achievements expressed or implied by such forward-looking statements (and
from past results, performance or achievements). Certain factors that may cause
such differences 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, input costs including raw material, energy and
employee costs, and pricing);
- the impact on our business of the global economic downturn;
- unanticipated production disruptions (including as a result of planned or
unexpected power outages);
- changes in environmental, tax and other laws and regulations;
- adverse changes in the markets for our products;
- consequences of our leverage, including as a result of adverse changes in
credit markets that affect our ability to raise capital when needed;
- adverse changes in the political situation and economy in the countries in
which we operate or the effect of governmental efforts to address present
or future economic or social problems;
- the impact of investments, acquisitions and dispositions (including related
financing), any delays, unexpected costs or other problems experienced in
connection with dispositions or with integrating acquisitions and achieving
expected savings and synergies; and
- currency fluctuations.
We undertake no obligation to publicly update or revise any of these
forwardlooking statements, whether to reflect new information or future events
or circumstances or otherwise.
For further information contact:
Robert Hope Andre F Oberholzer
Group Head Strategic Development Group Head Corporate Affairs
Sappi Limited Sappi Limited
Tel +27 (0) 11 407 8492 Tel +27 (0) 11 407 8044
Robert.Hope@sappi.com Mobile +27 (0) 83 235 2973
Andre.Oberholzer@sappi.com
Graeme Wild
Group Investor Relations Manager
Sappi Limited
Tel +27 11 407 8391
Mobile +27 (0) 83 320 8624
Graeme.Wild@sappi.com
Date: 04/04/2011 08:31:01 Supplied by www.sharenet.co.za
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