The companies grappling with Dezemba blues and headaches

Some South African companies are grappling with significant pressures because their acquisition timing was off or they hung on to bad assets too long

- 

As we get close to the end of 2025 and contemplate what 2026 could look like, we find no shortage of listed companies that have Dezemba-strength headaches. The specifics vary, but it usually comes down to the same thing: companies being hurt by assets they either should not have acquired or should not have held on to for so long. Let's begin with a particularly tough industry: paper.

Sappi's European nightmare Sappi's share price is trading in line with levels seen in 2009, 2011, 2013 and 2020. In other words, if you're looking for a company with a share price that heads consistently up, you should move right along from Sappi.

This is a cyclical stock that will eat you up and spit you out if you get the timing wrong. If you get your timing right, though, you can double your money in the space of a few years. Such is the risk-reward trade-off.

Sadly, 2025 has been more about the risk than the reward. The share price is down 50% year to date as Sappi has found itself at an ugly point in the cycle with a vulnerable balance sheet. The challenge for these cyclical stocks is that trying to time their capex correctly is really difficult. There's a long lead time for capex, and by the time a particular programme has been completed, the world has probably changed.

To add to these challenges, Sappi operates in a sector that features structural weaknesses in certain products. Paper isn't nearly as appealing as it once was, which means Sappi is constantly on a treadmill where nothing is easy and cost efficiencies need to be found each year.