Sappi reports $20 million quarterly loss amid planned shutdowns

LONGER than expected maintenance shutdowns at two South African pulp mills and an uncertain global economy saw global paper and packaging group Sappi sink into a loss in the second quarter.

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The loss for the three months to March 31 came to $20 million versus a profit of $29m in the quarter to end March last year. Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) was $107m versus $180m in the same period in 2024.

"Challenging market conditions across all segments were driven by heightened uncertainty from potential global trade tensions and a broader economic slowdown, which placed downward pressure on selling prices," CEO Steve Binnie said in an interview with BR.

The forestry fair value price for the quarter was a R307m loss adjustment. Nevertheless, year-on-year sales volumes were stable, with a modest recovery in packaging and speciality paper volumes.

Extended scheduled shutdowns due to additional maintenance in South Africa reduced production in the quarter, which resulted in an additional $13m cost over and above the $45m guidance. These issues were resolved, and the Saiccor and Ngodwana Mills were running well post start-up.