SA long way from pay equality

PAPER and pulp producer Sappi yesterday reinstated its dividend for the first time since 2008 after it reported profit that nearly doubled for the year to end September.

Sappi shares rose 2.25 percent on the JSE yesterday to close at R76.22.

Its profit increased 91 percent to $319 million (R4.29 billion) from $165m reported last year, while Sappi managed to lower its net debt by 20 percent to $1.41bn or by $363m year on year.

Chief executive Steve Binnie said it would be impossible to pin the results on one aspect of the business. “I am very pleased that the group has delivered another strong performance to build on the momentum created in 2014 and 2015. Significantly, our profit for the year has nearly doubled to $319m and our earnings per share for the year increased by some 68 percent to 57 US cents.”

The board has declared a dividend of US 11 USc per share. The group aims to declare a dividend annually from now on.

Profit Sales revenue decreased to $5.14bn, down from $5.39bn while headline earnings a share came in at US 58c a share, up from US 32c a share as compared with 2015.

Earnings before interest, tax, depreciation and amortisation excluding special items were $739m, an increase of $114m, or 18 percent, as compared with $625m in the previous year.

Operating profit excluding special items for the year was $487m compared with $357m in the prior year. Special items amounted to a gain of $57m, comprised mainly of a plantation fair value gain due to the weaker rand and the resultant increase in local timber prices.

Binnie indicated earlier in the year that he expected the company to produce good results this year. “We trusted the strategy we put in place and our diversity has worked for us,” he said yesterday.

The group has operations in three continents: North America, Europe and southern Africa. The global diversified wood fibre company focuses on providing graphic/ printing papers, packaging and speciality papers and dissolving wood pulp to more than 150 countries.

Binnie said all the regions did extremely well and Sappi was happy with the South African operations. “The persistent drought provided a challenge during the year, but the outlook is different now with the rains coming,” said Binnie.

The company was concerned about the production at Saiccor and was worried that it might report production losses due to the drought conditions in South Africa. The rains in late winter seem to have put those fears to rest.