Sappi reports a slow 2004

9 November 2004 – Johannesburg (RSA): Sappi, a leading producer of coated fine paper, has posted a profitable Q4 amid dim views for fiscal 2005.

The Johannesburg-based company reported sales of $1.235 billion for the quarter, up from $1.123 billion in the Q4 of 2003.

Its Q4 operating profit rose to $72 million, or EPS of $0.26, from $17 million, or EPS of $0.11, in the same period last year. Earnings were helped by a tax credit of $0.06 EPS and a gain of $0.04 EPS for an accounting change, the company said.

However, operating profit for the year declined from $272 million in 2003 to $188 million in 2004.

The company warned that figures for its Q1 would likely show a loss as a result of rising energy and raw material costs, down time at its mills due to maintenance, and a new South African accounting standard. "This will make it difficult for us to achieve positive earnings in Q1," it said.