Monday, November 29, 2021
Sappi announces positive financial recovery after pandemic impact and releases report for the fourth quarter and full year. Sappi Chief Executive Officer, Steve Binnie, said: “I am very pleased with Sappi’s strong recovery and our return to profitability for the year. I wish to recognise the dedication and resilience of the Sappi team in turning a loss of US$135 million in 2020 into a profit of US$13 million for 2021, with EBITDA increasing by 40% over the prior year. The team overcame significant challenges posed by COVID-19. The cooperation, cross-regional support and continued focus on our Thrive25 strategy were exemplary.”
As COVID-19 lockdowns eased and economic activity resumed, global trade rebounded much faster than initially anticipated. The requirement for shipping surged, which triggered vessel and container shortages, severe port congestion and significant freight rate increases. The logistical disruptions described above severely constrained our export sales in all regions. By year-end, this resulted in a backlog of deliveries of 100,000 tons of DP. The impact on earnings from this backlog amounted to approximately US$30 million.
Furthermore, high demand for raw materials and commodities, coupled with long lead times and an inability to restock inventories, fuelled worldwide inflationary pressures. To mitigate the impact of these rising costs, we implemented a series of price increases in our paper businesses.
Financial summary for the quarter and full year
Earnings per share excluding special items for the quarter were 11 US cents, which substantially improved the 5 US cents in the prior quarter and was indicative of the group’s profitability recovery.