Select Sappi Q3 Report 2023

Highlights for the quarter

• EBITDA excluding special items US$106 million (Q3 FY22: US$371 million)
• Net debt of US$1,176 million (Q3 FY22: US$1,530 million)
• Profit for the period US$40 million (Q3 FY22: US$199 million)
• EPS excluding special items 5 US cents (Q3 FY22: 39 US cents)

The group faced persistent challenges in the global economy and encountered ongoing weakness in paper and pulp markets, leading to a reduction in EBITDA to US$106 million for the quarter ended June 2023. Specifically, the paper businesses experienced a significant downstream destocking cycle. Customers reduced their inventories in anticipation of lower prices, thereby affecting demand. In response, we proactively curtailed excess production in Europe and North America, implemented various cost-saving initiatives across our operations, and applied measures to optimise working capital. The profitability of the South African business was more stable, bolstered by the dissolving pulp business. Despite the challenging economic environment, we generated cash in the quarter and liquidity in the group remained strong.