OWN CORRESPONDENT, Johannesburg | Monday 3.20pm.
PAPER and pulp manufacturer Sappi beat market forecasts on Monday with a 93% surge in first-half earnings, boosted by higher global paper prices and tight cost controls in a performance that sent its shares flying.
The global paper and pulp group, which has operations across South Africa, Europe and the United States, also pleased the market with its forecast for ”materially better” earnings in the second half of its financial year compared to the first.
”The results are ahead of most people’s expectations. I don’t think the market is going to be nervous about these,” said Dave Brennan, analyst at Standard Equities.
Reporting for the first time in US dollars exclusively, Sappi, in which Dutch Buhrmann holds a 5,5% interest, said headline earnings per share leapt to 58 US cents for the six months to end-March from 30 US cents from the same period a year before.
Quarter-on-quarter earnings rose to 32 US cents from 26 in the three months to end-December. At the same time, the group made a deep cut into its borrowings, reducing net debt by $485-million to $1.5 billion in the past six months.
First half operating income rose to $292-million from $178-million before on sales of $2,3-billion from $2,1-billion. — Reuters