Third quarter

"Sappi is a global diversified woodfibre company focused on providing dissolving pulp, packaging and speciality papers, graphic papers as well as biomaterials and biochemicals to our direct and indirect customer base across more than 150 countries."

Our dissolving pulp products are used worldwide mainly by converters to create viscose fibre for fashionable clothing and textiles, as well as other consumer products; quality packaging and speciality papers are used in the manufacture of such products as soup sachets, luxury carry bags, cosmetic and confectionery packaging, boxes for agricultural products for export, tissue wadding for household tissue products and casting release papers used by suppliers to the fashion, textiles, automobile and household industries; our market-leading range of graphic papers are used by printers in the production of books, brochures, magazines, catalogues, direct mail and many other print applications; biomaterials include nanocellulose, fibre composites and lignosulphonate; biochemicals include second generation sugars.

The wood and pulp needed for our products are either produced within Sappi or bought from accredited suppliers. Sappi sells almost as much as it buys.

 * For the period ended June 2020.
** As at June 2020.

for the quarter

Severe impact from Covid-19 on profitability

EBITDA excluding special items US$26 million (Q3 2019: US$118 million)

Net debtUS$1,977 million(Q3 2019: US$1,728 million)

Loss for the period (US$73 million) (Q3 2019: Profit of US$8 million)

EBITDA excluding special items
specialities segment more increases 109%

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on the quarter

The overall economic effect of the Covid-19 pandemic and related lockdowns, changes in consumer behaviour and logistical challenges, had a severe impact on the business in the quarter. Previously weak graphic paper and dissolving pulp (DP) markets were further affected by significant declines in demand and lower sales prices. DP and graphic paper sales volumes were 29% and 40% lower respectively. In response, a number of costcontainment initiatives were implemented which, along with a positive currency movement, resulted in fixed costs being US$67 million less than the equivalent quarter last year. Consequently, the group generated EBITDA excluding special items of US$26 million compared to US$118 million in the equivalent quarter last year, which led to a decline in profitability and a loss of US$73 million for the quarter.

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