Sappi Ltd. (SAP), the world’s largest maker of glossy paper, swung to a loss in 2013 as demand fell in its main European markets.
The loss of $161 million for the 12 months through September compared with a profit of $104 million a year ago, the Johannesburg-based company said in a statement today. Sales fell 7 percent to $5.93 billion, it said.
Sappi plans to shut down part of its European operations over a three-year period in order to boost margins and cut costs, resulting in a charge of $190 million during the fourth quarter. The company said results would improve for 2014, helped by the restructuring and commissioning of new plants for specialized cellulose in North America and South Africa.
“Our profitability in the 2014 financial year is expected to be better than that of 2013 as a result of a larger specialized cellulose business,” the company said. A gradual improvement in Europe will be supported by the profitability of southern African and North American paper businesses, it said.
Sappi shares fell 1.5 percent to 29.30 rand by 10:15 a.m. in Johannesburg. The stock has declined 5.1 percent this year, compared with a 17 percent gain in the 165-member FTSE/JSE Africa All Share Index. (JALSH)
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