Sappi expects a full-year profit as demand picks up and cost-cutting bears fruit

Paper and packaging group Sappi expects to post a year-end profit as demand for its products continues to improve and cost-cutting bear fruit.

The group reported on Thursday that it booked a $29 million (R537 million) profit in its second quarter to end-March, though this was down 58% year-on-year. It still made a half-year loss of $97 million, from a profit of $259 million previously.

After a record year in 2022, customers whittled away stocks built up in fear of shortages during Covid-19. Along with unpredictable paper markets and pressure on consumers, sales volumes for many of its major products came under severe pressure in 2023, with Sappi responding by curtailing production to manage the weak demand.