Sappi slumps 5% after swinging into a loss

Shares in pulp, paper and packaging group Sappi slumped more than 5% on Wednesday after it said a weak global economy and poor demand resulted in a hefty negative profit swing in its first quarter to end-December.

Group sales fell 23% to $1.27 billion (about R24 billion) in the three months to end December, with the company reporting a loss of $126 million, from profit of $190 million previously. It still managed to cut its net debt by 2% to about $1.2 billion, however, it has made this a priority as it seeks to navigate a tough economic climate.

Shares in Sappi, valued at about R24.6 billion on the JSE, were down about 5.2% after the announcement and have fallen by over a fifth in the past year.