Sappi’s share price fell 5.37% to R40.69 yesterday despite the pulp and paper products group indicating it was on track to report a profitable 2014 financial year, as lingering debt worried the market. The group has made $67m profit in the first three quarters of its 2014 financial year, from a $161m loss last year. In its third quarter ended June, Sappi’s net profit was $17m, the company reported yesterday. Abdul Davids, Kagiso Asset Management research head, said Sappi’s $2.3bn net debt is “stubbornly high and the deleveraging is taking longer than management’s guidance”.
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