Sappi’s return to profitability a result of strong demand recovery, says CFO Glen Pearce
The pulp and paper company reported a profit of $13 million for 2021, after a $135 million loss in 2020.
Sappi has announced a strong recovery after the impact of Covid-19 and a return to profitability for the year ended September 2021. The group had turned a loss of $135 million (about R2.07 billion) in 2020 into a profit of $13 million (about R199 millon) for 2021, with Ebitda increasing by 40 percent over the year.
This is something Sappi CFO Glen Pearce is very proud of. “The increase is a function of a strong demand recovery in the majority of markets we operate in and an increase in selling prices to offset the steep rise in input costs,” he says.
Glen adds that he is also proud of the group’s ability to successfully manage its liquidity through the peak of the pandemic by “proactively approaching funders and agreeing on terms that were acceptable to both parties”.
The group overcame significant challenges posed by Covid-19, but has continued its focus on its Thrive25 strategy.
However, with increasing demands, Glen explains that a new challenge is arising. “The strong demand recovery has placed pressure on supply chains servicing our export markets from South Africa and Europe.”
He says that the group is working at increasing visibility across the supply chain to better inform the company and its customers.
The group is also working on the development and implementation of a long-term digital strategy. “We have been focusing on system and process alignment for the past few years,” Glen says. “We now want to optimise our functional capabilities.”