Sappi Reports Q2 FY2026 Results and Accelerates Strategic Innovation Amid Challenging Global Conditions

Dual-listed global woodfibre and bioeconomy company Sappi today announced its financial results for the quarter ended 31 March 2026, highlighting resilient operational execution and accelerated strategic innovation despite continued macroeconomic and geopolitical uncertainty.

While headline earnings were impacted by an unprecedented global “risk-off” environment and volatile foreign exchange movements, particularly the Rand/US Dollar exchange rate, the company continued to advance initiatives aimed at strengthening long-term competitiveness and enhancing shareholder value.

Key Financial Highlights

• Adjusted EBITDA: US$52 million

• Adjusted EPS: Loss of 8 US cents per share

• Cash on hand: US$192 million

• Available committed undrawn revolving credit facilities: US$632 million

• Sales volumes increased year-on-year, although selling prices declined across all regions

• North American paperboard volumes increased 27% year-on-year, supported by the continued ramp-up of Somerset Mill PM2

Commenting on the quarter, Sappi CEO Steve Binnie said:

“Against a backdrop of continued market uncertainty arising from ongoing trade tensions, escalating geopolitical conflicts, and their broader indirect effects on global macroeconomic conditions, input costs and currency movements, we are adopting a cautious outlook.”

“On this basis, Adjusted EBITDA for the third quarter of FY2026 is likely to be below that of the second quarter of FY2026.”

Regional Performance Overview

South Africa

The South African business delivered steady demand and sales volumes across all segments; however, profitability was negatively impacted by lower selling prices and adverse exchange rate movements.

The pulp segment experienced significant pressure due to lower US Dollar-denominated dissolving wood pulp (DWP) prices combined with Rand volatility.

Containerboard sales volumes remained broadly in line with the prior year, supported by strong agricultural demand and positive forecasts for the 2026 citrus season. However, selling prices declined by 3% amid weak global containerboard market conditions and increased import competition.

Europe

Market conditions in Europe remained difficult due to ongoing macroeconomic weakness and significant oversupply in paper markets.

Despite subdued demand conditions, sales volumes increased by 2% year-on-year. Profitability benefited from stable volumes and continued fixed-cost savings initiatives.

Sappi also confirmed ongoing progress regarding the proposed Joint Venture with UPM, which remains a strategic priority for the business.

The company stated that work is advancing in line with the targeted timeline for signing definitive agreements during the first half of 2026. Completion of the transaction remains subject to regulatory approvals and customary closing conditions, with finalisation anticipated by the end of 2026.

North America

North American profitability improved sequentially compared to the prior quarter but remained below the previous year’s performance.

Results were affected by lower paperboard pricing and a slower-than-expected ramp-up in paperboard sales volumes. Nevertheless, the Somerset Mill PM2 investment continues to gain traction, with management expecting meaningful long-term benefits from the project.

Strategic Reshaping and Long-Term Growth

Sappi continues to execute a strategic transformation focused on strengthening its North American platform and expanding its position within the global bioeconomy.

“With its extensive global footprint, Sappi is a complex organisation to analyse, particularly in a cyclical business influenced by shifting global trade trends,” said Binnie.

“For stakeholders analysing the Sappi results, it is important to remember that Sappi continues a strategic pivot toward its US operations and developments in this market will be key to the long-term value proposition of the group.”

Sustainability and Bioeconomy Leadership

As Sappi marks 90 years as a listed company on the Johannesburg Stock Exchange, the group reaffirmed its commitment to sustainability, innovation, and renewable resource solutions.

The company believes its strong sustainability credentials and diversified bioeconomy platform position it well to navigate evolving global market conditions while continuing to deliver long-term value.