Sappi record profits in the fourth quarter

Profits surged due to stronger seasonal demand

{reg}South Africa-based Sappi recorded profits in all of its operations in the fourth quarter of the financial year (July-September 2015), reports Business Day Live. The increase in profits was mainly due to strong market demand and improved market for graphic paper and dissolving wood pulp, as compared to the third quarter.

The company recorded an operating profit of USD 136 million in the fourth quarter.  Profits increased by 22 percent year-on-year to USD 83 million due to lower interest cost on debts.

"Obviously, that doesnÔÇÖt happen overnight. We have reduced costs and lowered debt and interest costs," said Steve Binnie, CEO of the company. Meanwhile, the company also likely to invest in an expansion plan to improve the existing mill capacity in South Africa.

Strong demand for containerboard combined with cost control helped the company's South African packaging business to improve. The company expects its costs to fall further due to completion of major capital projects in Europe and North America.{/reg}