Sappi confirms improved Q3 outlook and sees materially stronger Q4 ahead

About the role

Sappi, a South African group, recently published its quarterly results for the third quarter ended 30 June 2026, reporting Adjusted EBITDA of US$53 million. Global market conditions remained challenging, but the quarter reflected progress on key strategic initiatives, including the continued ramp-up of the Somerset Mill PM2 paperboard machine in North America, ongoing cost reduction across the group, and disciplined capital allocation.

Regional performance

• North America: Paperboard sales volumes from Somerset Mill PM2 were up 63% year-on-year, supported by improved operational stability and cost efficiencies. Recent industry paperboard price increases are expected to further support profitability. Demand for dissolving wood pulp (DWP) remained healthy, with pricing strengthening on favourable viscose staple fibre fundamentals, while graphic paper markets continued to face structural demand pressures globally.
• South Africa: Profitability declined compared with the prior year, hit by lower sales volumes and prices, particularly in pulp, alongside a scheduled maintenance shut at Ngodwana Mill. Containerboard demand stayed resilient, supported by strong citrus export activity, while rising low-cost imports continued to pressure local paper markets.
• Europe: Cost reduction and rationalisation initiatives drove improved performance despite weak volumes and the structural decline in graphic papers demand. The proposed graphic papers joint venture with UPM continues to progress through regulatory approval.

Outlook

Sappi expects fourth-quarter FY2026 Adjusted EBITDA to be materially above the third quarter, supported by stronger DWP pricing, continued progress at Somerset Mill PM2, lower maintenance costs, and recent North American paperboard price increases.