SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of February, 2004
Commission file number: 1-14872
SAPPI LIMITED
(Translation of registrant's name into English)
48 Ameshoff Street
Braamfontein
Johannesburg 2001
REPUBLIC OF SOUTH AFRICA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
---- ----
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes ---- No X
----
If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-
INCORPORATION BY REFERENCE
Sappi Limited's report for the first quarter ended December 2003, furnished by
the Registrant under this Form 6-K is incorporated by reference into the
Registration Statement on Form S-8 of the Registrant (File No. 333-11304) and
the Section 10(a) Prospectus dated April 3, 2001 relating to the offer and
sale of the Registrant's shares to Participants under The Sappi Limited Share
Incentive Scheme. This Form 6-K includes a conformed version of the earnings
announcement sent by the Registrant to its shareholders. This conformed
version was prepared solely for purposes of supplementing the Registrant's
Registration Statement on Form S-8 (File No. 333-11304) and the Section 10(a)
Prospectus dated April 3, 2001.
2
FORWARD-LOOKING STATEMENTS
In order to utilize the "Safe Harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995 (the "Reform Act"), Sappi Limited
(the "Company") is providing the following cautionary statement. Except for
historical information contained herein, statements contained in this Report
on Form 6-K may constitute "forward-looking statements" within the meaning of
the Reform Act. The words "believe", "anticipate", "expect", "intend",
"estimate ", "plan", "assume", "positioned", "will", "may", "should", "risk"
and other similar expressions which are predictions of or indicate future
events and future trends which do not relate to historical matters identify
forward-looking statements. In addition, this Report on Form 6-K may include
forward-looking statements relating to the Company's potential exposure to
various types of market risks, such as interest rate risk, foreign exchange
rate risk and commodity price risk. Reliance should not be placed on
forward-looking statements because they involve known and unknown risks,
uncertainties and other factors which are in some cases beyond the control of
the Company, together with its subsidiaries (the "Group"), and may cause the
actual results, performance or achievements of the Group to differ materially
from anticipated future results, performance or achievements expressed or
implied by such forward-looking statements (and from past results, performance
or achievements). Certain factors that may cause such differences include but
are not limited to: the highly cyclical nature of the pulp and paper industry;
pulp and paper production, production capacity and pricing levels in North
America, Europe, Asia and southern Africa; any major disruption in production
at the Group's key facilities; changes in environmental, tax and other laws
and regulations; adverse changes in the markets for the Group's products; any
delays, unexpected costs or other problems experienced with any business
acquired or to be acquired; consequences of the Group's leverage; adverse
changes in the South African political situation and economy or the effect of
governmental efforts to address present or future economic or social problems;
and the impact of future investments, acquisitions and dispositions (including
the financing of investments and acquisitions) and any delays, unexpected
costs or other problems experienced in connection with dispositions. These and
other risks, uncertainties and factors are discussed in the Company's Annual
Report on Form 20-F and other filings with and submissions to the Securities
and Exchange Commission, including this Report on Form 6-K. Shareholders and
prospective investors are cautioned not to place undue reliance on these
forward-looking statements. These forward-looking statements are made as of
the date of the submission of this Report on Form 6-K and are not intended to
give any assurance as to future results. The Company undertakes no obligation
to publicly update or revise any of these forward-looking statements, whether
to reflect new information or future events or circumstances or otherwise.
3
[GRAPHICS OMITTED]
SAPPI
The word for fine paper
FORM S-8 VERSION
conformed results for the quarter
ended December 2003
[GRAPHICS OMITTED]
4
[GRAPHICS OMITTED]
____________________________________________________________________________
Sappi is the world's leading
producer of coated fine paper
____________________________________________________________________________
Sales by product group*
Coated fine paper 64%
Uncoated fine paper 5%
[Pie Chart Omitted] Coated specialities 8%
Pulp 13%
Commodity paper 9%
Other 1%
Sales: where the product is sold*
Europe 42%
[Pie Chart Omitted] Southern Africa 15%
Asia and other 12%
North America 31%
Sales: where the product is manufactured*
Europe 46%
[Pie Chart Omitted] Southern Africa 26%
North America 28%
Geographic ownership**
Europe & ROW + 15%
[Pie Chart Omitted] Southern Africa 46%
North America 39%
* for the quarter ended December 2003
** as at 31 December 2003
+ Rest of the world
____________________________________________________________________________
5
o Net loss after previously announced charges
o Weak US market
o Strong demand in Europe
o SA businesses profitable despite stronger Rand
SUMMARY
Quarter Quarter Quarter
ended ended ended
Dec Sept** Dec**
2003 2003 2002
-------------------------------------------------------------------------------
Sales (US$ million) 1,120 1,123 1,019
Operating profit (US$ million) - 48 95
Operating profit to sales (%) - 4.3 9.3
EBITDA (US$ million)* 114 115 189
EPS (US cents) (9) 4 22
Headline EPS (US cents)* (9) 11 22
* Refer to notes 1 and 2 of the Supplemental Information for
reconciliations of these numbers and definitions of these terms.
** Restated for South African Generally Accepted Accounting Practice
Standard AC 137
6
COMMENT
The performance of our fine paper businesses was disappointing in the United
States, encouraging in Europe although prices remain weak, and satisfactory in
South Africa. The forest products business experienced strong demand and
performed well notwithstanding the strength of the Rand.
Market conditions in the quarter were very different in our two major fine
paper markets. In Europe apparent consumption of coated fine paper (defined as
shipments plus imports less exports) showed growth of 6% in the quarter
compared to a year earlier. However, prices remain weak. In the United States
the strength of GDP growth did not translate into a recovery in demand for
coated paper. Coated fine paper apparent consumption for the quarter was down
approximately 13% compared to a year earlier and 6% compared to the prior
quarter. Despite the weakening of the US Dollar against the Euro, imports into
the United States for October and November remained at a high level but were
down 2% compared to a year earlier. Prices remained under pressure and in the
case of sheeted product this is reflected in a shift towards lower priced
products, including imports.
As anticipated in our last quarterly results announcement, we took charges in
this quarter in respect of the closure costs of paper machine 14 at the
Westbrook mill (US$15 million pre-tax); staff reduction (US$14 million
pre-tax) and increased costs in connection with major maintenance shuts at all
our North American mills (US$15 million pre-tax higher than last year). These
charges and additional shut costs amount to approximately US$44 million
pre-tax, US$33 million post-tax, and 15 US cents per share.
After these charges and costs we recorded a net loss and headline loss of
US$21 million.
Costs have generally been well controlled but North American wood and energy
costs were US$6 million higher than last year. Selling, General and
Administrative expenses for the quarter were US$125 million, US$48 million
higher than last year, partly as a result of the US$29 million charge for the
Westbrook closure and staff reduction and partly as a result of currency
translation to the weaker US Dollar (US$12 million).
Following the application of the new Agriculture Accounting Standard - AC137
(IFRS 41) in the quarter movements in the fair value of plantations now impact
operating profit. The change had a favourable impact of US$7 million after tax
in the quarter as a result of volume growth and operating efficiencies.
Net finance costs for the quarter were US$28 million compared to US$29 million
last year. They were US$7 million higher than the September quarter as a
result of changes in the fair value of financial instruments.
7
Tax for the quarter was at an effective rate of 25% which is higher than the
expected rate for the balance of the year, as a result of the charges and
losses in the United States.
CASH FLOW
Cash generated by operations remained positive at US$106 million for the
quarter despite weak trading conditions but was 29% lower than the previous
quarter and 40% lower than the same quarter last year.
Working capital increased by US$113 million in the quarter mainly as a result
of lower payables. This movement was significantly lower than the equivalent
quarter last year.
Capital expenditure in the quarter was US$83 million, 83% of depreciation.
We repurchased approximately 1 million of our shares in the quarter at a cost
of US$13 million.
8
OPERATING REVIEW FOR THE QUARTER
SAPPI FINE PAPER
Quarter ended Quarter ended
Dec 2003 Dec 2002 %
US$ million US$ million change
Sales 905 862 5.0
Operating (loss) profit (34) 57 -
Operating (loss) profit to sales (%) (3.7) 6.6 -
Our fine paper business continued to be impacted by low prices and higher
costs in all regions. In the United States this was exacerbated by weak demand
and the high level of imports. Our South African business was faced with
increased competition from imports as a result of the relatively strong
currency. The average exchange rate was R6.86 per US Dollar in the quarter
compared to R9.73 a year earlier.
The highlight of the quarter was improving order levels and sales volumes in
Europe, primarily for the European market.
We are focusing management attention on improving the performance of our North
American business.
Europe
Quarter ended Quarter ended
Dec 2003 Dec 2002 % change % change
US$ million US$ million (US$) (Euros)
Sales 518 434 19.4 0.4
Operating profit 15 39 (61.5) (67.8)
Operating profit to sales (%) 2.9 9.0 - -
Our sales volumes, including exports, increased 12% compared to a year
earlier, reflecting the stronger apparent consumption in Europe.
Price pressure continued in the quarter and average prices realised in Euros
were about 10% below a year earlier. This includes the effect of the
relatively weaker US Dollar on the realised value of exports to the United
States and elsewhere.
9
North America
Quarter ended Quarter ended
Dec 2003 Dec 2002 %
US$ million US$ million change
Sales 316 369 (14.4)
Operating (loss) profit (54) 9 -
Operating (loss) profit to sales (%) (17.1) 2.4 -
There has been no sign of a recovery in our sector in the United States
despite strong economic growth figures. In the past there has generally been a
good but lagging correlation between corporate profits and coated paper
consumption, which we still expect will result in improved consumption of
coated fine paper once market inventories return to normal levels.
The underlying performance of our North American business was unsatisfactory
and the results were further impacted by the charges for the paper machine
closure, staff reduction and increased major shut costs. The closure of the
Westbrook paper machine and transfer of its output proceeded smoothly and we
expect to see the benefits in subsequent quarters.
Sales volume of coated fine paper was 11% lower than last year reflecting
industry conditions. This reduction is emphasised by the strong seasonal
demand in the comparative quarter last year.
Average prices realised for paper were 6% lower than last year and 3% lower
compared to the prior quarter, which includes the effect of a mix-shift to
lower priced products. We have continued to enhance our product offerings and
are in a strong position to meet our customers' requirements and to benefit
from the stronger economy.
Operating costs were influenced by the higher wood and energy costs and this
trend has continued into our second quarter.
10
Fine Paper South Africa
Quarter ended Quarter ended
Dec 2003 Dec 2002 % change % change
US$ million US$ million (US$) (Rands)
Sales 71 59 20.3 (15.2)
Operating profit 5 9 (44.4) (60.8)
Operating profit
to sales (%) 7.0 15.3 - -
Demand in the South African market was firm in the quarter; however, the
strength of the Rand has resulted in increased competition from imports and
downward pressure on prices. This has resulted in a continued squeeze on our
margins.
Forest Products
Quarter ended Quarter ended
Dec 2003 Dec 2002 % change % change
US$ million US$ million (US$) (Rands)
Sales 215 157 36.9 (3.5)
Operating profit 35 37 (5.4) (33.3)
Operating profit to sales
(%) 16.3 23.6 - -
Demand in the local market was firm in the quarter. Our dissolving pulp
business continued to perform well with good demand from the viscose and
acetate markets.
Our total volume of pulp and paper sold increased 14% compared to a year
earlier. Average prices realised were 12% lower in Rands but as a result of
currency translation, significantly higher in US Dollars than a year earlier.
11
OUTLOOK
World economic conditions appear to be improving on a wide front. We are
seeing improved demand in Europe, which we expect to continue.
Our biggest turnaround opportunity remains in the United States where the
paper sector has not yet benefited from the strength of GDP growth.
We expect strong demand to continue for our South African businesses but the
volatility of the Rand continues to play a major role in their profitability.
With no recovery yet discernible in our fine paper business in the United
States, and assuming no marked changes in our other major markets, the next
quarter's earnings are likely to be at a similar level to the last quarter
excluding charges and additional costs. Given the delay in the turnaround it
is now less likely that we will achieve an improvement in earnings for the
full fiscal year compared to 2003, before the paper machine closure and staff
reduction charges.
On behalf of the Board
J C A LESLIE D G WILSON
Director Director 2 February 2004
[GRAPHICS OMITTED]
SAPPI LIMITED
(Registration number 1936/008963/06)
NYSE CODE: SPP
JSE CODE: SAP
ISIN CODE: ZAE 000006284
12
FORWARD-LOOKING STATEMENTS
Certain statements in this release that are neither reported financial results
nor other historical information, are forward-looking statements, including
but not limited to statements that are predictions of or indicate future
earnings, savings, synergies, events, trends, plans or objectives. Undue
reliance should not be placed on such statements because, by their nature,
they are subject to known and unknown risks and uncertainties and can be
affected by other factors, that could cause actual results and company plans
and objectives to differ materially from those expressed or implied in the
forward-looking statements (or from past results). Such risks, uncertainties
and factors include, but are not limited to the highly cyclical nature of the
pulp and paper industry (and the factors that contribute to such cyclicality,
such as levels of demand, production capacity, production and pricing),
adverse changes in the markets for the group's products, consequences of
substantial leverage, changing regulatory requirements, unanticipated
production disruptions, economic and political conditions in international
markets, the impact of investments, acquisitions and dispositions (including
related financing), any delays, unexpected costs or other problems experienced
with integrating acquisitions and achieving expected savings and synergies and
currency fluctuations. The company undertakes no obligation to publicly update
or revise any of these forward-looking statements, whether to reflect new
information or future events or circumstances or otherwise.
13
--------------------------------------------------------------------------------
Conformed financial results for the first
quarter ended December 2003
--------------------------------------------------------------------------------
Form S-8 version
[GRAPHIC OMITTED]
14
-----------------------------------------------------------------------------------------------------
GROUP INCOME STATEMENT
-----------------------------------------------------------------------------------------------------
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million % change
SALES 1,120 1,019 9.9
Cost of sales 995 847
---------------------------------------------
Gross profit 125 172 (27.3)
Selling, general & administrative expenses 125 77
---------------------------------------------
OPERATING PROFIT - 95 (100.0)
Net finance costs 28 29
_____ _____
Net paid |26 | |25 |
Capitalised |(1)| |(1)|
Net foreign exchange (gains) losses |(2)| | 5 |
Change in fair value of financial instruments | 5 | | - |
_____ _____
---------------------------------------------
(LOSS) PROFIT BEFORE TAX (28) 66 -
Taxation - current 8 14
- deferred (15) 1
---------------------------------------------
NET (LOSS) PROFIT (21) 51 -
---------------------------------------------
(LOSS) EARNINGS PER SHARE (US CENTS) (9) 22
Weighted average number of shares
in issue (millions) 226.5 230.1
Diluted (loss) earnings per share (US cents) (9) 22
Weighted average number of shares on
fully diluted basis (millions) 228.4 233.1
15
--------------------------------------------------------------------------------
GROUP BALANCE SHEET
--------------------------------------------------------------------------------
REVIEWED Audited
DEC 2003 Sept 2003
US$ MILLION US$ million
----------------------------------------------------------------------------
ASSETS
NON-CURRENT ASSETS 4,454 4,242
_________ __________
Property, plant and equipment | 3,697 | | 3,554 |
Plantations | 461 | | 432 |
Deferred taxation | 44 | | 41 |
Other non-current assets | 252 | | 215 |
|_________| |__________|
CURRENT ASSETS 1,422 1,575
________ _________
Cash and cash equivalents | 398 | | 584 |
Trade and other receivables | 280 | | 290 |
Inventories | 744 | | 701 |
|________| |_________|
----------------------------------
TOTAL ASSETS 5,876 5,817
----------------------------------
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Ordinary shareholders' interest 1,937 1,945
NON-CURRENT LIABILITIES 2,661 2,541
________ _________
Interest-bearing borrowings | 1,814 | | 1,742 |
Deferred taxation | 527 | | 517 |
Other non-current liabilities | 320 | | 282 |
|________| |_________|
CURRENT LIABILITIES 1,278 1,331
Interest-bearing borrowings and ________ _________
bank overdraft | 278 | | 333 |
Taxation payable | 79 | | 82 |
Other current liabilities | 856 | | 916 |
Shareholders for dividend | 65 | | - |
|________| |_________|
-------------------------------
TOTAL EQUITY AND LIABILITIES 5,876 5,817
-------------------------------
Number of shares in issue at
balance sheet date (millions) 226.1 226.9
16
-------------------------------------------------------------------------------
GROUP CASH FLOW STATEMENT
-------------------------------------------------------------------------------
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million
----------------------------------------------------------------------------------------------
CASH GENERATED BY OPERATIONS 106 178
Movement in working capital (113) (142)
Net finance costs (26) (30)
Taxation paid (15) (5)
-----------------------------
CASH (UTILISED) RETAINED FROM OPERATING ACTIVITIES (48) 1
Cash effects of investing activities (89) (34)
-----------------------------
(137) (33)
Cash effects of financing activities (74) 39
-----------------------------
NET MOVEMENT IN CASH AND CASH EQUIVALENTS (211) 6
-----------------------------
------------------------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
------------------------------------------------------------------------------------------------
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million
-----------------------------------------------------------------------------------------------
Balance - beginning of year 1,958 1,601
Change in accounting policy (13) (4)
-----------------------------
Balance - beginning of year restated 1,945 1,597
Net (loss) profit (21) 51
Foreign currency translation reserve 88 154
Revaluation of derivative instruments 2 (11)
Dividends declared - US$0.29 (2003: US$0.28) per share (66) (65)
Share buybacks net of transfers
to participants of the share purchase trust (11) (5)
-----------------------------
Balance - end of period 1,937 1,721
-----------------------------
17
--------------------------------------------------------------------------------
NOTES TO THE GROUP RESULTS
--------------------------------------------------------------------------------
1. Basis of preparation
The financial statements are prepared in conformity with South African
Statements of Generally Accepted Accounting Practice (SA GAAP). The
preliminary results have been prepared in compliance with AC 127 (Interim
financial reporting) and are based on accounting policies which are
consistent with those used in the annual financial statements. The same
accounting policies have been followed as in the annual financial
statements for September 2003, except for the new agriculture accounting
standard - Agriculture - AC 137 (IAS 41) which became effective during
the period.
The effect on equity for the above change is reflected in the Group
statement of changes in shareholders' equity. The effect on net profit
for the current period is an increase of US$7 million (September 2003
quarter: decrease of US$1 million; December 2002 quarter: decrease of
US$1 million). Where appropriate, comparative figures have been restated.
The preliminary results for the quarter have been reviewed by the group's
auditors, Deloitte & Touche. Their unqualified review report is available
for inspection at the company's registered offices.
2. Comparative figures
Comparative figures have been restated to take into account the effects
of the new agriculture accounting standard which became effective during
the period. The effect on operating profit is the inclusion of the market
value changes in the value of plantations and the expensing of the costs
incurred to establish and maintain plantations (siliviculture costs) and
the amortisation of interest which had been previously capitalised. Net
finance costs have increased. In terms of the new accounting standard,
interest is no longer capitalised to the carrying value of plantations.
The effect on the cash flow statement is a reclassification of
investments in plantations from cash utilised in investing activities to
cash generated by operations. Net cash flows remain the same.
In September 2003, cash and overdraft were restated to gross up amounts
previously set-off. The December 2002 cash flow statement has been
restated to take the effects of this into account.
18
--------------------------------------------------------------------------------
NOTES TO THE GROUP RESULTS (CONTINUED)
--------------------------------------------------------------------------------
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million
----------------------------------------------------------------------------------------------
3. OPERATING PROFIT
Included in operating profit are the
following non-cash items:
Depreciation and amortisation
Depreciation of property, plant and equipment 100 85
Fellings* 14 8
Other amortisation - 1
----------------------------------------------------------------------------------------------
114 94
----------------------------------------------------------------------------------------------
Fair value adjustment on plantations
(included in cost of sales)
Changes in volume (15) (10)
Changes in fair value (7) 1
----------------------------------------------------------------------------------------------
(22) (9)
----------------------------------------------------------------------------------------------
4. CAPITAL EXPENDITURE
Property, plant and equipment 83 38
----------------------------------------------------------------------------------------------
REVIEWED Audited
DEC 2003 Sept 2003
US$ MILLION US$ million
----------------------------------------------------------------------------------------------
5. CAPITAL COMMITMENTS
Contracted but not provided 98 86
Approved but not contracted 200 193
----------------------------------------------------------------------------------------------
298 279
----------------------------------------------------------------------------------------------
6. CONTINGENT LIABILITIES
Guarantees and suretyships 47 47
Other contingent liabilities 24 24
----------------------------------------------------------------------------------------------
* the amount amortised in the income statement representing the standing value
of the plantations harvested
19
--------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million
1. NET (LOSS) PROFIT TO EBITDA* RECONCILIATION
Net (loss) profit (21) 51
Net finance costs 28 29
Taxation - current 8 14
- deferred (15) 1
Depreciation 100 85
Amortisation (including fellings) 14 9
--------------------------------------------------------------------------------
EBITDA* 114 189
================================================================================
* Earnings before interest (net finance costs), tax, depreciation and
amortisation
In connection with the U.S. Securities Exchange Commission ("SEC") rules
relating to "Conditions for Use of Non-GAAP Financial Measures", we have
reconciled EBITDA to net profit rather than operating profit and
recalculated EBITDA to exclude interest (net finance costs), taxes,
depreciation and amortisation (including fellings). As a result our
definition has been amended to retain non-trading profit/loss as part of
EBITDA. The comparative information has been restated to take this into
account. There was no effect on EBITDA in the current and prior year
quarter for the amended definition.
We use EBITDA as an internal measure of performance and believe it is a
useful and commonly used measure of financial performance in addition to
operating profit and other profitability measures under SA GAAP. EBITDA is
not a measure of performance under SA GAAP. EBITDA should not be construed
as an alternative to operating profit as an indicator of the company's
operations in accordance with SA GAAP. EBITDA is also presented to assist
our shareholders and the investment community in interpreting our
financial results. This financial measure is regularly used as a means of
comparison of companies in our industry by removing certain differences
between companies such as depreciation methods, financing structures and
taxation regimes. Different companies and analysts may calculate EBITDA
differently, so making comparisons among companies on this basis should
be done very carefully.
20
--------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million
--------------------------------------------------------------------------------
2. CALCULATION OF HEADLINE EARNINGS
Headline (loss) earnings** (21) 51
Headline earnings per share (US cents) (9) 22
Weighted average number of shares in issue (millions) 226.5 230.1
Diluted headline earnings per share (US cents) (9) 22
Weighted average number of shares on fully
diluted basis (millions) 228.4 233.1
** Headline (loss) earnings disclosure is required by the JSE Securities
Exchange South Africa. The reconciling differences between Net (loss)
profit and Headline (loss) earnings are immaterial.
Dec Sept June March Dec
2003 2003 2003 2003 2002
--------------------------------------------------------------------------------
3. EXCHANGE RATES
Exchange rates:
Period end rate: US$1 = ZAR 6.7951 7.1288 7.4300 7.9550 8.7200
Average rate for the Quarter:
US$1 = ZAR 6.8569 7.3866 7.6305 8.3550 9.7265
Average rate for the YTD:
US$1 = ZAR 6.8569 8.3300 8.6173 9.0866 9.7265
Period end rate: EUR1 = US$ 1.2410 1.1475 1.1417 1.0729 1.0387
Average rate for the Quarter:
EUR1 = US$ 1.1887 1.1328 1.1236 1.0686 0.9995
Average rate for
the YTD: EUR1 = US$ 1.1887 1.0804 1.0655 1.0334 0.9995
The financial results of entities with reporting currencies other than the US
Dollar are translated into US Dollars as follows:
- Assets and liabilities at rates of exchange ruling at period end; and
- Income, expenditure and cash flow items at average exchange rates.
21
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SUPPLEMENTAL INFORMATION
--------------------------------------------------------------------------------
REGIONAL INFORMATION
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
METRIC TONS Metric tons
(000'S) (000's) % change
SALES
Fine Paper - North America 337 368 (8.4)
Europe 588 525 12.0
Southern Africa 72 74 (2.7)
--------------------------------------------------------------------------------
Total 997 967 3.1
Forest Products - Pulp and paper operations 384 337 13.9
Forestry operations 317 298 6.4
--------------------------------------------------------------------------------
Total 1,698 1,602 6.0
--------------------------------------------------------------------------------
REVIEWED Reviewed
QUARTER Quarter
ENDED ended
DEC 2003 Dec 2002
US$ MILLION US$ million % change
--------------------------------------------------------------------------------
SALES
Fine Paper - North America 316 369 (14.4)
Europe 518 434 19.4
Southern Africa 71 59 20.3
--------------------------------------------------------------------------------
Total 905 862 5.0
Forest Products - Pulp and paper operations 201 145 38.6
Forestry operations 14 12 16.7
--------------------------------------------------------------------------------
Total 1,120 1,019 9.9
--------------------------------------------------------------------------------
OPERATING PROFIT
Fine Paper - North America (54) 9 -
Europe 15 39 (61.5)
Southern Africa 5 9 (44.4)
--------------------------------------------------------------------------------
Total (34) 57 -
Forest Products 35 37 (5.4)
Corporate (1) 1 -
--------------------------------------------------------------------------------
Total - 95 (100.0)
--------------------------------------------------------------------------------
22
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SAPPI ORDINARY SHARES
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
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ADR PRICE (NYSE TICKER: SPP) NOTE: (1 ADR = 1 SAPPI SHARE)
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
23
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Transfer Secretaries:
South Africa: United States United Kingdom:
Computershare Limited ADR Depository: Capita Registrars
70 Marshall Street The Bank of New York The Registry
Johannesburg 2001 Investor Relations 34 Beckenham Road
PO Box 61051 PO Box 11258 Beckenham, Kent
Marshalltown 2107 Church Street Station BR3 4TU, DX 91750
Tel +27 (0)11 370-5000 New York, NY 10286-1258 Beckenham West
Tel + 1 610 382 7836 Tel +44 (0)208 639-2157
www.sappi.com
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAPPI LIMITED
by /s/ D.G. Wilson
----------------------------------
Name: D.G. Wilson
Title: Executive Director: Finance
Date: February 19, 2004