Sappi annual loss widens to USD 747m; lenders extend covenant suspension to June 2027
Sappi's net loss for the year to end-September 2026 widened to USD 747m from USD 177m, as weak demand in several paper grades, the stronger rand and cost inflation weighed on earnings. Adjusted EBITDA fell 41% to USD 294m and net debt rose to USD 2.05bn; lenders extended the suspension of covenant testing on its revolving credit facility and bank term debt from March 2027 to June 2027 and agreed revised leverage thresholds for the period after. The shares fell 13.66% to USD 0.68 (ZAR 11.25) on 6 November, valuing the group at about USD 0.4bn (ZAR 6.9bn).
Why this mattersThe result shows currency and demand pressure squeezing a core pulp and paper producer hard enough to force fresh covenant relief from lenders.
- Annual net loss widened to USD 747m from USD 177m for the year to end-September 2026
- Adjusted EBITDA fell 41% to USD 294m
- Net debt rose to USD 2.05bn from USD 1.92bn a year earlier
- Lenders extended the suspension of covenant testing on the international revolving credit facility and bank term debt, previously due to expire in March 2027, to June 2027
- Shares closed 13.66% lower at USD 0.68 (ZAR 11.25) on 6 November, the steepest fall since August 2019, valuing Sappi at about USD 0.4bn (ZAR 6.9bn)
- Sappi and UPM submitted remedy proposals to the European Commission on 4 November for their proposed graphic papers joint venture; Sappi expects a decision in early January 2027
Sources
Business Day