Our performance in 2009 - Sappi

More documents

Recommendations

Info

2009 annual report 45 This division produces coated woodfree paper, speciality paper and pulp. Approximately 300,000 tons of this pulp is surplus to its own needs, and is sold as market pulp, although other types of pulp are purchased. Compared to fiscal 2008, sales volume dropped by 18% to 1,274,000 tons in 2009 as a result of the significant decrease in economic activity and demand for print advertising in North America. In these circumstances we decided to close our Muskegon Mill which was the smallest and least efficient of our North American coated woodfree mills. The full range of products previously produced at the Muskegon Mill were successfully transitioned to our Somerset and Cloquet Mills. Despite the difficult market environment and the closure of one of our mills, we gained 2% coated woodfree market share compared to fiscal 2008. Average selling price per ton for the business as a whole declined by 5% compared to fiscal 2008 due to the weaker demand for all our products. Our pulp selling prices in this region dropped by US$184 per metric ton or approximately 28% compared to fiscal 2008. 2009 2008 2009 2008 US$ million US$ per ton Variable manufacturing costs Wood 194 202 152 130 Energy 115 156 90 100 Pulp 49 139 38 90 Chemicals 223 266 175 171 Other 108 129 85 83 Delivery costs 123 164 97 106 Total 812 1,056 637 680 Total variable costs decreased by approximately 23% due to the significant amount of curtailment of output during 2009 to align with reduced demand (including the suspension and closure of operations of the Muskegon Mill), and due to reduced variable manufacturing costs per ton. Variable manufacturing costs per ton decreased by 6% in fiscal 2009 compared to fiscal 2008, largely due to decreases in the costs of purchased pulp and energy costs, partially offset by increases in the cost of wood and chemicals. 2009 US$ million 2008 Fixed costs Personnel 243 270 Maintenance 60 70 Depreciation 90 95 Services and administration 82 108 Total 475 543 The impact of our restructuring actions and focus on a reduction of overheads is reflected in the reduction of US$68 million in fixed costs compared to last year. In addition to permanent SG&A restructuring actions during the year, we also ceased operations at our Muskegon Mill. Special items in 2009 of US$55 million consist mainly of US$87 million relating to the alternative fuel tax credit partly offset by US$31 million of restructuring and related costs flowing from the closure of the Muskegon Mill and other restructuring initiatives. our performance
46 Chief financial officer’s report continued Sappi Fine Paper South Africa 2009 2008 2009 2008 Sales volume (metric tons ’000) 305 339 ZAR million ZAR per ton Sales Variable manufacturing and 2,866 2,823 9,397 8,327 delivery costs (2,028) (1,874) (6,649) (5,529) Contribution 838 949 2,748 2,798 Fixed costs Sundry costs and (833) (822) (2,731) (2,425) consolidation entries Operating (loss) profit (14) (82) (47) (240) excluding special items (9) 45 (30) 133 Special items – losses (18) – Operating (loss) profit (27) 45 Our South African fine paper business manufactures coated and uncoated woodfree paper and some of the pulp it requires for own consumption. Although sales volume declined 10% compared to fiscal 2008, we managed to increase our average selling price per ton by 13% to ZAR9,397 per ton and this enabled us to increase sales slightly to ZAR2,866 million in 2009. Selling prices were unfortunately under pressure towards the end of the year due to increased competition from imports as the Rand strengthened against the US Dollar. 2009 2008 2009 2008 ZAR million ZAR per ton Variable manufacturing costs Wood 99 106 325 313 Energy 277 200 908 590 Pulp 730 613 2,393 1,808 Chemicals 443 451 1,452 1,330 Other 302 311 991 919 Delivery costs 177 193 580 569 Total 2,028 1,874 6,649 5,529 Variable costs per ton increased by 20% compared to 2008 mainly due to an increase in energy costs, production problems at our Enstra Mill and the fact that we had to buy in pulp at our Stanger Mill due to the shortage of bagasse during the year (bagasse is waste from the sugar industry and forms the base of the feedstock for our own pulp production at Stanger). 2009 ZAR million 2008 Fixed costs Personnel 429 440 Maintenance 105 102 Depreciation 121 108 Services and administration 178 172 Total 833 822
Page 1 and 2: SAPPI GROUP (Sappi Limited) ANNUAL
Page 3 and 4: • the impact of future investment
Page 5 and 6: Our reporting strategy As a leading
Page 7 and 8: 1 2 North America 2 4 1 San Francis
Page 9 and 10: 4 Our performance in 2009 Financial
Page 11 and 12: 6 Our performance against financial
Page 13 and 14: 8 Our performance against sustainab
Page 15 and 16: 10 Our performance against sustaina
Page 17 and 18: 12 Our performance against sustaina
Page 19 and 20: 14 Our sustainable business cycle T
Page 21 and 22: 16 Our products 1 2 3 Coated paper
Page 23 and 24: Our objectives for 2010 Improve pro
Page 25 and 26: 20 Letter to shareholders continued
Page 27 and 28: 22 Letter to shareholders continued
Page 29 and 30: 24 Interview with Ralph Boëttger,
Page 31 and 32: 26 Our leadership Independent non-e
Page 33 and 34: 28 Our leadership continued Indepen
Page 35 and 36: 30 Review of operations Sappi Fine
Page 37 and 38: 32 Review of operations | Sappi Fin
Page 39 and 40: 34 Review of operations | Sappi Fin
Page 41 and 42: 36 Review of operations Sappi Fores
Page 43 and 44: 38 Review of operations | Sappi For
Page 45 and 46: 40 Value added statement for the ye
Page 47 and 48: 42 Chief financial officer’s repo
Page 49: 44 Chief financial officer’s repo
Page 67 and 68: 62 Five-year review for the year en
Page 69 and 70: 64 Share statistics at September 20
Page 72 and 73: Risk management Global economic con
Page 74 and 75: Risk philosophy The Sappi Limited b
Page 76 and 77: Independence Accountability Given t
Page 78 and 79: Fairness Social responsibility Lege
Page 80 and 81: 2009 annual report 75 Induction and
Page 82 and 83: 2009 annual report 77 employment of
Page 84 and 85: 2009 annual report 79 board to esta
Page 86 and 87: As part of continuous improvement t
Page 88 and 89: Compensation report In 2009, the co
Page 90 and 91: Balance between fixed and variable
Page 92 and 93: Executive directors (1) Details of
Page 94 and 95: 2009 annual report 89 R J Boëttger
Page 96 and 97: 2009 annual report 91 Board Committ
Page 98 and 99: Auditor’s report Independent audi
Page 100 and 101:
Audit committee report The legal re
Page 102 and 103:
Directors’ report for the year en
Page 104 and 105:
Litigation We become involved from
Page 106 and 107:
Group balance sheet at September 20
Page 108 and 109:
Group statement of changes in equit
Page 110 and 111:
Group balance sheet in Rands conven
Page 112 and 113:
Notes to the group annual financial
Page 114 and 115:
• Financial assets and financial
Page 116 and 117:
2.2.10 Non-current assets held for
Page 118 and 119:
(iii) Dividends Dividends are recog
Page 120 and 121:
uyer and seller) multiple used in o
Page 122 and 123:
2.4 Adoption of accounting standard
Page 124 and 125:
Corporate and eliminations Group 20
Page 126 and 127:
2009 annual report US$ million 2009
Page 128 and 129:
6. Taxation (benefit) charge contin
Page 130 and 131:
7. Earnings per share and headline
Page 132 and 133:
2009 annual report 9. Property, pla
Page 134 and 135:
US$ million 2009 annual report 2009
Page 136 and 137:
Page 138 and 139:
13. Joint ventures and associates*
Page 140 and 141:
Page 142 and 143:
16. Trade and other receivables con
Page 144 and 145:
2009 annual report 17. Ordinary sha
Page 146 and 147:
Page 148 and 149:
20. Interest-bearing borrowings con
Page 150 and 151:
2009 annual report 20. Interest-bea
Page 152 and 153:
22. Provisions continued September
Page 154 and 155:
Page 156 and 157:
27. Post-employment benefits - pens
Page 158 and 159:
27. Post-employment benefits - pens
Page 160 and 161:
2009 annual report 2009 2008 27. Po
Page 162 and 163:
2009 annual report 28. Post-employm
Page 164 and 165:
28. Post-employment benefits - othe
Page 166 and 167:
29. Share-based payments continued
Page 168 and 169:
2009 annual report 29. Share-based
Page 170 and 171:
2009 annual report 29. Share-based
Page 172 and 173:
30. Financial instruments continued
Page 174 and 175:
Page 176 and 177:
Page 178 and 179:
2009 annual report 30. Financial in
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186 and 187:
Page 188 and 189:
Page 190 and 191:
Page 192 and 193:
Page 194 and 195:
2009 annual report 31. Related-part
Page 196 and 197:
2009 annual report 33. Environmenta
Page 198 and 199:
Company auditor’s report for the
Page 200 and 201:
Condensed Sappi Limited company bal
Page 202 and 203:
2009 annual report Notes to the con
Page 204 and 205:
Glossary General definitions bleach
Page 206 and 207:
not be comparable with similarly ti
Page 208 and 209:
No issue and/or sale of these share
Page 210 and 211:
Notes Confirmation of appointment o
Page 212 and 213:
Proxy form for annual general meeti
Page 214 and 215:
forward-looking statements Certain
show all

Our performance in 2009 - Sappi

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?