Sappi (SAP) Q3 2026 earnings summary

Executive summary

• Adjusted EBITDA for Q3 FY26 was $53 million, reflecting challenging macroeconomic conditions, cost inflation, and adverse currency movements, but supported by improved North American performance and operational efficiencies at Somerset Mill PM2.

• Net loss for the quarter was $181 million, compared to a $33 million loss in the prior year, driven by lower selling prices, adverse currency movements, and a $152 million forestry fair value loss.

• Profitability improved in North America, with record packaging volumes and market share gains, while South African and European results were pressured by currency headwinds, overcapacity, and weak demand.

• Strategic initiatives delivered $120 million in annualized cost savings, with further actions and disciplined capital allocation underway.

• Shareholders approved a 50/50 joint venture for European graphic papers with UPM, expected to close by end of 2026.

Financial highlights

• Revenue for Q3 FY26 was $1,334 million, up slightly from $1,321 million in Q3 FY25.

• Adjusted EBITDA margin for Q3 FY26 was 3.9%–4.0%, down from 6.1% in Q3 FY25.

• Net debt increased to $1,997 million, with a net debt/Adjusted EBITDA ratio of 6.5x.

• Net asset value per share declined to 294 US cents from 406 US cents a year ago.

• Capital expenditure for FY26 is expected at $240 million, below previous guidance.

Outlook and guidance

• Adjusted EBITDA for Q4 FY26 is expected to be materially above Q3, driven by higher dissolving pulp prices, improved North American volumes, and lower maintenance costs.

• Strategic cost-saving initiatives and disciplined capital allocation remain priorities.

• Packaging and speciality paper segments are expected to benefit from price increases and operational momentum.

• DWP segment profitability is supported by healthy VSF market fundamentals and lagged price increases.

• Outlook remains subject to geopolitical uncertainty and global market volatility.