The disappointing results come after a profit of $US221m ($AU237.7m) for the three previous months, and an operating profit of $87m in the third quarter last financial year.

Sappi chief executive Ralph Boëttger said: “Continued upward pressure on input costs remains our biggest challenge in the short term. Further increases are expected in energy, fibre and chemical costs during the fourth quarter.”

The difficult market conditions were highlighted by the fact that the loss came despite a global sales increase of 15.2 per cent to $US1.5bn ($AU1.61bn). However, selling prices in the market were flat quarter-on-quarter and declined from last year.

The company has announced price increases in Europe effective of September 1 of between 8-10 per cent in order to offset the input cost price increases.

Although Sappi said demand remains fairly robust for its products in all regions, it also anticipated the global economical slowdown will impact demand.

In response, the company will continue to focus on cost control, harnessing its buying power through a global procurement drive and by maximising its manufacturing efficiencies. 

It will also continue to increase selling prices, which Boëttger said was “essential to restore and improve profitability”.

The company is expecting its-fourth quarter operating profit, excluding special items, to be lower than the third quarter in light of “unrelenting input cost increases”.

Read the original article at www.printweek.com.

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