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S.Africa's Sappi buys Canadian paper mill, Q3 profit falls
(Adds paper mill acquisition, details)
JOHANNESBURG, Aug 1 (Reuters) - South African paper and pulp
maker Sappi said on Thursday its Canadian division was
buying Matane hardwood pulp mill in Canada to increase pulp
integration and cut costs after reporting a 84% decline in
profit for the third quarter.
The paper company said it would acquire Mantane from
Rayonier Advanced Materials for $175 million. The acquisition
will be financed through internal resources and be concluded by
the end of the year, the company said in a statement.
"The acquisition will increase Sappi's pulp integration for
both its North American and European packaging businesses and
lower Sappi's costs of pulp, reduce its volatility of earnings
throughout the pulp cycle and provide certainty of supply,"
Sappi, whose Europe and North American operations contribute
51% and 25% of sales respectively, said profit fell to $8
million in the quarter from $51 million in the same period last
year, citing challenging market conditions and lower demand for
some paper products.
Third-quarter sales slipped to $1.371 billion from $1.445
billion in the previous year.
Earnings before interest, tax, depreciation and amortization
(EBITDA) fell 24% to $118 million from $155 million in the same
period last year.
The paper company's shares were down 5.04% at 0751 GMT.
(Reporting by Onke Ngcuka, editing by Deepa Babington and David
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