The condensed consolidated interim financial statements for the quarter and nine months ended June 2024 are prepared in accordance with and contain the information required by IAS 34 Interim Financial Reporting and the SA financial reporting requirements. The accounting policies applied in the preparation of these interim financial statements are consistent with those applied in the previous annual financial statements.

The preparation of these condensed consolidated financial statements was supervised by the Chief Financial Officer, GT Pearce, CA(SA) and were authorised for issue on 08 August 2024.

The results are unaudited.

Reconciliation of EBITDA excluding special items to profit for the period and operating profit excluding special items to operating profit.

Special items cover those items which management believes are material by nature or amount to the operating results and require separate disclosure.

The group’s financial instruments that are measured at fair value on a recurring basis consist of derivative financial instruments and investment funds. These have been categorised in terms of the fair value measurement hierarchy as established by IFRS 13 Fair Value Measurement per the table below.

There have been no transfers of financial assets or financial liabilities between the categories of the fair value hierarchy.

The fair value of all external over-the-counter derivatives is calculated based on the discount rate adjustment technique. The discount rate used is derived from observable rates of return for comparable assets or liabilities traded in the market. The credit risk of the external counterparty is incorporated into the calculation of fair values of financial assets and own credit risk is incorporated in the measurement of financial liabilities. The change in fair value is therefore impacted by the following inputs: the movement of the interest rate curves, by the volatility of the applied credit spreads, and by any changes to the credit profile of the involved parties.

There are no financial assets and liabilities that have been remeasured to fair value on a non-recurring basis.

The carrying amounts of other financial instruments which include cash and cash equivalents, trade and other receivables, certain investments, trade and other payables and current interest-bearing borrowings approximate their fair values.

Since the 2023 financial year-end, the Euro and the ZAR have strengthened and weakened by approximately 1.4% and 3.9% respectively against the US Dollar, the group's presentation currency. This has resulted in an increase of the group's European assets and liabilities and a decrease of the group's South African assets and liabilities, which are held in the aforementioned functional currency, on translation to the presentation currency at period end.

Ordinary shareholders' interest

In March, the group issued 39.5 million ordinary shares amounting to US$58 million to settle the residual ZAR1.2 billion 5.25% Convertible Bonds issued by Sappi's wholly owned subsidiary, Sappi Southern Africa Limited, on 25 November 2020.

Other non-current assets

All remaining members on the South African defined benefit fund were transferred to the provident fund on 28 February 2024. This resulted in a settlement loss of US$2 million (ZAR37 million).

Provisions

Closure costs of US$60 million (€55 million) included in "fire, flood, storm and other events" and restructuring costs of US$140 million (€129 million) included in "Net restructuring provisions" were raised during the year for the closure of our Stockstadt and Lanaken Mills within our European segment.

There has been no material change, by nature or amount, in transactions with related parties since the 2023 financial year-end.

On 15 July 2024, we concluded the sale of the shares in Sappi Lanaken N.V. for €50 million of which €40 million will be paid in cash. The transaction is unconditional and expected to close during October 2024.

During July 2024 numerous fires, driven by extreme weather conditions, were experienced in Sappi's plantations in Mpumalanga and KwaZulu-Natal in South Africa. Approximately 7,500 hectares were burnt at an estimated cost of US$7 million (ZAR130 million).

On 17 July 2024, a fire and subsequent explosion occurred on a supplier's truck at the group's Saiccor Mill resulting in estimated damage and lost profitability of US$5 million (ZAR100 million). The mill was completely shut down for four days.

There has been no significant change to management's estimates in respect of new accounting standards, amendments and interpretations to existing standards that have been published which are not yet effective and which have not yet been adopted by the group.