Van As said results had been hit by the global economic slowdown and also by 30-month maintenance shutdowns at two of the groups largest operations in the US and South Africa. The reduction of 250,000 metric tonnes was the largest Sappi has ever recorded.

"Despite this, our European and Southern African operations continue to hold up well, and our balance sheet continues to be in good shape," said van As.

Sappis sales fell 25% to 591m ($832m).

"There are signs that the US situation has bottomed out, and we believe there is significant potential for a rebound later in the year," added van As.

With customer inventories low both in Europe and North America, van As said Sappi was well positioned to take advantage of any upturn in demand.

One-time adjustment costs for refinancing and the closure of Sappis Transcript carbonless paper mill in Scotland hit net profits, which fell 73% to 16m.

Van As said Sappis strategy had not changed, and that the group would continue to look for operations that would benefit and add to its core business sectors.

A committee has also been appointed by the board to evaluate a potential successor to van As, who will retire at the end of the year, although he will continue in the role of non-executive chairman. An announcement is expected in the middle of the year.

Story by Andy Scott