CEO Steve Binnie said he was very pleased with the group’s return to profitability for the year and praised the “dedication and resilience of the Sappi team in turning a loss of $135m in 2020 into a profit of $13m for 2021”.

In the year to 31 September, sales rose from $4.6bn to $5.3bn, while EBITDA excluding special items rose by 41% to $532m. Net debt was largely unchanged at $1.9bn.

The group said that while the quicker than anticipated business bounce back as the various global lockdowns eased was welcomed, the resulting global container shortages, port congestion and the resulting freight price increases were less so and resulted in a delivery backlog of 100,000 tonnes of dissolved pulp.

While this combined with increased global demand for raw materials and rising raw material prices impacted the group across the board, in Q4 this had largely been offset by a strong performance by its US business, which generates 28% of sales, and higher pulp prices.

In its results commentary, the group said: “Graphic paper demand continued to recover and, combined with industry capacity closures, ensured the market balance in Europe and North America was restored to healthy levels.

“However, profitability in Europe remained a challenge due to inflationary cost pressures. Low industry inventory levels and longer delivery lead times linked to the global supply chain challenges provided support for price increases during the quarter.”

The European market accounts for almost half of the group’s revenue.

Sappi, like its peers has implemented a series of price increases throughout the year, most recently an energy specific surcharge.

Looking ahead, Binnie said the group remained “encouraged by the growing resilience of global economies” as the pandemic evolves but highlighted that supply chain challenges, and the “extraordinary energy cost inflation” may impact its profitability.