Sappi Limited (NYSE:SPP): CEO Ralph Boettger commented: “Market conditions remained uncertain as a result of the continued negative sentiment in financial markets. Nevertheless, utilisation levels for our coated paper mills remained at high levels in North America and reasonable levels in Europe. Pulp prices continued to decline during the quarter but stabilised towards the end of the quarter. The coated paper businesses performed in line with expectations in North America and the improvement in Europe reflected the cost reduction and restructuring actions we implemented last year. The performance of the North American segment was unfavourably impacted by lower pulp output, declining pulp prices and weaker demand for casting release products particularly in the Chinese markets.

The chemical cellulose business continued to perform strongly during the quarter, generating almost all of the operating profit excluding special items of the Southern African region for the quarter. The Southern African paper business is proceeding with the restructuring announced last year for which the charges were reported in Q4 of 2011. Group operating profit, excluding special items, has improved for two consecutive quarters coming in at $100M but was below the $137M in the equivalent quarter last year, partly as a result of the additional week in the comparative period. There were no major special items for the quarter, which is in line with our aim to minimise once-off charges or special items during the year ahead other than possible adjustments in plantation fair value. The special item gain of $7M included a plantation fair value adjustment of $3M and profit on the sale of assets of $5M.”

The shares closed at $3.26, down $0.21, or 6.05%, on the day. Its market capitalization is $1.70 billion.

Potash Corp./Saskatchewan (NYSE:POT), CF Industries Hldgs., Inc (NYSE:CF): Relatively quiet spot demand for nitrogen in late 2011 led to a significant decline in prices during the quarter. Prices have rebounded somewhat since the beginning of 2012, with renewed purchases from Pakistan and other markets. We expect pent up demand to continue to emerge in Europe and North America for application on winter wheat and due to expected strong corn area this spring. Brazil imported a record 3 million tonnes of urea in 2011 and demand is expected to be stronger than normal in the first half of 2012 due to a high sugarcane renewal rate and a large second crop of corn.

POT shares closed at $46.46, up $0.47, or 1.02%, on the day. Its market capitalization is $39.90 billion.

CF shares closed at $189.51, up $1.01, or 0.54%, on the day. Its market capitalization is $12.39 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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