Reported:    --  Global economic downturn/ weak demand impacted operating profitability   --  Continued production curtailment   --  Basic loss per share of 7 US cents   --  Positive cash generation   --  Acquisition synergies on track     Summary                                       Quarter ended        Half-year ended                                March     March     Dec.   March     March                                 2009      2008     2008    2009      2008    Key figures: (US$ million)    Sales                       1,313     1,473    1,187   2,500     2,850    Operating profit                6       221       57      63       312       Special items        - (gains) *               (23)     (124)     (32)    (55)     (123)       Operating (loss) profit        excluding special        items                     (17)       97       25       8       189       EBITDA excluding        special items *            82       190      106     188       378    Basic EPS (US cents)           (7)       43        6      (3)       54       Net debt * (excluding        rights offer cash in        Dec 08)                 2,735     2,661    2,497   2,735     2,661    Key ratios (%)    Operating profit to sales     0.5      15.0      4.8     2.5      11.0       Operating (loss) profit        excluding special        items to sales           (1.3)      6.6      2.1     0.3       6.6       Operating (loss) profit        excluding special        items to Capital        Employed (ROCE)*         (1.6)      9.0      2.6     0.4       9.0       EBITDA excluding        special items to sales    6.2      12.9      8.9     7.5      13.3       Return on average        equity (ROE) (%) *       (7.5)     35.9      5.3    (1.4)     22.6       Net debt to total        capitalisation *        (excluding rights        offer Cash in Dec 08)    59.4      61.3     57.3    59.4      61.3     * Refer to the published results for details on special items, the   definition of the terms, the reconciliation of profit / loss for the   period to EBITDA excluding special items and the revision of comparative   figures in accordance with IAS33 to reflect the impact of the rights   offer.    The table presented above has not been audited or reviewed.    The quarter under review   Commenting on the results, Sappi chief executive Ralph Boettger said:  

"The quarter was characterised by a sharp decline in our sales volumes, which was driven by declines in demand for coated paper and pulp in our major markets. Average prices realised by the group in the quarter were 6% lower in US dollar terms than a year ago mainly as a result of the sharp fall in pulp prices, which fell 32% relative to a year earlier. Prices realised for coated paper were higher than in the corresponding quarter a year ago. We curtailed production extensively in each of our regions during the quarter to match supply with demand and reduce inventories. Raw material, in particular pulp, and energy prices were lower in the quarter compared to the prior quarter and corresponding quarter last year. This had some effect on costs in the quarter; however, we expect that a greater effect on costs will be apparent in our third quarter now that higher cost inventories have been depleted.

Net cash generated (excluding cash invested in the Acquisition) was US$75 million for the quarter compared to an outflow of US$108 million a year ago.

Our liquidity situation is soundly managed. At March Sappi had cash and cash equivalents of US$711 million and undrawn commitments under the revolving credit facility of US$266 million. We do not have any major borrowings maturing in the next 12 months.