Sappi Ltd S/Adr

And thank you for standing by. Welcome to the SAPI First Quarter2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, 1, 1 on your cell phone keypad. You're going to hear an automatic message advising your hand is raised. To read your question, please press star, 1, and 1 again. Read the advice that this conference has been recorded. I would now like to hand the conference over to our speaker today, Steve Binnie. Theo, please go ahead.

Thank you very much and good day to everybody. Thank you for joining us. I will move through our investor presentation and, as always, call out the page numbers as I go. And just starting on page two, I draw attention to the disclosure on forward-looking statements for you. Moving to slide three. Looking at the overall numbers for our Q1, it's fair to say that these were challenging market conditions with a number of headwinds which had an adverse impact on our earnings and just highlighting a few of these which have the most material impact. Firstly, resolving pulp prices down $160 compared to a year ago, a very material impact, and We've seen this shift in exchange rates linked to a stronger dollar, sorry, a stronger Rand or maybe even more relevant is a weaker dollar, which once again has a major impact on our earnings. On top of that, we've seen as we've gone live with our Somerset Mill PM2 project, We've come to market at a time when paper boat markets are weak in North America, which has meant that our ramp-up has been a bit slower than anticipated. We did have some production issues in North America. These were once-off events, mainly linked to our utilities, and they caused the mill B.Com B.Com B.Com B.Com B.Com B.Com A number of cost-saving initiatives across the group. And on top of that, we did get some energy refunds in Europe, which offset the higher energy costs that do occur during the year. Moving to slide four, which is the Earnings Bridge, comparing last year, quarter one to this year. Obviously this year we had 90 million EBITDA which is lower than we would like it to be as a result of the headwinds that I mentioned and if you reflect on this page overall you can see that pricing is the main story. It's across all segments but in particular BWP it's had a major impact. The volumes actually held up pretty well and we'll talk about that in a little bit more detail We did get savings on costs, variable costs and that's in spite of the, what's included in that is the exchange rate impact on higher costs coming through a number of our costs as you know are denominated in Euros and Rands and when you convert that to Dollars it does have a negative impact. We had under fixed costs we did have the Somerset shut in the quarter coming through and then You have your annual increases as well on labor. So all in all, a substantially lower level than last year due to the headwinds that I described. Moving to slide five, specifically on the major variable costs, the main categories. And I'm not going to talk to all quarters, but in more recent times, you can see that B.Com B.Com B.Com B.Com B.Com B.Com Turning to slide 6, our net debt to adjusted EBITDA development. Because of the lower earnings and the impact of the currencies on our Euro debt, it has meant that our ratio has increased five times. In absolute terms, our net debt is at 1951 million. You can see in spite of the difficult quarters that we're currently experiencing, you can see that we have managed to keep our net debt levels relatively stable over the last two quarters. Moving to slide seven, the maturity profile of our debt and just to call out a few key elements. Firstly, under short-term debt, you can see we've got €183 million reflected there in Europe. And I'm very pleased to say that after quarter end, we did finalize and sign and ultimately the cash has flowed a new €200 million five-year term loan. B.Com B.Com B.Com B.Com B.Com B.Com Our drawings on that is reflected here under the 2027 box, the 117. As I say, pleased to say that that has, we signed a new facility increase from 515 to 550. We've got two additional banks, part of our syndicate, very pleased with that. I think it reflects strong support from our banking partners as we move forward. We did negotiate higher covenants with that, and that maintains our flexibility as we move through these challenging times. Moving to slide eight, the cash flow and capex. Well, firstly, on the B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com As you know, we have a covenant linked to our leverage ratio. The maths on that is slightly different to the published balance sheet numbers that you have. So overall, the ratio came in at 4.9 pounds for the quarter. As I say, that's within the revised covenants that we've negotiated. From a liquidity perspective, I'm very pleased to say that we do have 143 million on hand. We've got RCF facilities that are undrawn of 680 million. So, you know, we believe that that gives us adequate liquidity. And as always, and I think that's emphasized by our achievement to negotiate with the banks. We have very good relationships with our banks. They're longstanding. They understand our business. They know the cyclicality, they know where we are with the current macro challenges and we stay close to them, we ensure that we've got maximum flexibility during this difficult period. The middle block here is what I've already talked about, so I don't intend repeating that. On the right-hand side, you see Strong focus on back-to-basics, evidenced by a reduction in capex that I've talked about, substantially lower than it was last year, obviously, and we've removed any non-essential capex. At the same time, we've got a number of cost-saving initiatives across the group, and we're targeting 120 million for the year. A lot of that's in Europe, but it is across each of the regions. Moving to slide 10, I don't intend going through. This is our five strategy. The pillars are still relevant, and we continue to work across all of them, but it's fair to say that at this point in time, we're laser focused on back to basics and getting B.Com B.Com B.Com B.Com B.Com B.Com Those initiatives are on track. Specifically the consultation processes are now complete where labour has been impacted. At Alfelt we have completed PM1 and PM4 closure and similarly at Kuknimi PM2. Those have been completed now and the benefits from those will start flowing From Q2 onwards. Slide 12 has the joint venture with UPM. Back in December, we did announce this. In repeating everything I said on the results call that we had for this, Other than just to re-emphasize that we're very excited by this transaction. We think it represents a tremendous opportunity and ultimately will lead to reducing our exposure to graphic paper in Europe. We think there are substantial synergy opportunities and it will help reduce debt. B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com We will take that to shareholders. There will be a circular, and we will go on that. But generally, everything on track. The transaction is obviously subject to a number of suspenseful conditions, the biggest one being the approval from competition authorities. We've been engaging with them. It's progressing as expected so far. It's early days. We have teams working on that and we'll update you when we do have progress. We're targeting completing the transaction by the end of 2026. Moving to the segmental and firstly on pulp. Underlying volumes and demand for SAPI's Verve BWP continue to be good and solid. I'm pleased to say that stability in South Africa's production has been good. Production at SAICO's best has been since we completed that expansion project a number of years ago. Operations are stable and we're very pleased with that. B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com So those had a major impact which impacted on the volumes. Packaging on slide 16. Volumes generally okay albeit that North America, the ramp up on PM2 is a little bit slower than we would like it to be. But generally volumes is not the issue. Global packaging markets are under pressure which has affected selling prices in each of our businesses. And that's the main issue at the moment. Specifically in North America, we had the shut so that would impact on profitability in the quarter. And as I said earlier, there was a couple of ones off utility power related incidents in at the two mills in the US which impacted on our B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com I should have mentioned earlier that pricing in North America has been healthy with the tight market conditions following our conversion. Then moving to slide 18, there's a lot of numbers on this page, just very briefly just talking about each of the regions. Europe, as I said earlier, volume is holding up reasonably okay. It's a pricing issue linked to the excess capacity across B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com That's both the evolving pulp and the packaging grade. And then in South Africa, very good volumes. But DWP selling prices dwarfs that performance. And you can see that selling prices overall 12% down on a year ago. On slide 19, just some of our ESG issues. A few to call out. Firstly on the CDP, very pleased with our scores. We've seen an improvement on climate change, an improvement on forests. We're very proud of that. And also very proud of the awards that we, or the recognition that we received from Forbes in terms of being one of the B.Com B.Com B.Com B.Com B.Com B.Com B.Com D.W.P. volumes are okay and robust. So demand is good, but it's a pricing challenge that we currently face. We're doing a lot of work on costs to take costs out of the business to help mitigate some of that impact. And then, you know, moving across to slide 22, strong focus on efficiencies in our back to basics and optimizing working capital, B.Com B.Com B.Com B.Com B.Com B.Com B.Com I do think exchange rates is playing a major role in that because obviously DWP prices are priced in dollars, so I think the fact that the dollar is weaker should help us as well. But taking all of that into account, we anticipate that the adjusted EBITDA for the second quarter will be lower than what we've just reported for the first quarter. So, operator, I've gone through the presentation. I'm going to now hand it back to you for questions.

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 1, 1 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 1 and 1 again. Please compile the Q&A roster. This will take a few moments. And now we're going to take our first question, and it comes from Sean Ungerer from Chronix Research. Your line is open. Please ask your question.

Sean Ungerer Good afternoon, Steve. Can you hear me? Stephen Ungerer Yes, Sean. Sean Ungerer Excellent. Great. And just in terms of a couple of points around guidance, if you don't mind, so obviously there's a $120 million cost savings program flagged, I think with 60 million in Europe roughly. Can you just give a little bit of colour on the split for the balance and then I guess just in terms of cadence across the regions, how we just think about that for the rest of the year. I'll start off with that, thanks.

So your second question, what across the regions?

So 120 million cost-saving programs at a group level. I think you flagged 60 million for Europe specifically already. I'm just trying to understand a little color on the balance, you know, North America and SA. I know, for example, headcount was down in SA in Q4, fixed cost down about 4%. And then just obviously in addition to the split, just to understand like the rollout of those fixed cost savings, how we should sort of think about it maybe quarter by quarter for the rest of the year.

Yeah. Thanks, Sean. I'll let Glen give you the split approximately across the regions. In terms of the split across the year, there was about 30 million in Q1, Glen, right? Right. The balance for the rest of the year is roughly even.

Even over the remaining three quarters, yeah.

Yeah. But maybe the first question you can talk about the regional split.

In terms of the regional, as you rightly pointed out, Sean, the bulk of that is in Europe. It's about a 60-40 split, 60%, 40% split as far as fixed. B.Com B.Com B.Com B.Com B.Com B.Com

So it's about the balance, yes.

Okay, great. Thanks, Steve. And Glen, just to bring you on to the next question, just to understand sort of the defensiveness of the SA business, if the bulk of those cost savings are sort of more Europe and North America, I'm just trying to get a better feel of how SA business, I think around 60% of volumes or capacities dissolve in wood pulp, right? And sort of we're sitting at 805, B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com

Clearly, at these exchange rates and these dissolving pulp prices, our South African profits are under pressure. We are targeting savings and costs, and Glen quoted the numbers. On top of that, we do have initiatives underway, which are not in those numbers, to look for further opportunities, which may help us further. So, you know, in summary, yes, the pressure will be on our South African business, our margins, at these levels. That's fair to say. Graham, I don't know if there's anything you want to add.

Yeah, obviously, proportionally, we have a very big exposure on both exchange rates and the DP price. The combination puts it under enormous pressure. I think the biggest opportunity for us is We have been steadily improving our productivity but I think there's still more that can be done there and that doesn't only give us additional volumes to sell but I think can substantially reduce our variable cost of time and that's what we're working on and that has the most significant leverage. In the short term, very hard to offset that big move in the RAN.

Thanks Graham. And then I've got quite a few more, but I'll just ask one relating to, I guess, Europe and the JV. At face value, I mean, we've seen that industry is going to sort of sit and wait until hopefully the JV closes out, which I'm assuming means there's sort of limited pricing pressure on maybe a six to 12 month view. I don't know if you sort of agree with that. And then I guess secondly linked to that, I mean obviously best-case scenario is that the deal does go ahead. But if it doesn't go ahead, I guess the question is what sort of gearing levels are you happy to have on the balance sheets? And I guess what would be the solution around reducing gearing if the JV doesn't go ahead?

Yeah, yeah. Yeah, look, on pricing, In Europe, as you know, the selling prices have come under pressure in recent quarters. I mean, our focus is obviously to protect those prices and ultimately look for price increases as we move forward. And that's something we're trying to evaluate on an ongoing basis. Marco, anything you want to add on that?

No, this is now a period of time that has been lost for 18 months. So, I think what we're trying to do is, besides the cost reduction Steve spoke about, the capacity reduction or readjustment towards growing areas. B.Com B.Com B.Com B.Com B.Com B.Com It's certainly currently not to be expected that it comes from a dramatically better market situation than what we're seeing right now and for the coming quarter.

Thanks, Marco. To your second question, if Europe doesn't happen, sorry, if our project with UPM doesn't happen, you know, we need to look at all options. There are two aspects to your question. Firstly, on Europe itself, we would need to look at options to reduce our exposure to graphics in time. We would need to look at our asset base. We would need to see if there was other alternatives for exiting some of that capacity. More specifically to your question on gearing, Again, once again, those are options that I'm referring to. We would have to consider ones where we could monetize and try to look at alternatives that can generate cash for us to reduce our debt. So that would be our focus. What I would say is, you're assuming it wouldn't happen at all. Clearly, there are scenarios in the middle that, you know, you want an outright approval, but there could be, you know, there could be scenarios where there's approval with conditions. And, you know, those would be more likely than an outright rejection. And we would need to evaluate that at that point in time.

You're awesome. Thank you.

Thank you so much. And now we're going to take our next question. And the question comes from the line of Brian Morgan from RMB Morgan Stanley. The line is open. Please ask your question.

Thanks very much. If I can just ask a question about balance sheet and stress testing and all of that sort of stuff. If we're in a scenario where in 12 months' time, you know, the RADs still at 16 and DWP still at 805, How does your liquidity situation look? Would we need a capital raise at that stage?

I'll start and then I'll let Glen come in. Once again, I'll point you towards the increased covenant levels that we've negotiated with the banks and the flexibility around that and the strong relationship So that gives us significant flexibility as we move through this, specifically to the capital raising.

So Brian, we've got long-term relationships with our banks, and you've highlighted an issue there in terms of how volatile it is at the moment. We've got an open dialogue with them. We're keeping them abreast of what our forecasts are and we're discussing with them what the progress is. So it's just an ongoing dialogue and we're constantly updating it. Yeah.

So Brian, what we're really saying is that we're not contemplating any capital raising at this point in time.

Okay. And asset sales, are they possible? I mean, you've spoken about the JV, but any additional asset sales outside of that?

Yeah, it's not something we're looking at immediately, but I guess you're talking worst-case scenarios. You know, obviously, we would have options there, but it's not something that we're looking at at the moment. We're focused on, you know, improving what we can control internally. And working closely with our banks to ensure we've got maximum flexibility as we move through these challenging times.

Thanks. Last question, if I may. About $1.9 billion of gross debt, I'm trying to unpack from the numbers, and I'm struggling to do so, just how much of that is subject to covenants? Could you give us a ballpark?

Brian, our RCF is partly pursued with our bonds, so it's all linked to the covenants.

Sorry, what does that mean?

Our RCF is partly pursued with our bonds, and our bonds are all linked to the long-term loans you referred to, so the covenants are linked to Thank you so much. Now we're going to take our next question.

And the question comes from the line of James Twyman from Perseon. Your line is open. Please ask your question.

Thank you very much. So I've got two follow-ups and then one of my own. In terms of the covenants that we've got here, could you just talk around what the new covenant levels are with the banks and how long they are before the covenants go back to maybe the four times B.Com B.Com B.Com B.Com B.Com B.Com And then the third question, if I may, is these energy credits you're getting in Europe are becoming increasingly important. How much visibility do you have on where this goes in future years? I mean, is there a clear method that the EU uses to calculate them and, you know, yeah, how much confidence do we have that this is something that is

Yeah, on the covenant level, we don't get the specific number, but in terms of the levels, there is quite a bit of headroom above where our current debt levels are at. We've negotiated in terms of the new covenant. Once again, we don't give the specific levels, but we've elevated it for a significant period of time. It's not just a couple of quarters. It's for a significant period of time. Glen, do you want to take the cost savings in the other two regions for the remaining 60%? Yeah. B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com

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Glen Thomas Pearce B.Com B.Com B.Com B.Com B.Com B.Com And then your third question, the energy credit. Look, it's a good question. It's not just SAPI. A number of industry players have been getting these credits. And really what they're for is you incur higher energy costs during the year and the various countries in Europe recognize that and they give you a refund. It's been ongoing for some time and by all accounts is expected to increase. Thank you very much. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad.

and wait for a name to be announced. And now we're going to take our next question. And it comes to the line of Brent Muddle from ABSA. Your line is open. Please ask your question.

Yeah, thanks very much. If I could maybe just ask a question around the UPM or the proposed UPM transaction. Are you able to give us an update as to where we are in the process with regards to the JV sourcing funding? Are you able to give us an update on that?

There's nothing new to say other than it's an ongoing process. It's working in parallel. Ultimately, we've appointed lead banks and we've got strong letters of support from them. Thank you very much. Thank you.

Now we're going to take our next question. And the question comes from the line of Bedlev Winkelmann from J.P. Morgan. Your line is open. Please ask your question.

Hi, guys. Just a very quick one on consumer board. Obviously, you're trying to ramp up Somerset into what is quite a weak and oversupplied market right now. And I did pick up that you're looking to or that you've ramped up a bit slower than what you expected. Seemingly, it doesn't look like the oversupply is correcting in any way. So I'm just trying to work out, I suppose, one, how you envisage that ramp-up going in the next, say, I don't know, year, year and a half while this oversupply persists. And then secondly, you know, we have seen some price cuts more recently on SBS. I understand that SBS pricing is a little bit more closer to some of the other substitutable grades. But are we seeing any price pressure in those substitutable grades yet that kind of erodes that benefit for SBS? Thank you very much.

In terms of the ramp up on PM2, there's a number of dimensions which we can talk about and I'll hand over to Mike just now. But just, you know, firstly, we are ramping up. Interestingly, we did have a couple of existing customers that had their own challenge B.Com B.Com B.Com B.Com B.Com B.Com The only thing that I kind of add to that is some of the new products

I've taken a bit longer with qualifications at the customer's plants, and that's specifically when it's some of the smaller customers. We are not seeing erosion in some of the competitive products as of yet. You know, you ask that question. The other thing that we have been doing is expanding geographies, and that has been working B.Com B.Com B.Com B.Com B.Com B.Com B.Com We're also using that tool.

Thank you. And then if I can do one more follow-up, I mean obviously with your ramp-up still ongoing, you mentioned maybe some qualification delays but not necessarily bad demand for your products. I'm curious as to whether the pricing discipline has been maintained or whether you managed So I'll offer what I can.

You know, you're asking me a specific pricing question. That's not something we typically get into the detail on. The price decline in the market happened before PM2 even became B.Com B.Com B.Com B.Com B.Com B.Com B.Com Thank you. And now we're going to take our next question.

And the next question comes from the line of Andrew Jones from UBS. Your line is open. Please ask your question.

Hi, Jones. Thanks for the chance. Actually, I think that left me to that question, but I'd just like to just dig on that a little bit more. Can you just give us some numbers around like your utilization on the mill and how it evolved through the 2025 period at Somerset? Yeah, like, I mean, keep us on some numbers around your expectations for the speed of the ramp going forward. And also just a bit of a follow up in the sort of customers that you're, you're selling into, I mean, I guess, are they buying from European suppliers? Have you seen any impact from tariffs for currency move, etc, in terms of Are those suppliers being pushed out or any change in the import data that you could talk to?

Let me take the second part of your question first. There's no doubt that the tariffs that have been placed on the European importers into the US has helped. Although overall market conditions are generally difficult, The fact that those have been introduced is creating opportunity with potential customers for us. That is a support for us. In terms of the ramp up, as you know, we talked earlier on earlier calls like this that by the time we got to the end of Q4 next year, we will be close to full on the machine. It's fair to say, because of what we've described, we're tracking behind those levels. I can't give you a specific number, but the machine is still, by the time we get to Q4, is going to be significantly fuller than it is currently. It might not be 100, but it will be at substantially higher levels than current levels.

The only thing I'd add to that is when you're starting up a new machine, There's an expected ramp rate that's less than full capacity, and the ramp in our CAPEX was expected to take over three years. The OMEs of the machine are moving forward really well, and the quality of the machine is moving forward really well. Part of our offering into the market is more of a long game with relationships and product attributes that because of the equipment we have, you know, we can bring consistency and other attributes that aren't necessarily engineered into the other competitor's assets. So, lots of work going on. You know, tariffs at time have opened doors for us. That was the other question that he asked.

Thanks, Andrew.

Thank you. Now we're going to take our next question. And it comes from Shubham Agrawal from BlackRock. Your line is open. Please ask your question.

Hey, hi. Can you let me? Yes, we can hear you.

Thank you.

Yeah. So, I have a couple of questions. So, to start with first on RCS, can you help us remind, is the RCS availability fully or do you have some leverage component on that?

So, is that the RCS?

Yes.

Yeah. I think you're asking how much have we utilized? I think it was about 100 million, and we had available 608 at the end of the quarter.

Is the RCA fully available or do you have any leverage? It's fully available. Do you have any restriction? It's fully available. And the second question that I have, on the unplanned disruption that you have seen in the quarter, can you give us some additional detail on that? I understand you have already said on that, but yeah, any additional color would be really helpful.

Sorry, I'm sorry. Disruptions in the quarter. Oh, the disruptions in the, oh, more color, okay. I'll let my, we don't want to go into too much detail, but we have two. The two big mills, Somerset and Cocay, each of the mills ended up with the utilities event. In Somerset, it was a steam supply issue.

That ended up running close to two weeks. That impacted machine performance and costs while we were repairing that. In Cloquet, we had a disruption of the power supply into the mill right at the Christmas time where we ended up with over a week of Thank you. Thank you.

Now we're going to take our next question. And the question comes from Saul Casagio from MNG PLC. Your line is open please ask your question.

Yes, hi. Thanks for taking my question. I just have a couple of really brief ones. Can you give us the spot price of the DWP? I don't have the price data anymore so I was wondering whether you can provide that.

Yeah, today as we speak it's $805 a ton. Okay, okay, thank you.

And the other question is just a clarification because you said the RCF is pari possu with the bonds, which is normally it is seniors versus the bonds. So I was wondering whether there's something specific in the structure

Just to clarify that, there are actually cross-default provisions on that, so the covenants themselves only apply to the RCF and OEQB loan, but in the event that there is a default, then the bonds The bonds then share in para-pursuit on any default, if that clarifies it.

And why is that the case? Because normally banks would try and get a super senior position with the LCF. Why not in this case?

Sorry, is that, could you just repeat that please?

I mean, what I'm saying is It is a bit unusual. Normally the RCF is seen as a priority in case of default, it gets repaid first. But this doesn't seem to be the case in your capital structure. I wasn't aware of this. And yeah, I'm just trying to clarify. Normally the banks can take security ahead of the bonds that they normally do that.

No, it's as I described it.

Yeah, and I guess if there's more clarification, we can take that offline. Okay, okay, thank you.

Thank you. Now we're going to take our next question. And the next question comes from the line of Yandre Petters from , your line is open. Please ask your question.

Hi, thanks for taking my question. Just a few. First one, you've had a bit of working capital releases the last two quarters. Just your expectations for the rest of the year in terms B.Com B.Com B.Com B.Com B.Com B.Com

On the second one, a lot of the impact, as I mentioned when I was going through the deck, aside from the lost production, you have inefficiencies and negative usage on the mills. The approximate impact of these is about 10 million.

Thanks so much. Much appreciated.

Thank you. And now we're going to take our final question for today. And it comes from the line of Raphael Dior from Montpensier, Arbeval. Your line is open. Please ask your question.

Hey, thanks. Do you hear me? Yes. So a couple of questions from me. The first one I just want to understand so you lowered your capex guidance from 290 to 260 for the full year 2026. I wanted to know to what extent you could be lowered and to what are your mandate capex and what is like the level you could not go lower for this year. The second question is for the hardwood DWP prices. It seems that for a certain time in 2023, I think that the prices were also around the 700, 800 and then rebounded. I wanted to know if we should see the 700, 800 prices for DWP as a low level that can only maybe go up. And the last one is I want to understand what changed because you saw Basically, your guidance was for Q1 for the plantations for value adjustment to be positive. In the end, it was negative. So, I think that it means that there was a much higher decline in wood prices in South Africa than what you expected and just maybe what you're seeing about that.

Thank you. Yeah. All right. Firstly, on CAPEX, yeah, we've taken a call. Very close look at our CAPEX labels and as I say we've eliminated anything that we regard as non-essential. You're asking can it go down further? I don't think so. I think that's our best estimate of what the CAPEX will be for the year the 260. The DWP, you are right. Back a couple of years ago, the dissolving pulp price, B.Com B.Com B.Com B.Com B.Com B.Com The conversations, and I'll let Mohamed chat a little bit about it, but all the pricing discussions are around currencies and its impact on currencies. And that's the focus of attention in China at the moment.

Mohamed, maybe you just want to elaborate further. Mohamed El- If just on the currencies, you know, you mentioned B.Com B.Com B.Com B.Com B.Com B.Com B.Com B.Com It's gone from about 7,000, 7,500 renminbi only last year to today around 5,500, just purely because of exchange rates. So that is definitely, I think, providing support and incentive for higher US dollar prices.

Yep. And then I think your last question, you were asking about the plantation fair value adjustment. There was a further negative impact in the quarter. As we move forward for the rest of the year, Glen?

We're anticipating for the rest of the year there's going to be further negative adjustments and that's because it's a rolling four-quarter valuation and you've still got the lower pricing coming through in our fair value adjustment. So you should see further negative adjustments coming through.

Perfect. Thanks. Thank you. There are no further questions for today. I would like to hand the conference over to your speaker, Steve Binnie, for any closing remarks.

Once again, I'd just like to say thank you to everybody for joining us and we look forward This concludes today's conference call. Thank you for participating.

You may now disconnect. Have a nice day.