Aug 04, 2011. /Lesprom Network/. Sappi sales for the 3Q were $1.8 billion, an increase of 12% in US dollar terms compared to the 3Q 2010 and at a similar level to the quarter ended March. Average prices realised in US Dollar terms were 16% higher than a year ago. Excluding the effect of translation from Euro and Rand to a relatively weaker US Dollar, average prices in local currencies increased 5%., as the company said in a press release received by Lesprom Network. Commenting on the results, Sappi CEO Ralph Boettger said: "Operating profit for the quarter was impacted as expected by planned annual maintenance shuts at a number of our major pulp mills and seasonal factors. In addition, weaker than expected demand for coated woodfree paper in Europe resulting from continuing uncertainty in economic conditions unfavourably affected operating profit. For the nine months operating profit excluding special items was more than 50% higher than the equivalent period last year.” "High input costs remained a challenge in each of our businesses and are reflected in an increase in variable costs per ton of 18%. In local currency terms variable costs per ton increased 6% compared to the equivalent quarter last year. In order to reduce the impact of high raw material prices we continue to seek innovations with regard to the sourcing and the use of raw materials,” Ralph Boettger added. Operating profit excluding special items for the quarter was $60 million compared to $75 million in the equivalent quarter last year. Special items of $6 million for the quarter included a plantation fair value adjustment and Black Economic Empowerment charges. Net finance costs for the quarter include breakage costs and the accelerated amortisation of fees of $43 million in connection with the debt restructuring completed during the quarter in order to extend debt maturities and reduce future finance costs. “We expect quarterly net finance costs of approximately $60 million after the refinancing. Cash generated from operations for the quarter was $148 million, compared to $188 million in the equivalent quarter last year. Capital expenditure was $69 million for the quarter and $161 million year-to-date. We expect the full year capital expenditure to be less than $250 million. Net debt increased to $2.47 billion as a result of net cash utilised in the quarter of $20 million, the cash effects of financing activities and a currency movement and fair value impact of $43 million, compared to March 2011. Liquidity remained strong with cash on hand of $362 million and the undrawn committed revolving credit facility of Euro 350 million ($508 million), at quarter end,” Ralph Boettger said. Sappi produces coated fine paper widely used in books, brochures, magazines, catalogues and many other print applications.