Mondi earnings in line as market conditions improve
By Josh White
Date: Friday 03 May 2024
(Sharecast News) - Paper and packaging company Mondi reported improved market conditions in its first quarter on Friday, resulting in stronger order books and increased sales volumes across a range of paper grades compared to the prior quarter.
The FTSE 100 firm said it experienced a solid performance in downstream converting operations.
Although average selling prices were lower than in the fourth quarter of 2023, recently-announced paper price increases were expected to positively impact the second quarter.
Costs remained stable compared to the prior quarter.
Underlying EBITDA for the three months ended 31 March stood at €214m, in line with expectations, despite a one-off €32m loss incurred due to the devaluation of the Egyptian pound.
In the corrugated packaging segment, containerboard sales volumes were higher than in the fourth quarter of 2023, and corrugated solutions maintained a stable performance.
Flexible packaging saw significant sales volume growth, although that was offset by lower average selling prices.
Uncoated fine paper experienced the benefits of price increases implemented during the quarter, although a decline in forestry fair value gain affected comparative performance.
During the quarter, Mondi distributed a special dividend of €1.60 per share to shareholders, representing the net proceeds from the sale of all Russian assets.
It also completed a share consolidation, with shareholders receiving 10 new ordinary shares for every 11 existing shares held.
"Market demand has continued to improve in the first quarter of the year, with stronger order books leading to higher sales volumes across our range of paper grades," said chief executive officer Andrew King.
"While we entered the year with lower selling prices compared to the prior year, improvements in demand have supported our initiatives to increase selling prices across the business.
"We remain well positioned to benefit from this growing demand with our strong operational leverage, broad product offering and organic growth investment projects, which remain on track and on budget."
Reporting by Josh White for Sharecast.com.
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