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Mondi gets a boost from strong packaging demand
2013-08-09

PackagingDigest

 

Paper and packaging group Mondi has posted a 3% increase in pre-tax profits for the six months to ended 30 June, helped by the benefits of its recent acquisitions and strong demand for packaging paper

 

 

The group also posted a 60% rise in underlying earnings per share (EPS) to €49.4 cents for the six months ended June 2013.

 

Group revenue rose to €3.342bn from €2.819bn. Underlying operating profit was 35% higher at €366m, while cash generated from operations grew 21% to €431m.

 

Pre-tax profit advanced to €229m, compared with a €222m year earlier.

 

The company said its results were helped by acquisitions completed at the end of last year, when it bought corrugated box plants in Germany and the Czech Republic.

 

Mondi also said that packaging paper benefited from increased sales volumes and higher average selling prices compared to both the comparable prior year period, contributing to its profits.

 

Its Consumer Packaging generated underlying operating profit of €39 million with an adjusted ROCE of 10.1%.

 

Containerboard grades

In a statement, the firm added: “Selling price increases were achieved across all containerboard grades during the second quarter. In recycled containerboard, increased competitor capacity in Poland has to date only had a muted effect on markets, while the recently announced capacity closures in the UK (Aylesford Newsprint) have served to improve market fundamentals.”

 

Elsewhere, the company said that industrial bags benefited from good demand from the US and Middle East, offsetting reduced sales volumes in central and western Europe.

 

‘Strategic acquisitions’

Mondi Group chief executive David Hathorn said: “A strong operating performance and benefits derived from our strategic acquisitions completed towards the end of the previous year have enabled Mondi to deliver record financial results despite what remains a challenging economic backdrop.

 

“Looking forward, new industry capacity in the uncoated fine paper segment, coupled with prevailing demand softness in Europe, may impact the supply/demand balance in the short term. Furthermore, the second half will be impacted by the group’s regular annual mill maintenance programmes.

 

“However, with the momentum from the strong first half performance and the expected continuation of a good pricing environment in the packaging grades, management remains confident of delivering in line with its expectations.”

 

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