13th May 2015 06:47
LONDON (Alliance News) - Mondi PLC Wednesday reported a 29% increase in operating profit excluding exceptional items in the first quarter of 2015, driven by higher volumes and lower input costs across most of Europe, strong contributions from capital projects and acquisitions, and higher selling prices in Russia and South Africa.
The paper company said its underlying operating profit in the three months to end-March, which excludes what it terms as special items, was EUR236 million, up from EUR183 million a year earlier, and up 9% from EUR216 million in the fourth quarter of 2014.
It said it was buoyed by lower costs for wood, paper for recycling, resin, energy and chemicals, and also got a boost from the strengthening of the Us dollar against the euro. However, it cautioned that it expects input costs to rise going forward, as the recent recovery in the oil price lifts the cost of energy, resin and chemicals.
Mondi said average selling prices in Europe for all key paper grades were broadly in line with those in the previous quarter and, with the exception of recycled containerboard, also in line with the comparable prior year period. Average benchmark recycled containerboard prices were around 6% lower than the first quarter of 2014. However, on a like-for-like basis, sales volumes were up across most businesses on both the comparable prior year period and the previous quarter.
"Much depends on the macroeconomic environment. However, given the group's robust business model and clear strategic focus, management remains confident of continuing to deliver industry leading performance and making good progress for the year," the company said.
It expects to book a special item of EUR35 million after it said it would close a consumer packaging plant in Spain and a small kraft paper mill in Finland and restructure the recently-acquired US Bags business.
Mondi also completed the scheduled maintenance shut of the Richards Bay mill in South Africa during the first quarter, and has scheduled shutdowns at the Swiecie mill in Poland and at two of its kraft paper mills for the second quarter. It kept its guidance that the impact of maintenance shuts on annual operating profit in 2015 will be about EUR80 million.
By Steve McGrath; [email protected]; @stevemcgrath1
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