24th Feb 2015 07:59
LONDON (Alliance News) - Mondi PLC Tuesday reported higher profits for 2014, driven largely by cost-cutting and other measures aimed at boosting margins, and said it is confident of "making further progress" in 2015 thanks to the investments it has been making in the business.
The South Africa-based paper and packaging company reported a pretax profit of EUR619 million for 2013, up from EUR499 million in 2013, even though revenue dropped to EUR6.40 billion, from EUR6.48 billion. Its closely-watched underlying operating profit rose 10% on the year to EUR767 million, driven by a strong performance in packaging paper, a big improvement in consumer packaging in the second half of the year and volume growth and lower input costs in its fibre packaging business.
It raised its full-year dividend to 42.0 euro cents, from 36.0 cents in 2013.
The company completed a number of key capital projects in 2014, including a 155,000 tonne a year bleached kraft paper machine in the Czech Republic, a recovery boiler in Slovakia and
a 100,000 tonne a year softwood pulp dryer in Russia. Over the past 18 months, it has approved further major projects amounting to a total capital commitment of around EUR420 million.
"While acquisition led growth remains a key component of the group's strategy, and opportunities continue to be evaluated as they arise, management currently sees greater opportunity for value-enhancing growth through capital investments in existing operations," the company said.
It was less positive about the outlook for its markets.
"Economic growth is expected to remain below historical averages in the regions in which we operate. We expect this slow economic growth to continue to impact on demand for our products in the short term, although underlying industry fundamentals remain generally sound, with supply/demand balance supported by supply-side constraint," it said.
By Steve McGrath; [email protected]; @stevemcgrath1
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