27th Feb 2020 09:28
(Alliance News) - Mondi PLC on Thursday reported flat 2019 profit as lower expenses and impairments made up for a more lacklustre revenue performance.
The paper and plastic packaging company posted a EUR1.10 billion annual profit, a hair below 2018's figure of EUR1.11 billion.
Revenue was 2.8% lower at EUR7.27 billion versus EUR7.48 billion the previous year. Depreciation, amortisation and impairments fell, however, to EUR476 million from EUR527 and other net operating expenses dropped to EUR178 million from EUR302 million. This meant that profit remained largely unchanged.
Analyst consensus, compiled by Mondi, saw the firm's underlying earnings before interest, tax, depreciation, and amortisation coming in at EUR1.65 billion for 2019, suggesting a 6.8% year-on-year fall. This was beaten, with Ebitda coming in at EUR1.70 billion, down only 1.2% from EUR1.72 billion in 2018.
For 2019, Mondi's underlying operating profit was EUR1.22 billion, just over consensus but below 2018's EUR1.32 billion, while basic underlying earnings per share was also slightly higher than consensus at EUR1.71 but below 2018's EUR1.89. The market forecasted underlying operating profit at EUR1.21 billion, and underlying earnings per share at EUR1.70.
Mondi has recommended a 9.2% full year dividend rise to 83.0 euro cents per share from 76.0 cents in 2018, beating consensus of 77 cents.
Last week, Mondi promoted finance chief Andrew King to chief executive, with King taking up his new position at the start of April. He replaces Peter Oswald, who departs at the end of March. Oswald's resignation was announced in January, having served in the role since May 2017.
King said: "Looking ahead, we remain confident in the structural growth drivers in the packaging sectors in which we operate. Heightened macro-economic uncertainties are likely to continue to affect markets in the short term and, while we are seeing indications of stability in pricing in certain segments, we start the year with lower prices across our key paper grades. Input cost relief, our ongoing profit improvement programmes and customer-centric innovation initiatives, and the benefits from our capital expenditure pipeline will continue to support our performance.
"With our robust business model, centred around our high-quality, cost-advantaged asset base, our culture of continuously driving performance and the strategic flexibility our strong cash generation and financial position bring, we continue to look to the future with confidence."
Shares in Mondi were down 0.7% in London on Thursday morning at 1,609.00p, but up 1.8% at ZAR319.78 in Johannesburg.
By Anna Farley; [email protected]
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