3rd Aug 2018 07:33
LONDON (Alliance News) - Anglo-South African paper and packaging company Mondi PLC said on Friday revenue and profit rose over the first half of 2018, prompting a higher interim payout.
Revenue for the first half of 2018 rose 4.0% to EUR3.73 billion from EUR3.58 billion a year before, as pretax profit grew 6.3% to EUR490 million from EUR461 million.
Sales were up 4% on a like-for-like basis in the period, supported by higher average selling prices and volume growth in Containerboard and Industrial Bags.
Underlying earnings before interest, tax, depreciation and amortisation grew to EUR852 million from EUR730 million, with an underlying Ebitda margin of 22.9%, improved from 20.4% a year earlier.
Mondi said it saw higher wood and energy costs, inflationary increases on cash fixed costs, and a higher depreciation charge during the period. However, the business did benefit from higher average green energy prices in Poland.
The Johannesburg and London dual-listed company declared an interim dividend of 21.45 cents per share, up 12% from 19.10 last year.
"We benefited from good demand across our packaging businesses as well as higher average selling prices, while remaining focused on initiatives to drive performance and mitigate inflationary pressures on our cost base. We saw a strong operational performance across the pulp and paper businesses, with the exception of the extended shut at our Richards Bay mill (South Africa)," said Chief Executive Peter Oswald.
Looking ahead, Mondi said its trading environment remains positive going into the second half of the year, with pricing in "key fibre based product segments" supportive.
Due to sustained good demand, a strong order position and higher input costs, Mondi said it will enact further price increases of EUR40 per tonne for selected virgin containerboard grades across European markets from September.
Mondi said it expects a usual seasonal downturn in Uncoated Fine Paper over the second half, along with continued pressure across its cost base.
The full-year hit to underlying Ebitda from maintenance closures is expects at around EUR115 million, up from EUR95 million in 2017. Of this expected total, EUR55 million has already been taken in the first half of 2018, up from EUR40 million over the same period a year earlier.
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