Mondi delivers on earnings expectations
MONDI, the global packaging and paper group, said yesterday it had delivered earnings that were in line with expectations despite falling by 8 percent for the first quarter to the end of March.
Its underlying earnings before interest, tax, depreciation and amortisation (Ebitda) declined to €353 million (about R6.1 billion) for the quarter, down from €385m reported in the same quarter last year.
However, the current Ebitda was up by 14 percent compared to the €309m reported in the last quarter of 2020.
Chief executive Andrew King said yesterday that Mondi delivered a robust performance in the first quarter, boosted by a strong demand across their packaging markets, supported by the structural growth drivers of e-commerce and sustainability. The group is implementing price increases across all key product segments.
“We continue to benefit from the contribution of our capital investment programme and our relentless focus on continuous improvement, mitigating the impact of significant input cost pressures and currency headwinds. While macroeconomic uncertainties remain, we are confident the group remains well placed to make progress in line with our expectations,” King said.
The group has continued with its major capital investment during the quarter, which is aimed at capturing growth opportunities, enhancing their product offering, giving quality and service to customers, strengthening their cost competitiveness and improving their environmental footprint.
Mondi has invested in the new 300 000 ton per year kraft top machine at Ružomberok in Slovakia and the converted speciality kraft paper machine at Št tí in the Czech Republic after commissioning in January.
In the corrugated packaging segment, the group said the demand remained very strong, driven by growth in e-commerce, fast-moving consumer goods and the recovery in a range of industrial applications.
“On the back of tight global markets, a series of price increases across our containerboard grades were implemented during the quarter and into the second quarter. Corrugated Solutions performed strongly, growing volumes significantly while making good progress in passing on higher input paper costs,” the group said.
The group also saw good volumes in the flexible packaging segment on a back of strong order books.
However, the engineered materials’ performance was stable during the quarter, and the group said capital investments projects and restructuring were progressing according to plan.
In the uncoated fine paper, its sales volumes were lower compared to last year.
Mondi said there were no significant maintenance shutdowns during the quarter, but the impact of scheduled maintenance shutdowns on underlying Ebitda in the second quarter is estimated at about €40m.
Looking ahead, Mondi said the firm continued to benefit from the contribution of their capital investment programme.
“While macroeconomic uncertainties remain, we are confident the group remains well placed to make progress in line with our expectations,” the group said.
Mondi shares closed 2.24 percent lower at R385.94 on the JSE yesterday.