Mondi reports 11% decline in headline earnings, shares fall sharply
Image: Simphiwe Mbokazi Independent Newspapers
Global paper and packaging producer Mondi's share price slumped over 8% on the JSE Thursday after it reported that headline earnings per share fell by 11%, to 37.2-euro cents, in the six months to 30 June.
The share was trading 8.12% lower at R254.71 on the JSE, bringing the decline in the price over 12 months to over 29%. The interim dividend was held at 23.30-euro cents.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €564 million, including €18m forestry fair value gain, was much in line with the first half of 2024's €565m, which included €49m forestry fair value gain.
'We delivered a solid performance. Volume growth, price increases and good cost control effectively mitigated currency headwinds and inflationary pressures,' CEO Andrew King said in the results announcement.
The performance in the two packaging businesses was supported by higher average selling prices.
Corrugated Packaging's EBITDA of €203m was 42% ahead of the comparable period.
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Flexible Packaging EBITDA of €302m increased by 9% ahead.
Uncoated Fine Paper delivered €81m of EBITDA, including a forestry fair value gain of €18 million, well below €166m in the first half of 2024, including a forestry fair value gain of €49m. The underperformance was primarily driven by challenges in the UFP division and foreign exchange headwinds in the Flexibles segment.
Production and sales were ramping up for all major capacity expansion projects. The acquisition of the Western European packaging assets of Schumacher Packaging was completed on 31 March 2024, with integration and synergy benefits on track.
Looking ahead, King said trading conditions in the second half were likely to continue to be blunted by geopolitical and macroeconomic uncertainties.
'We remain focused on delivery of our productivity, cost and cash flow optimisation initiatives, while ensuring we are well positioned for long-term value creation…,' said King.
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