Mondi’s profit falls

2009-10-27 13:52

Paper and packaging firm Mondi said today in an interim statement

that its profit had fallen.

“In line with expectations, the group’s underlying operating profit

in the third-quarter of 2009 came in modestly below that of the second-quarter

of 2009,” it said.

However, the firm said it was beginning to feel the benefits of its

recently completed cost cutting programme.

Volumes in most areas of the business continued to recover from the

lows reached earlier this year, but this had been offset by lower average

selling prices for the majority of the group’s products.

“Price increases have recently been announced in most of our key

European packaging grades,” Mondi said. According the statement, Mondi’s Europe

& International Division continued to perform well, with underlying

operating profit for the third-quarter similar to the second-quarter thanks to a

“good post summer seasonal pick up in demand”.

However, it said its South African unit continued to face

difficulties from a combination of softer volumes, cost pressures and weak

export prices, exacerbated by a very strong rand.

The company said the impact of new uncoated fine paper capacity

expected to come onto the market later this year was still unclear.

However, it said that the extent of any recovery was largely

dependent on the pace and extent of the global economic recovery, “which remains


Nevertheless, Mondi said it was well positioned to benefit as

market conditions improve.

Mondi’s annual results are expected to be released on February 23,

next year.

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