Mondi earnings gain on consumer packaging

A Mondi plant. (Photo: Facebook)
A Mondi plant. (Photo: Facebook)

Johannesburg - Mondi, a manufacturer of packaging for products from cement to pasta sauce, said first-quarter earnings rose 14% on strong contributions from the consumer business and domestic South African market.

Underlying operating profit increased to $307m, the Johannesburg-based company said in a statement on Thursday. Sales volumes were in line with the same period in 2015 on a like-for-like basis.

"We have seen some price weakness in certain of our packaging paper grades," yet "demand for these products remains strong," Mondi said. "We continue to benefit from higher truncated fine paper prices, lower energy and related input costs."

Mondi, which has its roots in printing paper and was spun out of Anglo American in 2007, gets about 75% of its revenue from packaging products and is seeking to grow further in the industry.

The company is investing to expand and modernize some of its facilities, with as much as €450m of investment planned for this year.

Mondi shares have declined 5.5% this year in Johannesburg, compared with a 0.1% rise on the FTSE/JSE Africa Top40 Index, valuing the company at R142bn.

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