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Mondi is enjoying "a strong pricing environment in a number of our key product segments, supported by good demand growth".
Mondi is enjoying "a strong pricing environment in a number of our key product segments, supported by good demand growth".

Mondi benefits from strong demand and pricing power

FMCG SUPPLIER NEWS

By Robert Laing - May 16th 2018, 11:07

Paper maker Mondi is enjoying "a strong pricing environment in a number of our key product segments, supported by good demand growth", it said in a trading update. 

Confusingly, there are two Mondi shares on the JSE, dating back to archaic rules when it dual-listed in London. Its plc shares, with stock ticker MNP, rose as much as 1.8% to R346.47 while its Limited shares, MND, rose 1.7% to R345.06 following the trading update.

Mondi is scheduled to release its interim results for six months to end-June on August 3.

Wednesday’s trading update did not provide earnings guidance but said its underlying operating profit for the three months to end-March grew 15% to €295m from the matching period in 2017.

Production of uncoated fine paper fell while it maintained its Richards Bay mill. But it offset this by producing more packaging paper.

"Based on prevailing market prices, we estimate that the impact of maintenance shuts on operating profit for 2018 will be around €115m from €95m in 2017, slightly above our previous estimate, of which around half will be incurred in the first half of the year," the trading update said.

Mondi said that while it suffered from higher prices for wood, chemicals and energy, it benefited from falling recycled paper prices.

It suffered from a stronger rand during the March quarter, while benefiting from the euro strengthening against the dollar and Russian rouble.

© BusinessLIVE MMXVIII 

Read more about: trading update | production | paper | mondi

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