Yahoo Finance FTSE 100: Mondi profits jump amid higher selling prices
Packaging and paper group Mondi (MNDI.L) reported a 55% jump in third-quarter underlying core earnings to €450m (£390m/$439m) as it shrugged off inflation fears.
The FTSE 100-listed company said that for the quarter ended 30 September, underlying earnings before interest, tax, depreciation and amortization (Ebitda) – the company's preferred metric, which strips out exceptional and other one-off items – came to €450m, which compares to €290m for the third quarter of 2021.
The figures do not include Russian operations. Russian assets are being classified as held for sale as they pursue the sale of Mondi Syktyvkar for around €1.5bn.
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The company noted that higher average selling prices and overall volume growth more than offset significant cost pressures.
Input costs were significantly higher in the quarter both on year and sequentially due to higher wood and energy costs.
Mondi shares were up 1.1% at 1,4391 pence in London early Friday.
However, the group was able to mitigate the impact of significantly higher European gas and electricity costs as most of its pulp and paper mills generate the majority of their energy needs internally, with around 80% of the fuels used in this process from biomass sources, and 10% of its fuel sourced from natural gas.
“While significant geopolitical and macroeconomic uncertainties remain and we anticipate continued inflationary pressures on our cost base as we enter the fourth quarter, we are confident that the group will continue to demonstrate its resilience and deliver a year of good progress," it said.
The corrugated packaging unit benefited from higher average selling prices on-year, while flexible packaging performed well with resilient demand in the period.
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Mondi are pushing forward with their €1bn expansion plans, noting a €400m Czech Republic paper mill set to come online in 2025.
“Our ambitious expansionary capital investment programme is progressing well, as we continue to invest in our cost advantaged asset base to capture opportunities in our structurally growing packaging markets, enhance our competitiveness and deliver sustainably into the future,” Andrew King, chief executive officer, said.
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