Packaging group Mondi announces special payout as profit climbs

Company has been battling currency effects from South African rand and US dollar

Paper and packaging group Mondi said more than €750 million of approved capital expenditure projects were under way. Photograph: iStock

Paper and packaging group Mondi said more than €750 million of approved capital expenditure projects were under way. Photograph: iStock

 

Paper and packaging group Mondi announced a special payout of 100 cents per share after full-year underlying profit rose 4 per cent, benefiting from solid demand and higher average selling prices in most of its businesses.

Mondi has been battling negative currency effects from a stronger South African rand and a weaker US dollar while also facing increasing pricing pressures because of higher raw materials costs.

This prompted a profit warning in October, but the company said on Friday that operational performance improvements had countered inflationary pressures in its cost base.

Mondi said there had been “strong upward momentum” in pricing across the main product in its packaging-paper and fibre-packaging business over the course of 2017 and into early 2018, with chief executive Peter Oswald describing the group’s outlook as “positive”.

Focused strategy

“We remain confident that our consistent and focused strategy, robust business model centred around our cost-advantaged assets and firm focus on driving performance will sustain our track record of delivering value-accretive growth,” he said in a statement.

Shares in the group, which is listed in London and Johannesburg, were up 2 per cent at £18.79 in early London trade.

Mondi said that more than €750 million of approved capital expenditure projects were under way, pointing towards a strong growth pipeline.

The company also recommended a full-year ordinary dividend of 62 cents per share, up 9 per cent on a year ago. – Reuters