The paper and packaging group says rising operating costs were more than offset by higher selling prices in the three months to end-September
Mondi has managed to maintain the strong performance it reported in the first half of its financial year into the third quarter. Rising operating costs were more than offset by higher selling prices for its Fibre Packaging and Uncoated Fine Paper and a strong operational performance, with acquisitions adding a small sweetener.
Like-for-like sales volumes for the three months to end-September were up on the comparable period due to good growth in the Fibre Packaging value chain. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 30% to "466 from a year earlier and were 4% up from its second quarter.
We continue to see manageable upward pressure on our cost base with input costs up on the comparable prior year period and more moderately up when compared to the second quarter," Mondi said. "Cash fixed costs were higher as a result of the impact of mill maintenance shuts and inflationary cost pressures, mitigated by ongoing cost reduction initiatives."
Mondi said planned mill maintenance shut-downs during the quarter shaved about "30 million from underlying EBITDA. For the full year, it expects the impact of maintenance shuts to total "115 million.
Going into the annual price negotiations in the current quarter, Mondi said it expects demand from kraft paper to remain strong, supported by the drive to replace plastic carrier bags with paper-based alternatives and increasing demand for sustainable paper-based flexible packaging.
Mondi Limited's shares ended trade 1.6% down at R347.47 while Mondi Plc (LON:MNDI) fell 1.4% to R345.46.
Mondi trading update for Q3 looks great! Well done!Once again, an example of how a good management team adds value to a company.-- Cobus Cilliers (@CobusC82) October 11, 2018
Mondi trading update . Looks fantastic. Should buy after yesterday's big fall. Excellent company-- Wayne McCurrie (@WayneMcCurrie) October 11, 2018
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