Mondi, the London and JSE-listed global packaging and paper producer, said earnings before interest tax depreciation and amortisation (Ebitda) was flat in its first quarter to March 31.
Underlying Ebitda from continuing operations was €351 million (R7.1 billion) and flat compared to the fourth quarter of 2022 after excluding the non-cash forestry fair value gains.
“The quarter was characterised by lower average selling prices; softer demand, driven in part by destocking; and lower input costs from the highs seen in the second half of 2022. While wood prices remained high in the first quarter of 2023, they have started to reduce,” CEO Andrew King said in a trading statement yesterday.
“So far in the second quarter, demand remains subdued with lower average selling prices and further input cost reduction across the business,” he said.
Corrugated Packaging saw softer demand in the first quarter, driven in part by destocking, and lower prices compared to the fourth quarter of 2022.
Flexible Packaging delivered a stable performance, with weaker industry demand and modestly lower prices offset by falling input costs.
Uncoated Fine Paper demand in Europe was lower compared to the previous quarter, with prices declining towards the end of the quarter. In southern Africa, demand and pricing were stable.
“We continue to invest in the future growth of Mondi and we are making good progress in executing on our pipeline of expansionary capital projects. We have a compelling product portfolio and a resilient business model, which positions us well to deliver attractive returns and sustainable value accretive growth,” said King.
Underlying Ebitda from the Russian operations was €123m in the first quarter. “We continue to work with Augment Investments in respect of its proposed acquisition of Syktyvkar, and the Gotek Group for its proposed acquisition of the three Russian packaging converting plants, as both parties seek approval from the relevant Russian authorities,” said King.
In 2022, Mondi, which employs some 22 000 people worldwide, had revenues of €8.9bn and underlying Ebitda of €1.8bn from continuing operations.
In line with consumers actively seeking packaging that was responsibly sourced and easy to recycle, Mondi recently created a sustainable paper bag solution Protector Bag ExpandForm with an expandable feature, which it is currently selling to package roll-back mattresses in Europe, as an alternative to plastic packaging.
Mondi’s share price fell 0.26% to R41.75 on the JSE yesterday afternoon, bringing the share price decline to 26% over a year.
BUSINESS REPORT