PAPER AND PACKAGING
Lower prices and higher costs hit Mondi’s operating profit
Mondi is being led by CEO Peter Oswald from this week, after the retirement of group CEO David Hathorn
Mondi says underlying operating profit for the first quarter of 2017 of €252m is down 6% on that of the matching period.
Strong growth in sales volumes was hit by considerably lower forestry fair-value gain, inflationary cost pressures and lower average selling prices, the international paper and packaging group said on Thursday.
"However, with capital investments on track and the benefit of price increases and strong volume growth, [we] remain confident of the 2017 outlook," said Justin Jordan, an analyst at Jefferies International.
From this week, Mondi is being led by CEO Peter Oswald after the retirement of group CEO David Hathorn.
Oswald was an executive director and CEO of the group’s Europe and international division from 2008.
Underlying operating profit was up 12% on €225m recorded in the fourth quarter of 2016.
Sales volumes grew across the packaging paper, fibre packaging and consumer packaging business units compared with the first quarter of 2016.
Selling prices for main paper grades, on average, were below those of the same period a year ago.
"During the first quarter of 2017, we implemented price increases across a number of our paper grades, although these had only limited impact in the quarter," the group said.
Currency movements had a small net positive effect on operating profit against the period a year earlier and a small net negative effect when compared with the fourth quarter of 2016.