Mondi forecasts strong third quarter but warns of higher costs
Mondi says it benefited from higher average selling prices across fibre packaging and uncoated fine paper
Packaging and paper group Mondi said on Thursday it had a strong performance in the three months to September, but flagged higher costs, which it said were manageable.
Underlying earnings before interest, tax, depreciation and amortisation (ebitda) was up 30% to €466m in the third quarter, from the matching period a year ago. Ebitda rose a modest 4% quarter on quarter.
Mondi said it benefited from higher average selling prices across fibre packaging and uncoated fine paper, a strong operational performance, good cost containment and contributions from recent acquisitions.
Like-for-like sales volumes for the review quarter were up from the year-ago period due to good growth in the fibre packaging value chain, according to the trading statement.
"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," the statement read.
The company said planned mill maintenance shuts during the quarter had an estimated effect on underlying ebitda of about €30m, the same as in 2017.
For the full 2018 financial year, the effect of maintenance shuts on underlying ebitda is estimated at €115m, from €95m a year before.
Finance charges were marginally up on the second quarter, as a result of higher average net debt, primarily due to significant cash outflows during the first half of 2018 relating to the completion of acquisitions (€415m) and the payment of a special dividend (€484m).