Mondi Kraft paper production. Picture: SUPPLIED
Mondi Kraft paper production. Picture: SUPPLIED

Packaging and paper group Mondi on Thursday reported a 19% rise in full-year underlying core profit, driven by robust demand for its products and higher average selling prices.

The group, which is listed in London and Johannesburg, said underlying earnings before interest, tax, depreciation and amortisation (ebitda) rose to €1.76bn ($2bn) in the year ended December 31, up from €1.48bn a year earlier.

The 52-year-old firm — like its peers Smurfit Kappa Group, Sappi and DS Smith — has been plagued by pricing pressures from higher costs for raw materials and said on Thursday it had implemented "strong" cost control across the group.

"I am particularly pleased to report on … strong cost containment, mitigating the inflationary pressures on our cost base," CEO Peter Oswald said.

The company, which makes office paper and corrugated cardboard boxes, expanded over the years from being predominantly a producer of printing paper into a packaging manufacturer for consumer goods, with a market capitalisation of about £8.99bn.

"Pricing is mixed going into 2019, with recent price reductions in container-board grades and market pulp and stronger pricing in our kraft paper markets," Oswald said.

Reuters