Mondi sees FY in line with expectations after strong Q1

Underlying first quarter operating profits at paper manufacturer Mondi rose 14% year on year to €269m with strong contributions from consumer packaging, uncoated fine paper and South Africa Division offsetting the impact of lower selling prices in certain packaging paper segments and margin pressure in fibre packaging.

Underlying operating profit was up 9% on the fourth quarter of 2015. Currency movements had a net negative impact against the same period last year, with the benefits of weaker emerging market currencies in Mondi's export-oriented businesses more than offset by the impact of the weaker rouble on its domestically focused uncoated fine paper operations in Russia.

Mondi said on a like-for-like basis, sales volumes were in line with the comparable prior year period, with lower volumes in the industrial bags segment offset by good growth in consumer packaging.

“As anticipated, we have seen some price weakness in certain of our packaging paper grades. However, demand for these products remains strong and we believe the fundamentals remain robust,” Mondi said.

“Furthermore, we continue to benefit from higher uncoated fine paper prices, lower energy and related input costs and the incremental contributions from our recently completed capital investment projects, together with the stability afforded by our downstream converting businesses.”

“Our outlook remains positive and we are confident of delivering in line with our expectations.”