Mondi surprises with strong earnings recovery

In a surprise announcement, packaging and paper group Mondi revealed that its earnings for the full year would be at least 20% higher than the previous year.

The FTSE 100 company's unscheduled update reported that basic earnings per share would be between €0.96 and €0.99 in the calendar year, up between 20% and 24% on the €0.80 last year.

Excluding special charges, underlying earnings also climbed between 12% and 15% to between €1.06 and €1.09, accelerating rapidly from the 5% gain seen in the first half of the year.

In October, the Johannesburg-based company reported flat underlying sales and underlying profits held back by planned maintenance shutdowns and falling 10% on the previous quarter.

The group had continued to benefit from price increases in the key packaging paper markets and lower wood costs, though these were offset by the major annual maintenance closures at its fine paper and container board facilities, which had a €30m adverse impact on the bottom line.

Tuesday's announcement was sparse in operational detail, but notified that underlying operating profit would be above that of the prior year's, having in the first nine months of the year risen 2.4% to €551m.