Mondi profits rise despite inflation, monitoring Ukraine conflict

Underlying core earnings rose 11% to €1.5bn and pre-tax profit by 28% to €983m on revenue of €7.7bn, up 16%. The company, whose Russian operations generate a fifth of profit, said it was monitoring events after Moscow’s decision to invade Ukraine. It also expects continued pressure from inflation.

“However, we also expect to realise the full benefit of the price increases implemented in 2021 and early 2022, shorter planned maintenance shuts and the contribution from our capital investment programme,” it added.

Mondi’s input costs were materially up year-on-year, with higher plastic resin, energy and transport costs.

“We have significant operations in Russia, representing around 12% of the group's revenue by location of production in 2021, including our high-margin, cost-competitive, integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar (Komi Republic).”

“Our businesses primarily serve the domestic market and have continued to operate through this time of heightened geopolitical tension. We are actively monitoring this rapidly evolving situation, the international response and the implications for the group.”

Mondi said it expected energy costs to remain high “for some time”, but said this impact was offset by internal power generation at its pulp and paper mills, with biomass sources accounting for around 65% of the fuels used.

“Resin and paper for recycling costs increased sharply in the first half and have remained stable at high levels. We are currently seeing rising wood and chemical costs and generally expect cost pressures to continue,” it added.