Packaging firm Mondi has posted a 30% increase in underlying EBITDA for the third quarter of its financial year, of €466 million, up from €359 million in the same period last year.
In a trading statement, the group said that like-for-like sales volumes in the quarter were up on the previous comparable year, largely due to strong growth in its Fibre Packaging operations.
In addition, selling prices for Mondi's key paper grades were 'significantly up' on the previous year.
'Manageable Upward Pressure'
'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 company said in a statement.
'The notable exception was paper for recycling costs, where average benchmark European prices were down 42% on the prior year period and stable sequentially. Cash fixed costs were higher as a result of the impact of mill maintenance shuts and inflationary cost pressures, mitigated by ongoing cost reduction initiatives.'
The group said that currency movements had a 'modest net negative' impact on its operations, with the strength of the US dollar and weakness of the South African rand relative to the euro during the period largely offsetting the negative impact from a weaker Russian rouble and Turkish lira.
Divisional Performance
In Fibre Packaging, the business benefited from higher average selling prices for the quarter, and continued strong demand for kraft paper.
It is in the process of implementing a €335 million modernisation of its Štětí plant in the Czech Republic, which is set to be completed in the fourth quarter of the year.
In the group's Consumer Packaging business, restructuring initiatives and recent investments have helped put the business in a stronger position, however 'overall performance continues to be held back by declining volumes in personal care components', it said.
Its Uncoated Fine Paper segment, meanwhile, 'continues to perform strongly with higher average selling prices during the quarter offsetting higher input costs and negative currency effects'.
Looking ahead to the remainder of the year, Mondi said that it 'continues to benefit' from its fibre-based product segments.
'However, as expected, the quarter will be impacted by the large project related shut and rampup at our Steti mill, restructuring initiatives in Industrial Bags and continued pressure on the cost base across the Group, mitigated by our ongoing proactive and comprehensive cost reduction programmes,' it added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
