Mondi share price: Q3 Operating profit in line with expectations

on Oct 16, 2014
Updated: Oct 21, 2019
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iNVEZZ.com, Thursday, October 16: Mondi Plc (LON:MNDI), today released an interim management statement, saying that third-quarter underlying operating profit was comparable to last year and in line with the company’s expectations. However, it was lower than in the previous quarter, as the South African paper and packaging group was hit by maintenance shuts and weaker trading conditions in Europe.

In today’s trading Mondi shares were down 0.2 percent at 941.50p as of 10:16 BST. The company’s share price has fallen 10 percent since the start of the year.
**First quarter**
Mondi’s third quarter operating profit came in at €147 million, similar to the levels seen a year earlier and 10 percent lower than in the previous quarter. The result was impacted by maintenance shuts at the group’s fine paper and containerboard facilities, which dented underlying operating profit by €30 million, according to company estimates. This offset previously-announced price increases in the group’s key packaging paper markets and lower wood costs.

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Mondi said that major maintenance shuts are scheduled for the fourth quarter at its kraft paper division and estimated that their impact would be around €15 to €20 million.
The group was also hit by a seasonal swing in European demand.
Reuters quoted Mondi’s chief executive officer David Hathorn as commenting after the release of the interim management statement: “Europe is always slower in the third quarter but we expect this to pick up in the fourth quarter.”

On the bright side, Mondi continued to benefit from “its investments in energy related capital expenditure and lower European natural gas prices”.

Europe is an important market for the company, which is mainly involved in the manufacture of packaging paper. The group said that the price increases in packaging paper should help its results. Looking further forward, it said “much depends” on the macro environment in its core European markets, but added that it remained confident of continuing to deliver an industry-leading performance.

**Analysts on Mondi**
According to the Financial Times, as of October 10, 2014, the consensus forecast amongst 12 polled investment analysts covering Mondi has it that the company will outperform the market. The same consensus estimate has been maintained since the sentiment of investment analysts improved on October 03, 2013, the FT notes.
**As of 12:06 BST buy Mondi shares at 930.50 pence**
**As of 12:06 BST sell Mondi shares at 928.00 pence**

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