Mondi cites planned maintenance shuts as Q3 profit falls

17th Oct 2024 07:23

(Sharecast News) - Paper and packaging group Mondi said on Thursday that underlying core profit fell in the third quarter in "muted" trade, mainly due to more planned maintenance shuts.

In an update for the three months to 30 September, the company said that as expected, underlying earnings before interest, tax, depreciation and amortisation declined to €223m from €351m in the second quarter.

This was put down to more planned maintenance shuts and a forestry fair value loss, which together resulted in a difference between the third quarter and second quarter of about €90m. Softer seasonal demand and higher input costs also had an impact.

Mondi said selling prices in corrugated packaging and flexible packaging were higher than in the previous quarter due to the implementation of paper price increases earlier in the year.

After a recovery in pricing at the start of the year, pulp and paper selling prices in uncoated fine paper fell in the quarter.

Chief executive Andrew King said: "While we are seeing the benefits from the increase in prices earlier this year across our key paper grades, trading conditions remain muted against the backdrop of an uncertain macroeconomic environment. In the fourth quarter there will be fewer planned maintenance shuts, and we expect the normal seasonal pick-up in demand.

"Our expansionary projects remain on track. We are making good progress towards completing the paper machine investments at Steti and Duino, both expected to start-up as planned. Overall, our organic growth investments are expected to deliver a meaningful EBITDA contribution from 2025. Together with the recently announced acquisition of the Western European assets of Schumacher Packaging, the additional capacity will ensure Mondi is well positioned to capitalise on the structural growth in sustainable packaging."