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Mondi Says First-Quarter Underlying Operating Profit Fell

May 3 (Bloomberg) -- Mondi Group, Europe’s largest maker of office paper, predicted that second-quarter orders and prices will rise, after reporting a drop in first-quarter profit.

“We see order improvement continuing and expect prices to remain positive based on the current trend,” Chief Executive Officer David Hathorn said in an interview.

Underlying operating profit fell to 120 million euros ($158 million) from 179 million euros a year earlier and 132 million euros in the quarter through Dec. 31, Johannesburg-based Mondi said in a statement today.

The South Africa division’s underlying operating profit was “well down” on lower average selling prices and weaker export volumes of white-top containerboard, the company said. Aylesford Newsprint struggled to return to profife1tability as the “very weak” European newsprint market continued, Mondi said. The company is looking at ways to reduce costs and is “actively assessing alternatives for this business,” it said.

Mondi fell 1.5 percent to 70.10 rand at the close in Johannesburg. The stock has climbed 22 percent this year, outpacing a 7.5 percent gain in the FTSE/JSE Africa All Share Index.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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