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Mondi Profit Declines on Softer Prices, Weaker European Sales

Oct. 31 (Bloomberg) -- Mondi Ltd., the largest maker of office paper and industrial bags in Europe, said third-quarter operating profit decreased after a fall in sales prices.

Underlying operational profit was 135 million euros ($175 million) compared with 136 million euros a year ago, the Johannesburg-based company said in a statement.

“Third-quarter average benchmark selling prices across all grades were below those of the comparable prior-year period,” the company said.

Sales for the third quarter are typically lower than the rest of the year due to European summer vacations and maintenance at the company’s plants, Chief Financial Officer Andrew King said by phone from Johannesburg. Mondi expects price increases for its packaging products to deliver a boost to fourth-quarter earnings, King said.

Mondi bought 99.93 percent of consumer package-maker Nordenia International AG, based in Greven, Germany, effective Oct. 1 for 259 million euros in cash. In September Mondi bought two corrugated-box plants and a recycled-container-board mill from Austria’s Duropack AG for 125 million euros.

Sales and profit from Nordenia will be included in the company’s fourth-quarter results, King said.

Mondi’s shares traded 0.2 percent higher at 92.33 rand in Johannesburg at 10:07 a.m., reversing three days’ decline.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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