July 29 (Bloomberg) -- Mondi Ltd., South Africa’s biggest packaging and paper company, said first-half earnings climbed as much as 44 percent after it took a lower charge related to reorganization.
Basic earnings rose to between 46 euro cents and 51 cents a share in the six months through June from 35.3 cents a year earlier, the Johannesburg-based company said in a statement today. A net charge of 16 million euros ($21 million) compared with a similar 68 million euros a year earlier, Mondi said. Underlying operating profit, which excludes the impact of the charge, rose as much as 9.3 percent to 54 cents.
“This is a reassuring update,” Justin Jordan, a London-based analyst at Jefferies Group LLC who recommends buying Mondi shares, said in a note today. “Mondi is benefiting from its strategic capital investments with improving pricing outlook.”
Mondi is expanding in new markets to reduce its reliance on stagnant economies and gain from a shift to packaging products. The shares rose 1.6 percent higher at 194 rand by 9:44 a.m. in Johannesburg. Mondi is up 8 percent this year. Sappi Ltd., the world’s biggest producer of dissolving wood pulp and paper based in Johannesburg, rose 0.9 percent to 44.60 rand, bringing its 2014 gain to 36 percent.
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