- South African company operating profit up 14%; sales in line
- Johannesburg shares rise as much as 3.7%, most in two months
Mondi Ltd., a manufacturer of packaging for products from cement to pasta sauce, said first-quarter earnings rose 14 percent on strong contributions from the consumer business and domestic South African market.
Underlying operating profit increased to 269 million euros ($307 million), the Johannesburg-based company said in a statement on Thursday. Sales volumes were in line with the same period in 2015 on a like-for-like basis.
“We have seen some price weakness in certain of our packaging paper grades,” yet “demand for these products remains strong,” Mondi said. “We continue to benefit from higher uncoated fine paper prices, lower energy and related input costs.”
Mondi, which has its roots in printing paper and was spun out of Anglo American Plc in 2007, gets about 75 percent of its revenue from packaging products and is seeking to grow further in the industry. The company is investing to expand and modernize some of its facilities, with as much as 450 million euros of investment planned for this year.
Mondi shares rose as much as 3.7 percent, the most since March 15, to 301.02 rand, a two-month high. The stock has fallen 2.5 percent this year in Johannesburg, compared with a 0.1 percent decline on the FTSE/JSE Africa Top40 Index. That values the company at 146 billion rand ($9.7 billion).