Mondi Starts 2013 ‘Well’ Because of Acquisitions, CEO SaysKamlesh Bhuckory
Mondi Ltd., the largest maker of office paper in Europe and South Africa, said its 2013 performance will benefit from new acquisitions running at full capacity after profit fell almost 9 percent last year.
“The year has started off well,” Chief Executive Officer David Hathorn said on a conference call today. The company will focus on integrating newly acquired companies and improving their performance, he said.
Mondi, listed in Johannesburg and London after a 2007 spinoff from Anglo American Plc, posted an 8.7 percent decline in 2012 underlying operating profit to 568 million euros ($749 million). Sales rose 1.2 percent to 5.8 billion euros, while a better pricing environment in the fourth quarter helped offset a weak start to the year, the company said in a statement today.
It is expanding in emerging markets to help drive growth and bought Greven, Germany-based Nordenia from Oaktree Capital Group LLC in July to strengthen its position in eastern European markets that are growing faster than its African base.
Mondi also bought two corrugated-box plants and a recycled-containerboard mill in Germany and the Czech Republic from Austria’s Duropack AG for 125 million euros in September.
Mondi’s 20 million-euro investment in China will be completed by the end of this year, creating potential revenue of as much as 200 million euros, Hathorn said. Mondi, which operates 102 plants across 30 countries, is “encouraged” by the “opportunity to extract value from acquisitions” he said. There will be “some rationalization,” resulting in no more than 200 job losses, he said.
A challenging business environment in southern and western Europe is being offset by “positive” sentiment in central and eastern Europe, Hathorn said.
Mondi shares declined as much as 4.9 percent in Johannesburg before recovering to close little changed at 113.53 rand. Almost 700,000 shares, or double the three-month daily average, were traded.
The Johannesburg-listed stock has gained 23 percent this year, making it the third-best performer of the 165-member FTSE/JSE Africa All-Share Index. Sappi Ltd., a producer of coated fine paper, has retreated 7.8 percent during the period.