Mondi Profit Gains 25 Percent After Packaging Prices Roseby
Mondi Ltd., a manufacturer of packaging for products from cement to pasta sauce, said full-year earnings increased 25 percent due to higher selling prices and the positive impact of weakening-emerging market currencies against the euro.
Underlying operating profit rose to 957 million euros ($1.1 billion) in 2015 from 767 million euros a year earlier, the Johannesburg-based company said in a statement on Thursday. Mondi, which also supplies wood pulp and paper products, increased sales 7 percent to 6.8 billion euros.
“It is very pleasing to see the strong contribution from all our business units, driven by generally higher selling prices, volume growth, good cost control and important contributions from recently completed capital projects, Chief Executive Officer David Hathorn said in the statement. “Our outlook for the business remains positive.”
Mondi, which has its roots in printing paper and was spun out of Anglo American Plc in 2007, now gets more than 75 percent of its revenue from packaging and is seeking to grow further in the industry. The company is working to expand and modernize some of its facilities and has approved a 310 million euro investment in a new 300,000 ton per year machine at its mill in Ruzomberok, Slovakia, Hathorn said.
Mondi now has about 450 million euros of major projects approved and in development, the CEO said.
Mondi shares gained 1 percent to 278.15 rand at the close in Johannesburg, having fallen 9.5 percent this year. The FTSE/JSE Africa All Shares Index is down 4.5 percent.