Mondi PLC on Thursday declared a special dividend following the sale of its Russian business, but the packaging firm posted a sharp drop in interim profit as it faced weaker prices and rising costs.

The Weybridge, England-based packaging firm said its pretax profit from continuing operations declined 29% to €296 million for the first six months of 2024 from €418 million a year earlier.

Mondi’s Syktyvkar business in Russia is classified as a discontinued asset.

From continuing operations, revenue was down 3.6% to €3.74 billion from €3.88 billion. Underlying earnings before interest, taxes, depreciation and amortisation fell 17% to €565 million from €680 million, mainly as a result of lower average selling prices, and inflationary personnel and operating cost pressures.

But improving market demand and customer restocking led to an increase in its volumes in the first half of the year.

Its so-called ‘other net operating expenses’ surged to €207 million, compared to €42 million.

Mondi said improving market conditions enabled a number of price increases to be implemented across all its paper grades. The full benefit of these increases are expected to come through in the second half of this year, it said.

Mondi declared a special dividend of 160.00 euro cents and maintained its interim payout at 23.33 cents.

The special dividend resulted from the net proceeds from the sale of the sale of the Syktyvkar mill early in December.

Earnings per share fell 30% to 44.5 cents from 63.7 cents.

Mondi Chief Executive Officer Andrew King described the first-half performance as ‘robust’ on the back of improving market conditions.

The company said its €1.2 billion of organic growth investments remain on track and on budget. It expects these investment to deliver a ‘meaningful’ Ebitda contribution from 2025.

Copyright 2024 Alliance News Ltd. All Rights Reserved.