(Correcting that Mondi didn’t declare a special dividend on Thursday; it was paid out earlier this year.)
Mondi PLC on Thursday maintained its interim dividend, though 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 kept its interim dividend at 23.33 euro cents.
In February, the group returned 160.00 cents per share to its shareholders in the form of a special dividend. The special payout 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.
Mondi shares were up 0.6% to 1,529.50 pence each on Thursday morning in London, but they were down 0.1% to R 357.07 in Johannesburg.
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