Tag: Mondi

Low paper prices hurt Mondi 

South African packaging and paper company Mondi said on Thursday underlying operating profit for the first quarter of 2017 was down 6% due to lower selling prices and inflationary cost pressures.

Underlying operating profit fell to 252-million euros ($274-million) in the three months through March from 269 million euros a year ago, Mondi, which is also listed in London said in a statement.

The figure was up 12% on the fourth quarter last year due to higher sales volumes and prices.

“Strong sales volume growth was more than offset by a significantly lower forestry fair value gain, inflationary cost pressures and lower average selling prices,” the company said.

The packaging paper division was impacted by lower selling prices for containerboard, while significantly lower gains on the value of its forestry assets, lower average export selling prices for hardwood pulp and white top kraftliner products, and a stronger rand impacted the South Africa division.

“As previously advised, we are experiencing some inflationary cost pressures across the Group and the forestry fair value gain is expected to be lower than in 2016,” the company said.

*($1 = 0.9195 euros).

By Nqobile Dludla for www.moneyweb.co.za

Packaging and paper group Mondi has confirmed that the European Commission is conducting an inspection at its Vienna office.

“Mondi understands the investigation is focused on kraft paper and industrial bags,” the group said, and that it was co-operating with the investigation.

“Mondi is committed to complying with all applicable competition laws and is not aware of any wrongdoing or contravention of the relevant legislation,” the group said.

The European Commission announced about a year ago that its antitrust officials were performing unannounced inspections of the premises of several companies in the kraft paper and industrial sack segment.

It said at the time it was concerned that the companies in question might have violated article 101 of the Treaty on the Functioning of the European Union, which prohibits anticompetitive practices such as price fixing and customer allocation.

Source: www.businesslive.co.za

Russia’s Federal Antimonopoly Service (FAS) has opened a case against a subsidiary of Mondi for violating what it says are “elements of the antimonopoly laws”.

FAS says it “suspects” Mondi Syktyvkar, which it describes as Russia’s largest paper producer, of failing to comply with aspects of federal law; in particular “monopolistically fixing the high price for offset paper”.

Mondi has said that it had not received “any FAS notification to this effect” and had no further details of the probe.

“Mondi is committed to complying with all applicable antimonopoly laws and believes it has not violated any such laws.”

Lora Rossler, group head of communications at Mondi, said that the group’s offset uncoated fine paper sales in Russia comprised about 10% of its Europe and international uncoated fine paper sales, or “less than 2%” of group sales.

Mondi’s share slipped 2.2% to close at R277.95 on the JSE.
“A recently observed increase of prices for offset paper has elements of violating the antimonopoly law,” Nelli Galimkhanova, head of the FAS department for industry control, said in a statement on the authority’s Web site on Friday.

“Upon considering all case circumstances and the arguments given by the respondent, the FAS commission shall make a decision,” she says.

FAS says it found last year the costs of offset paper rose about 50% for Russian consumers, but this did not match the change in the costs of production and sale of such paper.

It had earlier initiated inspections of Russia’s largest cellulose and paper industry makers.

Offset paper refers to paper used for printing books and magazines and not to single office-style paper for photocopying.

FAS also says it was continuing to “watch the situation” in Russian cellulose-and-paper markets, and that it monitored costs on a quarterly basis.

Justin Jordan, equity analyst at Jefferies International in London, says Russian authorities had not contacted Mondi formally.

“What happens from here? Likely nothing, in Jefferies’s view. Worst case scenario, a modest fine,” he says.

Jordan says that Mondi had increased offset reel paper prices by 25% in Russian currency terms last year, due to domestic Russian cost inflation.

However, he says that market sentiment was the “real issue here”, following an earlier European Union investigation into possible price-fixing in industrial sack markets.

Mondi last month said it had not been affected by unannounced inspections at several companies in the European kraft paper and industrial bags sector.

By Mark Allix for www.bdlive.co.za

Packaging and paper group Mondi has announced an increase in full year pre-tax profit to €796-million from €619-million a year ago.

On a per share basis, earnings were 124 euro cents, up from 97.4 euro cents in the previous year. Underlying earnings for the full year was 133.7 euro cents per share.

Group revenue climbed 7% to €6,819-billion from €6,402-billion in the prior year.

In a separate release, Mondi group said it plans to sell interest in uncoated fine paper operations in Austria, Hausmening and Kematen known as Neusiedler to subsidiary Mondi SCP for €30-million. Remaining 49% of SCP is with Eco-invest. The transaction is expected to complete in March 2016.

David Hathorn, Mondi group chief executive says its outlook for the business remains positive. However, the company sees some softness in certain of its packaging paper grades and sees firmer prices in the European uncoated fine paper markets following recent industry capacity rationalisation.

Source: www.nasdaq.com

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My Office News Ⓒ 2017 - Designed by A Collective


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