The packaging group reported a 74% jump in operating profits to €354m in the first-half of the year, driven by a strong performance from its Europe and international division.
In its corrugated division, Mondi said that underlying operating profit increased to €105m from €48m the previous year.
The business benefited from significant increases in selling prices, increased volumes from its Swiecie mill "as the recycled containerboard machine commissioned in late 2009 continues to ramp-up to full production and a significantly increased contribution from the rebuilt containerboard machine at Syktyvar, completed in the second half of 2010″.
Rising commodity
The packaging group said that sales volumes continued to improve and average selling prices for the period were higher across all key paper grades compared to the second half of the previous year. Rising commodity input costs partially offset the benefit from revenue gains.
Last month, Mondi, spun its packaging business and listed it on the Johannesburg Stock Exchange under the name Mpact.
Strong demand from Europe
Mondi chief executive David Hathorn said: "The good result achieved in positive market conditions confirms the validity of our strategy. All operations are running well and our recent major investments have made a meaningful contribution to the group's profits.
"The successful completion of the Mpact demerger endorses the strategies of both Mondi and Mpact, allowing both businesses to pursue their increasingly divergent strategic priorities and focus on their respective growth opportunities.
"In the Europe and international division, following a period of strong demand order books remain good but are somewhat softer, having returned to more normalised levels.
"As previously indicated, maintenance shuts planned at a number of the large and strongly profitable European mills will impact second half performance. The South Africa division should benefit from improved output following the extended maintenance shut taken in the first half.
"Looking further ahead, while the uncertainties in the broader macroeconomic environment continue to be a concern for demand, supply-side fundamentals in our core grades remain good. Overall, we believe Mondi remains well-positioned to continue adding value for shareholders."
Mondi H1 2011
Operating profit €354m (2010: €204m)
Sales €2,942 (2010: €2,752)
EBITDA €526m (2010: €371m)
