Acquisitions help Mondi defeat Europe malaise

By Rod Addy

- Last updated on GMT

Related tags Czech republic South africa Germany

Examples of Mondi's corrugated packaging include the firm's Afcofish Tray
Examples of Mondi's corrugated packaging include the firm's Afcofish Tray
Packaging firm Mondi overcame weak European demand to post first quarter strong profit figures, boosted by recent acquisitions, and strong performances in South Africa and its Packaging Paper division.

The company, which straddles food and non-food packaging, grew operational profit by 35%, from €120m to €162m from January 1 to March 31, 2013, over the comparable period in 2012.

"The significant increase over the comparable prior year period is a result of improved market conditions in the Packaging Paper and South African businesses, as well as the benefits from the acquisitions of Nordenia and the corrugated packaging plants in Germany and the Czech Republic completed towards the end of 2012,"​ the company said in an interim management statement.

Volume declines in Europe

Mondi said performance of its industrial bags, which are used for bulk powdered products such as flour and milk powder, was in line with the first quarter of last year. It had been hit by volume declines in Europe, but offset by good demand in non-European markets. However, volumes were expected to improve going into the seasonally stronger European summer months, it said.

Meanwhile, consumer packaging delivered stable returns during the quarter, it said. The division had seen an increase in sales volumes, although much of that had been driven by an increase in diaper components.

"Underlying operating profit in the South Africa division was above that of the prior quarter," Mondi stated. "The business continued to benefit from a positive domestic trading environmentin uncoated fine paper and the weaker South African rand. Average selling prices increased on marginally lower volumes."

Corrugated packaging

Average selling prices and sales volumes in corrugated packaging were lifted by the acquisition of the corrugated box plants in Germany and the Czech Republic in the last quarter of 2012, Mondi reported. Examples of corrugated food packaging include the company's Afcofish Tray for transporting 6kg batches of fish packed in ice.

Echoing previous statements, the company stated that "prevailing demand softness across the European businesses" remained a concern. "However, recent price increases in the packaging paper grades provide support and good progress is being made in integrating the group's recent acquisitions.

"Management remains confident of continuing to make progress, in line with its expectations."

 

Related topics Processing & Packaging

Related news