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Mondi (MNDI) has changed a lot since it was spun out of South African conglomerate Anglo American and listed in London five years ago - and for the better. A series of smart acquisitions has put the emphasis on packaging and fast-growing emerging markets. That's where the money is, and it could be profitable for investors, too. This year alone, Mondi has spent over €1.1bn (£931m) growing its stable, including €657m for German consumer packaging business Nordenia. But Mondi looks to be spending well. Annual sales have grown on average by 6 per cent for the past 14 years and adjusted cash profit by 13 per cent over the past three years. Analysts at investment bank UBS expect profit growth of 7 per cent this year and next, and 9 per cent in 2014. Of course, much depends on big clients - supplying nappy fasteners and sanitary towel liners to Procter & Gamble made up over a third of Nordenia's revenue in 2011 - but Nordenia is set to become Europe's third-largest consumer packaging company. Making re-sealable bags for fast-moving consumer goods such as Tilda rice, Persil liquid and Friskies cat food tends to be resilient. In addition, Mondi chiefs expect savings of more than €15m a year by 2014. Importantly, over 30 per cent of Nordenia's sales come from eastern Europe. That fits in nicely with Mondi's plans. Well over half of group revenues are already from developing economies; increasingly important, given the decline in western Europe's demand for office paper, which still makes up a quarter of Mondi's sales. And it helps that over two-thirds of Mondi's plant is in low-cost regions. In addition, Mondi has just snapped up Duropack's operations in Germany and the Czech Republic for €120m in cash. That strengthens the corrugated packaging business - 24 per cent of sales in the first half - and, like Nordenia, will immediately boost earnings. That's a relief, as group underlying operating profit fell 24 per cent to €269m in the six months to June as lower prices offset higher volumes. Still, that was better than expected and the group says things have picked up since.
Paper and packaging group Mondi has, alongside Svenska Cellulosa Aktiebolaget, divested their 100 per cent interest in Kent-based Aylesford Newsprint to an independent private equity firm. The shares were sold for a nominal consideration, which was satisfied in cash at completion. Immediately prior to completion, the firm was recapitalised, with the proceeds used to repay in full its interest bearing debt and leave net cash of £23m. Mondi will make a loss on the disposal of around €71m, which will be accounted for as a non-operating special item, with the estimated negative cash flow effect of the transaction totalling about €17m. Aylesford Newsprint had pro forma gross assets of around £99m, immediately prior to completion. Mondi's Chief Executive David Hathorn said: "This disposal allows us to continue to focus on our core businesses, while creating an opportunity for Aylesford to continue supplying newsprint to the major national newspaper groups in the UK."
Paper and packaging group Mondi said that all conditions have now been satisfied for the acquisition of flexible packaging firm Nordenia International. Mondi is paying €259m in cash for 99.93% of the outstanding share capital of Nordenia International AG from funds managed by Oaktree Capital Management, LP1 and minority shareholders. "The acquisition of Nordenia offers Mondi Group a unique opportunity to create a leading consumer packaging business, build on long term customer relationships across both businesses and establish a platform to expand further in high-growth emerging markets," Mondi said.
BROKER HAILS MONDI ACQUISITION Mondi, the Anglo-South African paper and packaging firm, leads the Forestry & paper sector higher after broker Jefferies issued a bullish note on the company on Tuesday. The group is acquiring two box plants and a container board mill from Duropack for €120m, prompting Jefferies to lift its earnings forecasts for fiscal 2013 (FY13) by 4% - its fourth earnings per share upgrade of the year to date. The acquisition comprises two box plants in Ansbach, Germany and in Ceske Budejovice, Czech Republic, with 130,000 tonnes combined annual capacity. In addition, the Czech Republic operations have a small recycled container board mill with 105,000 tonnes annual capacity. In 2011, the Duropack assets reported revenues of €160m, earnings before interest, tax, depreciation and amortisation (EBITDA) of €23m with operating profit of €17m, which Jefferies notes equates to 5.2 times enterprise value/EBITDA. "We view this as an earnings accretive, strategically sensible acquisition with geographical and vertical integration synergies to follow from FY13 onwards," the broker said. Jefferies reiterates its BUY recommendation for Mondi and raises its target price from 665p to 700p. P.S. Here's some links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=256596&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=255276&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=257550&mode=2
DUROPACK BUYS BOOST MONDI’S EUROPE LEAD MONDI will buy 100% of three Duropack operations in Germany and the Czech Republic, further strengthening its leading position in corrugated packaging markets in Central and Eastern Europe. The €125m buyout would be funded from existing resources, the group said on Friday. Duropack operates across numerous Eastern European countries. The buyout involves two corrugated-box plants and a recycled container-board mill. For the year ended December last year, the overall Duropack operations generated unaudited, consolidated revenue of €160m. Unaudited, consolidated and adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) came to €23m. In May, Mondi bought 100% of its Swiecie mill in Poland. It also acquired Saturn Management. The group is also busy completing the buyout of outstanding share capital in German packaging firm Nordenia International. "Post the Nordenia acquisition, proforma 2011 net debt to ebitda is expected to be approximately 1.7 times," Mondi Group chief financial officer Andrew King said on Friday. "This already includes the impact of the Polish acquisitions. The acquisition of the Duropack operations would not have a material impact on Mondi’s credit metrics," he said. The group’s 2011 full-year net debt to ebitda was 0.8 times. ANALYSIS Rubin Renecke, an equity analyst at Kagiso Asset Management, said on Friday the acquisitions had added "substantially" to the group’s overall gearing. But, he said the company maintained its investment grade credit rating and its dividend policy. "… the acquisitions are profitable businesses that generate cash, and along with the Mondi Group’s existing strong cash generation, it will be able to reduce these gearing levels relatively quickly". Source: http://www.bdlive.co.za/business/industrials/2012/09/17/duropack-buys-boost-mondis-europe-lead
Paper and packaging firm Mondi has raised half a billion euros through the issue of a Eurobond, due to mature in September 2020. A Eurobond is an international bond which is denominated in a currency other than those native to the country where it is issued. Proceeds from the sale of the bonds, which carry a coupon of 3.375%, will be used for general corporate purposes. Andrew King, Mondi's Chief Financial Officer, said: "We are delighted with the support for our bond issue from a wide group of European institutional investors. The success of this transaction further strengthens the group by diversifying our sources of funding and extending our debt maturity profile." The Eurobond will be issued under Mondi 's European Medium Term Note programme, which is rated Baa3 by Moody's and BBB- by Standard and Poor's.
14 September 2012 As part of the dual listed company structure, Mondi Limited and Mondi plc (together "Mondi Group") notify both the JSE Limited ("JSE") and the London Stock Exchange of matters required to be disclosed under the JSE Listings Requirements and/or the Disclosure Rules and Transparency Rules and/or the Listing Rules of the United Kingdom Listing Authority. Mondi Group to acquire Duropack's operations in Germany and the Czech Republic Mondi Group has signed an agreement with Duropack GmbH ("Duropack"), for the acquisition of Duropack's operations (the "Operations") in Germany and the Czech Republic (the "Acquisition"), which consist of 2 corrugated box plants and one recycled containerboard mill. The two corrugated box plants consume approximately 130 thousand tonnes of containerboard per annum while the recycled containerboard mill is capable of producing 105 thousand tonnes per annum. The consideration to be paid for 100% of the Operations amounts to EUR125m and will be paid in cash at completion. Mondi Group will assume approximately EUR5m net cash as of the same date, implying an enterprise value of EUR120m. For the year ended 31 December 2011, the Operations generated unaudited pro forma consolidated revenues of EUR160m and unaudited pro forma consolidated adjusted EBITDA of EUR23m. The consideration payable for the Acquisition will be funded from existing resources available to Mondi Group. The Acquisition is in line with Mondi Group's strategy to strengthen its leading market position in corrugated packaging in central and eastern Europe. The completion of the deal is conditional on the approval by the relevant competition authorities and other customary closing conditions.
http://www.investegate.co.uk/Article.aspx?id=20120914083000PFBB4
Following the completion of the acquisition, Mondi Group will reorganise its Europe & International Division into four businesses: Uncoated Fine Paper;Packaging Papers; Fibre Packaging; Consumer Packaging. Nordenia will form part of the Consumer Packaging business, which will be led by Ralph Landwehr, the Chief Executive Officer of Nordenia. Mondi said it expects to capitalise on Nordenia's leading technology, product portfolio, customer know-how and manufacturing capability to expand further in these regions. Following the acquisition Mondi will retain undrawn committed bank facilities of more than €500m.
Mondi Group, the paper and packing company, has bought a controlling stake in Nordenia, a supplier of consumer packaging and hygiene components. Mondi has agreed to acquire 93.4% of the outstanding share capital of Nordenia International for a total cash consideration of €240m, on top of which Mondi will also assume €398m of Nordenia's debt. The consideration plus assumed debt places a total value on the company of €655m, which equates to 6.6 times Nordenia's 2011 earnings before interest, tax, depreciation and amortisation and 9.3 times 2011 earnings before interest and tax. Mondi is funding the transaction through a new €250m two-year committed bank debt facility. Nordenia has 12 fully invested operating facilities located in seven countries across Europe, North America and Asia. An additional wholly-owned greenfield plant is currently being constructed in China and is expected to begin operating in early 2014. The acquisition is expected to complete in the fourth quarter of 2012. The combination of Mondi and Nordenia is expected to result in pre-tax cost synergies in excess of €15m per annum by 2014. The acquisition is expected to enhance Mondi's underlying earnings immediately, with the group predicting a double digit percentage underlying earnings boost by 2014 once synergy benefits feed through.
BROKERS MAINTAIN BULLISH TARGETS FOR MONDI'S SHARES April 03 - Citigroup retains its BUY recommendation on Mondi with a price target of 700p April 12 - UBS maintains its neutral rating for Mondi but raises its target from 550p to 570p April 16 - Jefferies reiterates its BUY recommendation for Mondi with a price target of 665p. April 20 - Deutsche Bank retains it BUY rating on Mondi's shares with a price target of 640p. May 03 - Jefferies reiterates its BUY recommendation for Mondi with a price target of 665p. May 04 - Credit Suisse retains its neutral rating for Mondi with a price target of 655p. May 04 - Deutsche Bank retains it BUY rating on Mondi's shares with a price target of 640p. May 10 - Goldman Sachs retains its neutral rating but increases its target from 700p to 710p. Source: http://sharedealing.nandp.co.uk/broker-views/MNDI/Mondi P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=252803 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
MONDI GROUP TAKES CONTROL OF MONDI SWIECIE Mondi Group, the paper and packing company with dual listings in London and Johannesburg, has acquired a remaining stake in Mondi Swiecie to take full control of the Polish subsidiary. On May 18th, Mondi bought the remaining 3,407,257 shares in Mondi Swiecie that it did not already own, following the completion of an all-cash public tender offer during April. Mondi's stake in Mondi Swiecie has now been raised from 93.2% to 100.0%. Mondi paid 245m Polish zloty (€59m). The aggregate consideration paid by the Mondi for those shares representing 34% of the share capital of Mondi Swiecie which it did not already own before making the Offer, was PLN1.2bn(€294m). "Mondi Group will commence the procedure aimed at the delisting of Mondi Swiecie's shares from the Warsaw Stock Exchange," the firm said. Mondi manufactures a wide range of paper and packaging products, including office paper, corrugated packaging and industrial bags. BUT NOT BEFORE THE EU HAD AUTHORISED €83 MILLION OF STATE AID FOR MONDI SWIECIE ! The European Commission authorised, on 8 May, state aid of roughly €83 million granted by the Polish authorities for investments of nearly €382 million for the installation by Mondi Swiecie and Mondi Packaging Paper Swiecie of a new paper machine manufacturing containerboard and a new cardboard box plant in Swiecie (Kujawsko-Pomorskie).The Pomorskie region is eligible for regional aid (Article 107.3.a TFEU). The measure respects the rules for large investment projects: the aid intensity does not exceed the maximum authorised (22.66%), Mondi’s market share on the relevant paper markets is less than 25% before and after the investment and the capacity created by the new investments does not exceed 5%. Sources: http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20110432 http://www.europolitics.info/business-competitiveness/polish-aid-for-mondi-authorised-art333653-3.html
First up is paper and packaging group Mondi (LON:MNDI), where analysts have upgraded the EPS forecasts by 15.8% for next year. Expectations on the figures had waned during the latter half of last year but there was an uptick in sentiment last month, with six upgrades. Indeed shares in the £3bn market cap group have been racing since the start of the year. That has all been helped by positive sounds from the group on improving trading conditions, stronger order books and signs that prices in some of its markets are improving.
UBS raises target from 530p to 550p, neutral rating unchanged; Credit Suisse upgrades from underperform to neutral, target upped from 535p to 655p.
Mondi Sell 23-Feb-12 £264,848.11 Andrew King 45,582 @ 581.04p Mondi Sell 23-Feb-12 £104,046.23 Carol Hunt 17,907 @ 581.04p
Mondi Sell 23-Feb-12 £673,555.08 Peter Oswald 115,923 @ 581.04p Mondi Sell 23-Feb-12 £641,423.75 David A Hathorn 110,393 @ 581.04p
Credit Suisse downgrades Mondi from neutral to underperform, target price cut from 670p to 535p.
Paper and packaging firm Mondi expects profits for the first half of 2011 to be “considerably higher” than in the same period last year, it said in an announcement today.
http://www.investegate.co.uk/Article.aspx?id=20110722070500PEBAE
Margin pressures at Mondi Date: Thursday 05 May 2011 LONDON (ShareCast) - Paper and packaging firm Mondi said price increases have been pushed through across all of its major product lines, contributing to the group's best quarterly performance for some time. Underlying profit in the first quarter of 2011 of €187m was well ahead of the figure for the corresponding period of 2010 and was also better than the results achieved in the final two quarters of 2010. This reflects both the positive trading environment and a very strong operating performance, the company said. In the Europe & International geographical segment, all divisions recorded improvements in operating profit, both on the first quarter of last year and the last. The South Africa Division's underlying operating profit was up significantly on the comparable period in the prior year, and broadly in line with the fourth quarter of 2010. Cash flow from operations remains strong despite an increase in working capital, largely attributable to increased revenue and seasonal effects. Following the conclusion of the major capital projects in Swiecie and Syktyvkar, capital expenditure was markedly reduced when compared to the first quarter of 2010. The financial position of the group at 31 March 2011 remained robust with net assets largely unchanged from the position at 31 December 2010. The group expressed concern about the impact on margins that rising input costs are having, while the recent weakening of the dollar is a worry, in so far as it may make it more difficult to pass on price increases. “However, fundamentals generally remain strong in the group's key paper grades, with the upward pricing momentum witnessed in 2010 continuing into the first quarter of 2011. Given the group's favourable product and geographic exposures, coupled with its integrated low cost position and focus on performance, we are confident of making further progress in 2011,” the group said.
Summary Rising input costs are impacting on margins, and the recent weakening of the US dollar is a concern to the extent it may inhibit the ability to pass on further cost increases. However, fundamentals generally remain strong in the Group's key paper grades, with the upward pricing momentum witnessed in 2010 continuing into the first quarter of 2011. Given the Group's favourable product and geographic exposures, coupled with its integrated low cost position and focus on performance, we are confident of making further progress in 2011.
http://www.investegate.co.uk/Article.aspx?id=20110505070000P21C6
Paper and packaging firm Mondi releases its first quarter trading update tomorrow and RBS is expecting it to be a positive one. “We expect volume growth and price increases to offset input cost pressures (rising pulp, OCC and oil/energy related),” RBS says. Fiscal 2011 will be the “first full year for Mondi to benefit from optimising its newly expanded low-cost pulp and paper manufacturing capacity in emerging Europe, with its structurally superior demand growth for paper,” the broker added.
15 April 2011 MONDI signs new €750 million revolving credit facility Mondi is pleased to announce the signing of a new €750 million, 5-year revolving multicurrency credit facility to refinance its existing €1.55 billion credit facility that was due to mature in June 2012. This completes the refinancing of its €1.55 billion facility that was partially refinanced via Mondi's inaugural €500 million 7 year Eurobond in March 2010. The facility was self-arranged with a club of 10 relationship banks. The Mandated Lead Arrangers are : Barclays Capital, BNP Paribas, Citi, Commerzbank AG, Deutsche Bank AG, Erste Group Bank AG, Société Générale Corporate & Investment Banking, Raiffeisen Bank International AG, The Royal Bank of Scotland plc and UniCredit. Andrew King, Mondi's Chief Financial Officer, said: "We are delighted with the confidence shown in the Mondi Group by our relationship banks through this new facility. The success of this transaction further strengthens the Group by extending our debt maturity profile and provides us with additional financial flexibility."
http://www.investegate.co.uk/Article.aspx?id=20110415070000P512F