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Mondi (MNDI) Director name: Mr David A Hathorn Amount sold: 89,752 @ 842.49p Value: 756,143
Top Director Sells Mondi (MNDI) Director name: Mr Peter Oswald Amount sold: 92,683 @ 842.49p Value: 780,836
"Sales volumes recovered into the second quarter and this, in turn, saw some price recovery in certain of the group's major grades going into the second half of the year. "The third quarter was impacted by the traditional European summer slowdown in trading, but a strong finish to the year, with good volumes and reasonable price levels in Europe, meant the group was able to deliver full year underlying operating profit of €568m, 9.0% down on the very strong prior year result."
Profit before tax contracted 19 per cent to 371m euros in the full year ending December 31st at paper and packaging group Mondi, an interim management statement has shown. Group revenue rose 1.0% to €5.8bn while underlying operating profit dropped 9.0% to €568m. Basic earnings per share slid 3.0% to 69.6 cents. The total dividend per share rose 8.0% to 28 cents. The group return on capital employed contracted to 13.7% from 15%. In a financial outlook issued by the company, the group reported: "While the first quarter was particularly difficult, characterised by a continuation of the weak order books seen towards the end of 2011, trading picked up as the year progressed.
Mondi: Deutsche Bank increases target price from 640p to 930p and keeps its buy recommendation.
another good week.
Mondi expects basic underlying earnings per share (EPS) in 2012 to be between 67 and 71 euro cents, broadly in line with 68.1 cents the year before. However, basic EPS is expected to fall from 66.1 cents to 48-52 cents.
Paper and packaging group Mondi has set out its earnings guidance for the 2012 full year, saying that its bottom line performance improved in the fourth quarter. Ahead of the company's full-year results announcement on February 21st, the company said that underlying operating profit for the fourth quarter of 2012 is expected to be above the 135m reported in the third quarter and the 132m registered in the fourth quarter of 2011. However, the full-year 2012 underlying operating profit is still expected to be below the 622m achieved in 2011. Meanwhile, the company is to take a special item charge of 92m in 2012, well above the 53m realised the year before, mainly due to the previously announced loss on the October disposal of Aylesford Newsprint, as well as restructuring and asset impairment costs in the industrial bags sector of Fibre Packaging.
Mondi: Jefferies ups target price from 760p to 860p, while reiterating a buy recommendation.
Mondi: Credit Suisse increases target price from 780p to 980p upgrading to outperform.
Mondi: UBS raises target price from 670p to 720p reiterating a neutral rating.
£7.00 by end of week.looking good
Paper and packaging group Mondi has said that following the completion of its acquisition of Duropack's operations earlier this month, it has subsequently entered into discussions with employees about the proposed closure of the one hundred thousand tonne recycled containerboard mill in the Czech Republic. The company said that the decision follows the deterioration in market conditions in the European containerboard market and increased competition, which has negatively affected the mill's ability to remain competitive. The costs of the closure are expected to be less than €3.0m. "The group's strategy is to focus on further developing its leading market position in corrugated packaging in the Czech Republic and emerging Europe," the company said. "Mondi will take all reasonable action to support affected employees including providing an outplacement programme and will keep employees, customers and other stakeholders informed of the process."
Mondi: UBS raises target from 660p to 670p, neutral rating unchanged; Credit Suisse downgrades to neutral, 780p target kept.
The weaker South African rand and stronger US dollar versus the euro benefited mainly the South Africa division and, to a lesser extent, the Packaging Paper business. Net debt at the end of the reporting period was €1,188m, an €85m improvement from the end-June position. However, the acquisitions of Nordenia and the Duropack corrugated assets as well as the disposal of Aylesford will increase net debt in the fourth quarter. The group continues to be strongly cash generative and working capital levels remain within the group's targeted range. Capital expenditure increased during the period due to the preponderance of maintenance shut-downs during the period as well as increased spending on the energy improvement projects. Total capital expenditure for the year is expected to be around 90% of the group's annual depreciation charge. "Price increases in the main packaging paper grades offer support for the remainder of the year. Looking further forward, continued soft demand on the back of the prevailing macroeconomic uncertainties and some additional capacity expansions in certain of our core markets remain a concern, although it is encouraging to note that the strong supply side fundamentals remain generally intact," the group's statement concluded
Profits of dual listed paper and packaging group Mondi were flat year-on-year in the traditionally quiet summer months, in line with management expectations. Underlying operating profit for the quarter ended September 30th was €135m, barely changed from €136m in the third quarter of last year, but below the €150m achieved in the prior quarter. The group said the profit performance reflects a stable trading environment considering the impact of the traditionally weaker European summer months, annual maintenance shut-downs at a number of the group's larger operating sites during the quarter and ongoing strong cost containment. Sales volumes were, on average, similar to those achieved in the previous quarter but above those of the comparable prior year period, although demand in the downstream converting operations was below that of the prior year. Third quarter average benchmark selling prices across all grades were below those of the comparable prior year period. Selling price increases were realised in kraft paper during the quarter, while price increases for container-board are due to kick in early in the fourth quarter of 2012. On average, input costs in the third quarter were similar to the previous quarter and below that of the comparable prior year period. Benchmark recovered fibre costs decreased by 23% in the quarter and were down 30% year-on-year. As a result of the anticipated start-up of new recycled container-board capacity in Poland in early 2013, regional market pressure on recovered fibre costs is expected in the near term.
Mondi: Jefferies raises target from 700p to 760p, buy rating kept.
Summary Price increases in the main packaging paper grades offer support for the remainder of the year. Looking further forward, continued soft demand on the back of the prevailing macroeconomic uncertainties and some additional capacity expansions in certain of our core markets remain a concern, although it is encouraging to note that the strong supply side fundamentals remain generally intact. Contact details: Mondi Group David Hathorn +27 (0)11 994 5418 Andrew King +27 (0)11 994 5415 Lora Rossler +27 (0)11 994 5400 / +27 (0)83 627 0292 FTI Consulting Richard Mountain +44 20 7269 7186 / +44 20 7909 684 466 Chloe Webb +27 (0)11 214 2421 Editors' notes Mondi is an international packaging and paper Group, with production operations across 29 countries and revenues of EUR5.7 billion in 2011. The Group's key operations are located in central Europe, Russia and South Africa and as at the end of 2011, Mondi Group employed 23,400 people. Mondi Group is fully integrated across the paper and packaging process, from the growing of wood and the manufacture of pulp and paper (including recycled paper), to the conversion of packaging paper into corrugated packaging, industrial bags and coatings. The Group is principally involved in the manufacture of packaging paper, converted packaging products and uncoated fine paper (UFP). Mondi Group has a dual listed company structure, with a primary listing on the JSE Limited for Mondi Limited under the ticker code MND and a premium listing on the London Stock Exchange for Mondi plc, under the ticker code MNDI. The Group has been recognised for its sustainability through its inclusion in the FTSE4Good Global, European and UK Index Series (since 2008) and the JSE's Socially Responsible Investment (SRI) Index since 2007. The Group was also included in the FTSE350 Carbon Disclosure Leadership Index for the second year. Sponsor in South Africa: UBS South Africa (Pty) Ltd
Financial position Net debt was EUR1,188 million at the end of the quarter, down EUR85 million on the half-year. The acquisitions of Nordenia and the Duropack corrugated assets as well as the disposal of Aylesford will increase net debt in the fourth quarter of 2012. On 21 September 2012, Mondi successfully launched a 3.375%, 8-year, EUR500 million Eurobond maturing in September 2020. The Group also cancelled its unutilised EUR250 million bridging facility arranged specifically for the acquisition of Nordenia. On 29 October 2012, Mondi issued an unconditional and irrevocable guarantee to the holders of the Nordenia bond. During the quarter, the Group's investment grade credit ratings of Baa3 (Moody's Investor Services) and BBB- (Standard and Poor's) were reaffirmed. The Group continues to be strongly cash generative and working capital levels remain within the Group's targeted range. Capital expenditure increased during the period compared to the previous quarter due to the preponderance of maintenance shuts during the period as well as increased spending on the energy improvement projects. Total capital expenditure for the year is expected to be around 90% of the Group's annual depreciation charge. Finance charges during the period were lower than the previous quarter on both lower average net debt and lower effective interest rates, but are expected to increase in the fourth quarter as net debt rises following the completion of the Nordenia and Duropack acquisitions. The average maturity of the Group's committed debt facilities at 30 September 2012 was approximately 5 years. The Group had available EUR941 million of committed, unutilised borrowing facilities at 30 September 2012, immediately preceding the completion of the Nordenia transaction.
Group Performance Overview Underlying operating profit for the third quarter ended 30 September 2012 was EUR135 million (year to date EUR405 million, 2011 EUR490 million) in line with that of the comparable prior year period (Q3 2011 EUR136 million) and below that of the prior quarter (Q2 2012 EUR150 million). This was in line with expectations and reflects a stable trading environment considering the impact of the traditionally weaker European summer months, annual maintenance shuts at a number of the Group's larger operating sites during the quarter and ongoing strong cost containment. Sales volumes were, on average, similar to those achieved in the previous quarter but above those of the comparable prior year period, although demand in the downstream converting operations was below that of the prior year. Third quarter average benchmark selling prices across all grades were below those of the comparable prior year period. Selling price increases were realised in kraft paper during the quarter and price increases for containerboard are effective from early in the fourth quarter of 2012. On average, input costs in the third quarter were similar to the previous quarter and below that of the comparable prior year period. Benchmark recovered fibre costs decreased by 23% in the quarter and were 30% below the comparable prior year period. As a result of the anticipated start-up of new recycled containerboard capacity in Poland in early 2013, regional market pressure on recovered fibre costs is expected in the near term. The weaker South African rand and stronger US dollar versus the euro benefited mainly the South Africa division and, to a lesser extent, the Packaging Paper business. During the quarter, all conditions precedent for the acquisition of Nordenia International AG were met and, with effect from 1 October 2012, the Group acquired a 99.93% interest in Nordenia for a cash consideration of EUR259 million. As part of its continuing focus on its core businesses, the Group concluded the sale of its 50% share in Aylesford Newsprint to The Martland Holdings on 2 October 2012. The shares were sold for a nominal consideration following recapitalisation of the business. The net cash flow effect of the transaction was a EUR17 million outflow, while the estimated loss on disposal was EUR71 million. Following the sale of Aylesford Newsprint, the Group has restructured its reporting in South Africa to combine the Mondi Shanduka Newsprint joint venture into the South Africa division.
Interim Management Statement Mondi Limited (Incorporated in the Republic of South Africa) (Registration number: 1967/013038/06) JSE share code: MND ISIN: ZAE000156550 Mondi plc (Incorporated in England and Wales) (Registered number: 6209386) JSE share code: MNP ISIN: GB00B1CRLC47 LSE share code: MNDI As part of the dual listed company structure, Mondi Limited and Mondi plc (together 'Mondi Group') notify both the JSE Limited and the London Stock Exchange of matters required to be disclosed under the JSE Listings Requirements and/or the Disclosure and Transparency and Listing Rules of the United Kingdom Listing Authority. Mondi Group: Interim Management Statement 31 October 2012 This interim management statement provides an update on the financial performance and financial position of the Group since the half-year ended 30 June 2012, based on management accounts up to 30 September 2012 and estimated results for October 2012. These results have not been audited or reviewed by Mondi's external auditors. Audited results for the year ending 31 December 2012 will be published on or around 21 February 2013. Except as discussed in this interim management statement, there have been no other significant events or transactions impacting either the financial performance or financial position of Mondi since 30 June 2012 up to the date of this statement.
Mondi is ideally placed to capitalise on growing demand in emerging economies and Nordenia increases its exposure to resilient fast-moving consumer goods. What's more, its shares are rated at less than 11 times forecast earnings for 2013, which is lower than its rivals. On that rating, they hardly reflect the benefit of recent acquisitions.........as always dyor and gl.
What's more, if demand improves in Europe, the upside for the share price could be substantial. According to broker Jefferies, if Mondi can grow organic revenue by 2 per cent a year to 2014, and deliver EPS of 82¢ and cash profits of €1.1bn in 2013, the shares could be worth 820p. That doesn't seem far-fetched, especially now that Mondi has sold half of its share of the Aylesford newsprint business. True, it had to take a €71m hit, but supplying paper to national newspapers is a dying trade.
Factoring in the acquisitions, UBS has upgraded its EPS forecasts for next year by 8 per cent and by 11 per cent for both 2014 and 2015. Other City analysts are likely to follow suit and could upgrade following Mondi's next trading update due at the end of the month. Both prices and volumes improved in the second quarter after last year's destocking ran its course. Capacity reductions in Europe and the strong dollar's curb on imports from the US mean price rises are going through "fairly quickly", according to industry sources. Indeed, the European price of so-called kraftliner (paper for corrugated packaging made from fresh wood) rose 3 per cent alone in the first week of October and is up 11 per cent since February. Mondi's low-cost model is generating a return on capital of 13.3 per cent, which is impressive at this stage of the economic cycle. And generating €353m of cash from operations helped bankroll an 8 per cent increase in the half-year dividend. Expect a similar outcome for the full year given the health of the balance sheet. Mondi predicts net debt of just 1.7 times cash profits at the beginning of 2013, but UBS believes earnings from acquisitions should get that down to 1.4 times later in the year.