Mondi shares jump as fourth-quarter profits beat expectations

Thu, 19th Feb 2026 09:50

Feb 19 (Reuters) - Mondi's shares rose ‌more than 6% on Thursday after the paper and packaging company's fourth-quarter profits beat analysts' expectations, helped ⁠by its focus on cutting costs amid a paper ⁠market downturn.

The British company, which designs sustainable paper and packaging products, has been reorganising its business to cope with a challenging economic environment, an industry-wide demand slowdown and stiff competition.

Mondi has laid off about 1,000 employees over the ‌past year and said it was expecting a further 200 job cuts from the closures of three plants.

The company also cut its dividends by 60%. It said the board had recommended bringing the dividend back in line with cover policy of two to three times underlying earnings cover.

Jefferies analysts said the results were "better than feared" with fourth-quarter adjusted core ‌profit coming at 214 million euros, above expectations of 203 million euros.

Mondi's shares were up 3% by 0901 GMT.

ANALYSTS SAY ‌COMPANY WELL-POSITIONED FOR RECOVERY

JPMorgan analyst Detlef Winckelmann said the results suggested Mondi is nearing the end of its earnings downgrade cycle, though elevated gearing and uncertainty over supply and demand in corrugated markets were likely to weigh on the stock in the near term.

CEO Andrew King noted that ‌average paper prices at the start of the year were still slightly below the levels seen in the final quarter of 2025.

Finnish forestry groups Stora Enso and UPM recently reported weaker ⁠quarterly ⁠profits, and warned of a tough year ahead due to ‌lower pulp prices, weak consumer confidence and rising geopolitical tensions.

But Jefferies analysts suggested that Mondi is well-positioned for a recovery as industry participants announce price increases and Mondi's cost-cutting actions and lower capex support ‌cash flow generation.

The company lowered its capital expenditure expectations for 2026 to about 550 million euros from previously guided 650 million euros.

Mondi