(Alliance News) - Mondi PLC on Thursday reported its interim profit more than halved and revenue declined due in part to softer demand, coupled with weaker prices.
The Weybridge, England-based paper and packaging firm said pretax profit from continuing operations, excluding Russian operations, slumped by 55% to EUR418 million for the six months that ended June 30, from EUR933 million a year earlier.
Most of its key packaging and paper products recorded lower volumes, exacerbated by the impact of customer destocking.
Selling prices across the group's key paper grades declined during the first half of 2023, it said.
Mondi sold its three Russian packaging converting operations for EUR30.4 million. This disposal is not connected with JSC Mondi Syktyvkar, a pulp and paper mill.
The company said it remains committed to divesting Syktyvkar and continues to assess all alternative divestment options.
From continuing operations, revenue for the first half dropped by 14% to EUR3.88 billion, from EUR4.51 billion, dragging down earnings before interest, taxes, depreciation and amortisation.
Underlying Ebitda was 28% lower at EUR680 million from EUR942 million.
Despite lower profit, Mondi declared an interim dividend of 23.33 euro cents, up 7.7% from 21.67 cents.
Earnings per share slumped by 57% to 63.7 cents from 148.4 cents.
Mondi Chief Executive Andrew King said demand and prices so far in 2023 had declined sequentially with the exception of containerboard prices, which stabilised in the later part of the half year.
"We saw some benefit from lower input costs which continue to ease as we progress into the third quarter of the year," Mondi said.
Mondi still expects total capital expenditure for this year to be around EUR800 million and EUR850 million, compared to EUR508 million in 2022.
It expects total capex to remain elevated for the next two years as it progresses and commissions its EUR1.2 billion pipeline of approved expansionary projects.
Shares in Mondi were down 2.8% to 1,298.50 pence each in London on Thursday morning.
By Artwell Dlamini, Alliance News reporter
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Mondi (MNDI)