Resilient Growth: Mondi Beats Odds in Challenging Markets

  • Mondi plc reports strong H1 2023 performance despite challenging markets, with underlying EBITDA of €680 million (down 28%) and basic EPS of 67.0 euro cents (down 32%).
  • Strategic investments of €1.2 billion and focus on sustainability drive future growth.
  • Ongoing operational changes include the sale of Russian operations and declaration of an interim dividend of 23.33 euro cents per share (8% increase).
Devastating Floods

Mondi plc, a leading sustainable packaging and paper company, has released its financial results for the first half of 2023, showcasing strong performance amidst challenging market conditions. Despite facing headwinds, the company’s continuing operations delivered solid results, and Mondi remains focused on its strategic growth plans.

Weathering the Storm

The company reported an Underlying EBITDA of €680 million for the first half of 2023, representing a 28% decrease compared to the same period in 2022 (€942 million). Basic underlying earnings per share (EPS) amounted to 67.0 euro cents, down 32% from the previous year (98.7 euro cents). The decline in performance can be attributed to the difficult market environment characterized by declining demand and prices across several segments.

However, Mondi demonstrated its strong cash generative characteristics, with cash generated from operations reaching €554 million, a 7% improvement from the previous year (€519 million). The company maintained a robust balance sheet, with net debt at 0.8 times underlying EBITDA, up from 0.5 times at the end of December 2022.

Strategic Investments for Growth

Despite the challenging market conditions, Mondi continues to invest in expansionary projects to drive future growth. The company has committed €1.2 billion to these projects, which remain on track and on budget. Additionally, Mondi announced the acquisition of the Hinton Pulp mill in Canada, a move that aligns with its strategy for sustainable growth and enhances its portfolio of offerings.

Mondi’s commitment to sustainability remains a priority, and it made significant progress in delivering on its MAP2030 sustainability commitments during the first half of 2023. As a global leader in packaging and paper, the company strives to create circular-driven solutions and take action on climate issues.

Operational Changes and Challenges

As part of its growth strategy, Mondi completed the sale of three Russian packaging converting operations, generating proceeds of €30 million. However, the ongoing sale process of the Syktyvkar mill in Russia faces challenges due to the evolving political and regulatory environment in the region.

Interim Dividend and Shareholder Returns

Mondi declared an interim dividend of 23.33 euro cents per share for the year ending 31 December 2023. This represents an 8% increase compared to the interim dividend paid in the previous year (21.67 euro cents per share). Shareholders on the register of Mondi plc on 25 August 2023 will receive the dividend on 29 September 2023.

Outlook and CEO’s Statement

Despite the challenging market environment, Mondi’s CEO, Andrew King, expressed confidence in the company’s performance and outlook. He highlighted the stabilization of containerboard prices in the later part of the half-year and the benefit from lower input costs, which are expected to ease further in the third quarter of the year.

Mondi remains committed to enhancing productivity and efficiency while delivering on its expansionary projects and sustainability commitments. The company’s compelling portfolio of sustainable packaging and paper products, combined with its resilient business model, positions it well to deliver attractive returns and sustainable value accretive growth.

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