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Annual Results

Mondi improves FY pretax profit, lifts dividend

23 February 2017 07:23

Mondi has improved its FY pretax profit to €843m, from €796m, in what it billed as a strong performance. It hiked its total dividend to 57 cents a share, from 52 cents.

CEO David Hathorn said the strong performance built on Mondi's track record of steadily improving profitability over the last five years.

"We saw good contributions from all our businesses despite pricing headwinds in a number of key paper grades," he said in a statement.

Mondi had made considerable progress in driving growth via its capital investment programme, delivering incremental operating profit of about €50m in 2016 from recently completed capital projects, with a further €30m anticipated in 2017.

"In addition to our significant pipeline of projects already in progress, the Boards have approved the replacement of the recovery boiler at our Steti mill in the Czech Republic and installation of a 90,000 tonne per annum machine glazed speciality kraft paper machine for a total investment of €470m," he said.

Mondi had completed four acquisitions totalling €185m in 2016, enhancing its product offering and geographic reach in its Corrugated and Consumer Packaging businesses.

"Our outlook for the business is positive," said Hathorn.

The company had implemented or announced price increases in containerboard, sack kraft and uncoated fine paper grades, supported by good demand.

"We expect some inflationary cost pressures across the Group and a lower forestry fair value gain," he added.

"Furthermore, we anticipate a more challenging trading environment in certain uncoated fine paper markets following price erosion in Europe over the course of 2016, combined with emerging market currency volatility.

"However, we expect to continue to benefit from contributions from our recently completed capital projects and acquisitions, together with steady organic growth in our downstream converting businesses."

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