Mondi slashes dividend as weak pricing hammers profits

(Sharecast News) - Paper and packaging group Mondi slashed its dividend after a 29% slump in annual profits in 2025, as it pointed to further declines in paper prices over the first quarter as a prolonged cyclical downturn continues across the sector. The company declared a final dividend of just 4.92 euro cents for 2025, down from 46.67 cents the year before, taking the total payout to just 28.25 cents, down from 70 cents previously.

Chief executive Andrew King said the board is taking "clear and disciplined decisions on capital allocation", including moving its dividend back in line with the group's cover policy of two to three times underlying earnings. Decisions also include a planned €100m reduction in capital expenditure in 2026 and further cost-optimisation opportunities, he said.

"Combined with our robust financial position and proactive liquidity management, these actions put us on a strong footing for the year ahead and position us well for the future, King said.

Pre-tax profits totalled €269m in 2025, down from €378m the year before, as weaker margins outweighed a 3% improvement in revenues to €7.66bn.

The top-line improvement was driven by higher sales volumes and revenue contribution from the acquisition of Schumacher Packaging's Western Europe operations, which completed last April, which offset sharply lower uncoated fine paper and pulp selling prices.

"Going into 2026, it remains unclear when geopolitical and macroeconomic conditions will improve. Paper prices are modestly lower, on average, than those seen in the final quarter of 2025. We are, however, confident in our ability to navigate these headwinds effectively through disciplined volume growth as we leverage our recent capacity expansions, strong margin management and cost optimisation," King said.