Mondi shares surge on better-than-expected results

(Sharecast News) - Mondi shares surged around 10% on Thursday after the packaging group posted a better‑than‑expected first‑half performance and signalled improving trading conditions heading into the second half. The company said pricing actions, stronger volumes and early benefits from its network optimisation programme helped offset weaker selling prices and elevated input costs.

Underlying EBITDA came in at €379m, down from €564m a year earlier, with results held back by higher wood and energy costs and a €35m forestry fair‑value loss. Mondi said momentum improved through the period, with order books strengthening and packaging‑paper prices rising.

Cash generated from operations slipped to €347m from €416m, while capital expenditure guidance for 2026 was trimmed to €500m as major projects near completion. The group booked €320m in special‑item charges linked to impairments and restructuring, though only €24m will have a cash impact.

Mondi declared an interim dividend of 9.42 cents, down from 23.33 cents last year, but said it expects trading to continue improving as supply chains stabilise and demand strengthens across key European markets.

CEO Andrew King said geopolitical tensions had disrupted supply chains and pushed up costs but highlighted improving order books and higher packaging‑paper prices heading into the second half.

Group revenue rose to €3.975bn from €3.909bn, with the increase driven mainly by the contribution from the acquired Schumacher plants. Mondi said higher organic volumes helped, although this was offset by lower average selling prices across its paper grades.

Selling prices fell through the second half of 2025 and into early 2026, leaving the group entering the year below the average levels seen in the prior first half. Price increases were implemented during H1 and some initial benefits were realised, but average prices for the period still lagged last year. The company expects the full uplift from these increases to come through in the third quarter.

Input costs were higher year on year, with wood prices rising in Central and Eastern Europe and additional pressure from energy, raw materials and logistics due to the conflict in the Middle East. Mondi said these costs remain above average H1 levels as it moves into the third quarter.

The group noted that while pricing and volumes are improving, cost inflation continues to weigh on margins, reinforcing the importance of its network optimisation and disciplined capital‑allocation plans.

Reporting by Frank Prenesti for Sharecast.com