Maintenance shuts at Mondi weigh on Q3 profits

16th Oct 2014 07:03

Paper and packaging group Mondi said it traded in line with expectations in the third quarter, though underlying sales were flat on last year and profits were held back by planned maintenance shutdowns.Underlying operating profit in the three months to 30 September totalled €174m, down 10% on the previous quarter.The group said that previously-announced price increases in the key packaging paper markets and lower wood costs were offset by the major annual maintenance closures at its fine paper and container board facilities, which had a €30m adverse impact on the bottom line.The upcoming kraft paper maintenance shuts are expected to have a €15m-20m impact in the fourth quarter.As for currency movements, export sales in the South Africa division were helped by a stronger US dollar, while the weaker rouble weighed on the more domestically-focused Russian businesses. Mondi said that the recent strengthening of the greenback against the euro should help European pricing in packaging grades.Looking ahead, Mondi said that while "much depends" on the macro environment in its core European markets, it "remains confident of continuing to deliver an industry-leading performance"."Recent price increases in a number of the packaging paper grades and continued strong operating performance across the group should provide solid support for the group to continue to deliver in line with management expectations," the company said.