Mondi’s profit has fallen, the paper and packaging firm said on Tuesday in an interim statement.
”In line with expectations, the group’s underlying operating profit in the third quarter of 2009 came in modestly below that of the second quarter of 2009,” Mondi said.
However, Mondi said it was beginning to feel the benefits of its recently completed cost-cutting programme.
Volumes in most areas of the business continued to recover from the lows reached earlier this year, but this had been offset by lower average selling prices for the majority of the group’s products, Mondi said.
”Price increases have recently been announced in most of our key European packaging grades,” Mondi said.
According to its interim statement, Mondi’s Europe and international division continued to perform well, with underlying operating profit for the third quarter similar to the second quarter thanks to a ”good post-summer seasonal pick-up in demand”.
However, it said its South African unit continued to face difficulties from a combination of softer volumes, cost pressures and weak export prices, exacerbated by a very strong rand.
The company said the impact of new uncoated fine paper capacity expected to come on to the market later this year was still unclear.
However, it said that the extent of any recovery was largely dependent on the pace and extent of the global economic recovery, ”which remains uncertain”.
Nevertheless, Mondi said it was well positioned to benefit as market conditions improve.
Mondi’s annual results are expected to be released on February 23 2010. — Sapa