Annual profits at paper and packaging maker Mondi fell by a third on the back of “significantly lower” average selling prices for pulp and paper grades and the Covid-19 pandemic.
The company on Thursday said pre-tax profits for the year to December 31 fell 30% to 77m. Underlying core earnings declined 18% to 1.35bn, while revenue was down to 6.6bn from 7.2bn.
Mondi declared a total dividend of 60 euro cents a share, up 5% year on year. Cash generation for the company totalled 1.48bn.
Chief executive Andrew King said the results were “testament to the strength of our business model in the face of significantly lower average selling prices across our key pulp and paper grades, and the challenges brought by Covid-19”.
“We finished the year positively, with strong demand in the packaging businesses supported by the long-term growth drivers of sustainability and e-commerce.”
Mondi said it was “confident in the structural growth drivers in the packaging sectors in which we operate and the strength of our paper position” despite an uncertain near-term macroeconomic outlook.
“We are seeing strong order books supporting price increases in most packaging and pulp grades, and are encouraged by the improving uncoated fine paper demand,” the company said.
It added that it planned longer project-related maintenance shutdowns and was seeing input cost pressures and currency headwinds, although the benefits from its capital expenditure programme would continue to support performance.
