Mondi operating profit shrinks

Paper and packaging firm Mondi said its overall performance for the first quarter 2012 was in line with company expectations as underlying operating profit fell.

"As anticipated, the generally weaker trading environment seen towards the end of the prior year continued into the early part of the first quarter," the group said in a company statement.

Operating profit fell to €120m in the first quarter from €179m a year earlier.

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"Following the low levels of demand seen towards the end of the previous quarter and into the early part of 2012, there was a clear trend of improving demand through the period under review, such that, on average, sales volumes were higher than the previous quarter across all paper grades," said Mondi.

Selling prices across all major paper grades were on average lower than those achieved in the previous quarter while a trend of improving prices towards the end of the quarter was evident.

The benefits of these improving prices, partly offset by rising fibre input costs, are expected to be realised from the second quarter onwards, it explained.

"While macroeconomic uncertainties remain, encouragingly, there are clear signs of an improvement in the trading environment, with volumes recovering and positive pricing momentum witnessed in most grades over the review period," the group said.

CJ