News

Mondi Group, the packaging and paper multinational, has said its operating profit for the first four months of 2008 is ahead of the same period last year.

The firm said it was helped by a strong performance from the Europe and international division and, in particular, its bags and specialities business unit, where good price increases were secured in kraft paper and the related downstream converting operations.

Mondi said corrugated business unit volumes had held up in its Europe and international division but prices were, as expected, hit by the weak US dollar.

It said its bags and specialities business benefited from continuing strong sack kraft paper and converted bag prices, up around 5% since the year end. However, converting volumes had been soft as demand from the construction industry, particularly in Southern Europe, started to slow.

The specialities business benefited from the acquisition of Unterland in the second half of 2007, which was trading in line with expectations.

Mondi reported that external fibre cost pressures had continued to ease but were up on the comparable period given the steep increase in external fibre costs, up around 25%, in the first half of 2007.

It said other input cost pressures were a concern and rising oil prices continued to feed through into rising energy and transport bills.

The further weakness of the US dollar had led to an increase in imports and a reduction in exports for most paper grades, including uncoated fine paper and containerboard, which had hit selling prices.

Mondi has also appointed Phil Dean to the new role of sales and marketing director for its UK corrugated box plants.

The company's share price rose 13p this morning to reach 417.50p.