News

Mayr-Melnhof, the Austrian producer of cardboard and packaging, reported a 6% drop in first-half operating earnings and said it expected "very cautious" demand in its core Western European markets in the coming months.

Operating profit was €80.3m (£63.3m) in the six months to 30 June, as rising energy costs particularly affected cartonboard production at MM Karton.

MM Packaging managed to "stand its ground" through capturing market share and increasing productivity, the firm said.

Sales across the group grew by 7% to €895m.

The average order backlog for MM Karton peaked at 63,000 tons during the first half compared with 181,000 tons in the same period in 2007.

Cartonboard sales rose by 3% to 848,000 tons, compared with 820,000 tons.

Increased sales to non-European markets (21%) were necessary to ensure capacity utilisation, the firm said. Sales in Europe were down seven percentage points to 79%.

Mayr-Melnhof said MM Karton would increase its cartonboard prices in the autumn to counter rising natural gas prices and prepare for "selective board machine downtime".

MM Packaging saw a 5% increase in tonnage to 336,000 tons and met the challenge of rising costs by improving productivity and efficiency during the first half.

The division will continue to focus on cutting costs going forward.

Mayr-Melnhof said it would continue to seek new business, supported by acquisitions, in the second half.