JSE-listed paper and packaging manufacturer Mondi has noted improved market conditions in the first quarter of the year, with stronger order books and higher sales volumes across its range of paper grades compared with the last quarter of 2023.

Average selling prices were, however, lower in the reporting quarter, but they have started ticking up in the second quarter, it says in a May 3 trading update to shareholders.

In corrugated packaging, containerboard sales volumes were higher than in the preceding quarter, while the corrugated solutions division delivered a stable performance.

Mondi’s flexible packaging saw good sales volume growth, which was largely offset by lower average selling prices. Uncoated fine paper sales benefited from price increases implemented in the quarter, however, a lower forestry fair value gain impacted on comparative performance.

Underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter were in line with Mondi’s expectations at R214-million, which is lower than the underlying Ebitda of R260-million generated in the fourth quarter of 2023.

The underlying earnings for the quarter under review include a one-off R32-million loss owing to devaluation of the Egyptian pound.

Mondi paid a R1.60 special dividend to shareholders in the quarter, which stems from net proceeds received from the sale of all the group’s Russian assets.

The special dividend was accompanied by a share consolidation whereby shareholders received ten new ordinary shares for every 11 existing ordinary shares held.

“Market demand has continued to improve in the first quarter of the year. While we have entered the year with lower selling prices compared with the prior year, improvements in demand have supported our initiatives to increase selling prices across the business.

“We remain well positioned to benefit from this growing demand with our strong operational leverage, broad product offering and organic growth investment projects,” says CEO Andrew King.