http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.16Change: 0.14
R/$ = 10.94Change: 0.10
Au 1237.39 $/ozChange: 2.64
Pt 1369.00 $/ozChange: 6.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 03, 2012

Mondi operating profit falls, says demand picking up

Back
Africa|Flow|Mondi|Mondi Swiecie|Projects|Standard & Poor|Africa|Europe|South Africa|Electricity Price Hikes|Energy|Flow|Paper
Africa|Flow|Projects||Africa|||Energy|Flow|
africa-company|flow-company|mondi|mondi-swiecie|projects|standard-poor|africa|europe|south-africa|electricity-price-hikes|energy|flow-industry-term|paper
© Reuse this



JSE- and LSE-listed pulp and paper group Mondi on Thursday reported lower underlying operating profit as the weaker trading environment seen towards the end of 2011 continued into the early part of 2012.

But the company said demand was improving, with its sales volumes in the three months to the end of March, on average, higher than in the previous quarter.

Underlying operating profit fell to €120-million in the first quarter, from €132-million in the final quarter of 2011 and €179-million in the prior year.

Although selling prices across all major paper grades were on average lower than those achieved in the previous quarter, Mondi said 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, were expected to be realised from the second quarter onwards.

Average input costs were lower than the prior quarter, but increased during the period with closing benchmark prices being higher than those at December 31.

Benchmark hardwood pulp prices had increased by 15% at March 31 from December 31 levels and recovered paper increased by 30% over the same period.

Wood costs remained at similar levels to those of the previous quarter and spot prices have started to increase on the back of improving demand, with the expectation of further price recovery in noncontracted volumes as the year progresses.

Price increases of up to 10% have been announced effective from June.

Mondi’s South Africa division’s underlying operating profit was well down on the prior comparable year period and the final quarter of 2011.

Domestic sales of uncoated fine paper and pulp improved, while export sales of white-top containerboard saw lower average selling prices and weaker volumes owing to ongoing destocking in Europe.

Lower pulp selling prices severely impacted returns; however, prices have trended upwards from their lows in January, which should contribute to an improved performance in the second quarter, the group said.

The South African business, Mondi Shanduka Newsprint, also continued to be impacted by a rising cost base, largely owing to a series of significant electricity price hikes.

Mondi stated that selling price increases had been negotiated and were expected to take effect from the second quarter, restoring Mondi Shanduka Newsprint to a reasonable level of profitability.

The group’s cash flow for the quarter remained strong, while working capital levels were maintained in the targeted range of 10% to 12% of turnover.

Capital expenditure was at similar levels to that incurred in each of the previous two quarters of 2011 and was expected to increase during the remainder of the year as expenditure on the energy and debottlenecking investment projects start to ramp up.

The group said in a statement that its financial position at March 31 remained robust with net debt reducing further from €831-million on December 31 to €792-million.

The successful completion in April of the tender offer to acquire the 34% noncontrolling interest in its Polish unit, Mondi Swiecie, to increase the group’s holding to 93.2%, resulted in cash outflow of about €235-million in mid-April.

The company said a process had been implemented to acquire the remaining shares from those shareholders who did not respond to the initial offer, which was expected to result in a further outflow of about €60-million in the second quarter.

Further, Mondi has maintained its investment grade credit ratings from Moody’s (Baa3 outlook positive) and Standard & Poor’s (BBB- outlook positive). The average maturity of the group’s committed debt facilities was 4.2 years compared with 4.3 years as at December 31, with unused committed borrowing facilities in excess of €750-million after taking the Mondi Swiecie acquisition into consideration.

“Overall performance for the first quarter of 2012 was in line with our expectations. 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 company assured.

The reviewed results for the half-year ending June 30 would be published on or around August 7.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Agriculture News
MOZAMBIQUE COURSE TRAINEES Some of the participants in the Appreciation of Welders for Engineers course at Tongaat Hulett-Acucareira de Moçambique
Agricultural and agroprocessing group Tongaat Hulett’s Mozambique-based sugar mill and sugar cane estates’ subsidiary Acucareira de Moçambique (Mafambisse) ran a nonprofit technical organisation the Southern African Institute of Welding (SAIW) training course for its...
Kenya's Mumias Sugar warned on Wednesday that projected losses for the year to June 2014 would be bigger than the previous year's pretax loss of 2.24-billion shillings ($25.3-million). "The company wishes to report that the projected loss for the year ended June 30,...
JSE-listed Pioneer Foods on Friday announced that it would now proceed with long-term plans to unbundle from its portfolio Quantum Foods and list it as separate entity on the JSE by October 6. Pioneer initiated the restructure of its portfolio a year ago and had...
Article contains comments
More
 
 
Latest News
DBSA CEO Patrick Dlamini
Following record disbursements of R12.7-billion in 2014, the State-owned Development Bank of Southern African (DBSA) reported on Monday that it planned to raise total yearly disbursements to R22-billion by 2017, with a major focus on under-resourced municipalities....
Through consolidating its operations into one central 59 000 m2 building, which was currently under construction near Freedom Park in Tshwane, Statistics South Africa (Stats SA) would streamline its processes and achieve greater efficiency, Minister in the Presidency...
Tanzania has signed an agreement with French oil producer Maurel et Prom and Wentworth Resources for the supply of gas aimed at doubling the country's power generation capacity to 3 000 MW by 2016. Oslo Stock Exchange and London AIM-listed Wentworth Resources said in...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
The board of UD Trucks Southern Africa (UDTSA) has announced the resignation of MD Jacques Carelse.   Long-time UD employee, corporate planning and marketing GM, Rory Schulz, has been appointed as acting MD while the process started to appoint a new MD. The Japanese...
There is a need to start planning another pumped storage scheme in South Africa. Much work has already been done at a site in the Limpopo province and the project was very close to being put out to tender at one stage. In 2008/9 the National Energy Regulator of South...
The Coega Development Corporation (CDC) is preparing to leverage its strategic coastal position to develop the Eastern Cape economy through proposed aquaculture development zones (ADZs), with a proposed R2-billion project aiming to contribute $278-million to the...
Completion of the ongoing construction of the 102 km Zomba–Jali–Phalombe–Chitakale road, in southern Malawi, has been extended from June  to December 15 because of persistent rains and difficulties in paying the contractor. The project is being undertaken by Kuwait's...
The Malawi government has awarded South African firm  Fischer Consortium the  contract to upgrade the Malawi Road Traffic Information System. The Directorate of Road Traffic and Safety Services at Malawi's Ministry of Transport and Public Works says Fischer...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks