The Mayr-Melnhof Group has reached an agreement that International Paper Holding sp. zoo ("Kwidzyn") from International Paper for around EUR 670 million and to assume additional liabilities of around EUR 33 million from usufructuary rights and operating leases according to IFRS. The acquisition of Kwidzyn is part of MM's strategy to grow in the high-quality virgin fiber board (FBB) sector with innovative, sustainable and cost-effective qualities. The planned transaction will have an immediate impact on earnings. At the integrated pulp and paper site in Poland, Kwidzyn operates a pulp mill with a capacity of around 400,000 t pa and four connected cardboard/paper machines: the core is an FBB board machine with a capacity of 260,000 t pa.
• Sales and profit increase
• High capacity utilization in both divisions
• Significant improvement in results at MM Karton
• Margin of MM Packaging under cost pressure
The Mayr-Melnhof Group was able to exploit the sustained positive momentum on the European main markets in the first quarter of 2018. Both divisions still operated at good capacity utilization. The increasing operating profit of the Group followed the good level of the third and fourth quarter of the previous year, and was thus significantly above the comparative value of 2017, which was impacted by a sharp rise in recovered paper prices.
The cartonboard division benefited in particular from price increases. Higher material costs, especially for cartonboard and packaging, but also transport costs weigh on the margin of the packaging division. Accordingly, first priority here is to pass on the costs through higher selling prices.
The Group’s consolidated sales went up to EUR 592.1 million and were thus 1.3 % above the comparative figure of the previous year (1Q 2017: EUR 584.5 million). The slight increase results from both divisions.
Operating profit at EUR 57.1 million was 12.8 % or EUR 6.5 million above the previous year’s value (1Q 2017: EUR 50.6 million). A rise at the cartonboard division contrasted with a decline at the packaging division. The Group’s operating margin reached 9.6 %, following 8.7 % in the first three months of 2017.
Financial income amounted to EUR 0.3 million (1Q 2017: EUR 0.8 million), financial expenses to EUR -1.5 million (1Q 2017: EUR -1.4 million).
Profit before tax rose by 13.0 % to EUR 55.6 million (1Q 2017: EUR 49.2 million). Income tax expense totaled EUR 13.9 million (1Q 2017: EUR 12.3 million), resulting in an effective Group tax rate of 25.0 % (1Q 2017: 25.0 %).
Profit for the period went up accordingly by 13.0 % to EUR 41.7 million (1Q 2017: EUR 36.9 million).
more detail at: https://www.mayr-melnhof.com/en/press/press-releases/press-details/article/ergebnisse-zum-1-quartal-2018-1/