This interim management statement provides an overview of the financial performance and financial position of the Group since the half-year ended 30 June 2015, based on management information up to 30 September 2015 and estimated results for October 2015. These results have not been audited or reviewed by Mondi’s external auditors.
Except as discussed in this interim management statement, there have been no significant events or transactions impacting either the financial performance or financial position of Mondi Group since 30 June 2015 up to the date of this statement.
Third quarter underlying operating profit of €221 million was 27% above the comparable prior year period (€174 million) with a good performance from all business units and strong incremental contributions from Packaging Paper, Uncoated Fine Paper and the South Africa Division. As anticipated, underlying operating profit was 13% lower than the second quarter, reflecting the impact of planned maintenance shuts in a number of key operations and the usual seasonal slowdown in demand in certain segments.
Selling prices in local currency terms for most of the Group’s key paper grades were generally stable to higher versus both the second quarter and the comparable prior year period. Like-for-like sales volumes were up on the comparable prior year period with the exception of kraft paper, which was impacted by softer demand in certain export markets and the closure of the Lohja plant in the first half.
Among the key input costs, wood, energy and chemical costs remained stable in local currency terms, while average benchmark European paper for recycling costs rose by 13% over the previous quarter. Polyethylene prices remain volatile, with the average price level higher than the prior quarter.
There was a mixed impact in the period from currencies to which the Group is exposed. The South Africa Division benefited from the weaker rand against both the US dollar and euro while the weakening of the Russian rouble during the third quarter had a net negative translation effect on the profits from the domestically focused uncoated fine paper business.
During the third quarter, a number of planned maintenance shuts took place at various containerboard, kraft paper and uncoated fine paper operations. In the fourth quarter, maintenance shuts are planned at the Group’s Swiecie and Steti mills. For the full year, based on prevailing selling prices, the impact of maintenance shuts on underlying profit is still expected to be around €90 million, of which the third quarter effect was around €35 million (€70 million year-to-date).