Mondi plc ups prices to cope with inflation, expects hit on profits

Mondi PLC (LSE:MNDI) said the fourth quarter will be impacted by recent input cost increases and it is raising prices to combat inflationary pressures, but added demand remains strong. 

The packaging maker said the fourth quarter will see extra charges of €70mln due to inflation and planned maintenance and a temporary shutdown of the Richards Bay plant in South Africa for renovations.

In a third-quarter update, the FTSE 250 firm said it had to pay more for energy, resins, transport and chemical costs. Paper for recycling costs were mostly stable, although they increased towards the end of the quarter.

Underlying earnings (EBITDA) for the third quarter climbed 27% to €388mln compared to last year.

Demand for Corrugated Packaging continued to be strong across all end-uses, while Flexible Packaging delivered strong volume growth in consumer, building and construction, eCommerce and specialised applications.

Engineered Materials’ performance in the quarter was stable and Uncoated Fine Paper sales volumes increased year on year.

An outlook statement said: “Demand remains strong and we are implementing price increases across the business that will support the recovery of ongoing inflationary pressures. While in the short term the fourth quarter will be impacted by recent input cost increases alongside planned maintenance and project-related shuts, the group remains well-placed to deliver sustainably into the future, supported by our leading offering of sustainable packaging solutions, integrated cost-advantaged asset base and culture of continuous improvement.”