“We remain confident of making progress for the year and expect a strong final quarter, supported by generally higher average selling prices and good growth; however, …”
() was comfortably the worst performing blue-chip on Wednesday morning after the paper & packaging company issued a mild profit warning.
The shares were off 8.3% at 1,915p as the company complained that continuing cost pressures and negative currency impacts would likely result in the underlying performance in the current financial year being “modestly below market expectations”.
Currency effect
A weaker US dollar and a sharply weaker Turkish lira were the big culprits on the unhelpful currency movements front.
Underlying operating profit for the third quarter of 2017 of €245mln was 8% above the comparable prior year period’s return of €227mln.
Mondi benefited from higher average selling prices partly offset by higher costs and negative currency effects.
Underlying operating profit was in line with the second quarter of 2017, the group added.
“The shares have reacted swiftly to that news, falling 8% in early trading, although investors have seen a 60% gain since 2015,”noted Ian Forrest at the Share Centre.
“Demand for consumer packaging continues to increase around the world, on the back of online shopping and changing social trends. The company also has a wide geographic spread and product diversification, along with an ongoing efficiency programme which are also positives for investors,” he added.
Following today’s news, The Share Centre has decided to put its current ‘buy’ recommendation under review.”
Read More: Mondi PLC warns on profits as currency fluctuations and rising costs