Mondi Says Selling Prices May Improve In 2017 As Profit Rises
Mondi Ltd., a South African manufacturer of packaging for products from coffee beans to industrial chemicals, said third-quarter profit rose 3 percent and that prices of key products may improve next year.
Underlying operating profit rose to 227 million euros ($250 million) in the three months through September from 221 million euros a year earlier, the Johannesburg-based company said in a statement on Thursday.
“We expect to benefit from stable to higher selling prices in a number of key product segments as we move into 2017 following the downward pressure seen over the course of 2016,” Mondi said. “Costs remain generally stable, albeit with near-term pressure in certain areas.”
Mondi, which has its roots in printing paper and was spun out of Anglo American Plc in 2007, now gets the majority of its revenue from packaging products and is seeking to grow further in the industry. The company said on Monday that it agreed to buy a Russian tray-packaging maker for 2.78 billion rubles ($44 million).
The company revised the anticipated 2016 operating profit contribution from a capital investment program to 50 million euros from 60 million euros. Mondi is investing to expand and modernize some of its facilities, with as much as 450 million euros of spending planned for this year.
The shares declined 2 percent to 287 rand on Wednesday, valuing the company at 140 billion rand ($9.8 billion).
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