Mondi 'Well-Placed To Deliver Sustainably Into The Future' After A Strong Q3
Mondi has reported a strong performance in the third quarter of its financial year and said it was well-placed to deliver sustainably into the future.
In a trading update, the packaging firm posted an underlying EBITDA of €388 million for the quarter, up 27% compared to the same period last year.
Andrew King, chief executive officer, said, "Mondi delivered a strong performance in the third quarter with higher average prices across the business and strong volume growth year-on-year, against a backdrop of sharply higher input costs. Throughout this period of high demand, we remained focused on ensuring security of supply and high-quality service for our customers.
"Our growth is underpinned by our leading packaging portfolio and we continue to develop innovative and sustainable packaging solutions to help our customers achieve their environmental goals."
The company noted that the demand for corrugated packaging continued to be strong across all end-uses.
Corrugated solutions performed strongly, growing volumes significantly year-on-year, while making good progress in passing on higher input paper costs.
On the back of tight global markets, the packaging giant implemented price increases during the quarter across its portfolio of container board grades.
The company's flexible packaging unit delivered strong volume growth in consumer, building and construction, e-commerce, and specialised applications.
Engineered materials unit saw stable performance, backed by good volume growth in functional papers and films driven by a recovery in industrial and specialised applications, and strong demand for sustainable packaging materials.
Mondi's uncoated fine paper sales volumes increased year-on-year as clients valued the stability of a long-term supplier in key markets where the company operates.
Average uncoated fine paper prices were higher both year-on-year and sequentially, following price increases implemented during the year.
Input costs were significantly higher during the quarter, both year-on-year and sequentially. Mondi saw higher energy, resins, transport, and chemical costs compared with the second quarter of 2021.
Paper recycling costs were mostly stable, although they increased towards the end of the quarter, the company noted.
Energy costs in Europe increased through the period and rose sharply at the end of the quarter on the back of material increases in electricity and gas prices. Mondi expects these priced to remain at these elevated levels in the fourth quarter.
The impact of scheduled maintenance shuts on underlying EBITDA during the period was around €30 million.
The packaging group said that it is well-placed to deliver sustainably into the future, supported by its offering of sustainable packaging solutions, integrated cost-advantaged asset base, and culture of continuous improvement.
King added, "Our major capital investment projects are progressing well. With these investments we capture opportunities in our growing packaging markets, strengthen our cost competitiveness and deliver sustainability benefits. We also have expansionary projects underway at a number of our converting operations to grow with our customers, enhance our product and service offering, and improve efficiencies and converting costs.
"We are excited by the possibilities offered by our high-quality asset base, supported by strong structural growth trends in the markets we serve, including eCommerce and the demand for more sustainable packaging solutions, and we continue to evaluate further organic development opportunities in our packaging businesses."
Mondi is implementing price increases across the business to support the recovery of ongoing inflationary pressures amid strong demand.
It also cautioned that fourth quarter performance will be impacted by recent input cost increases alongside planned maintenance and project-related shutdowns.