LONDON (Alliance News) - Mondi PLC said Thursday that underlying operating profit rose as expected in its first-half, supported by a strong performance in Packaging Paper, Fibre Packaging and its South Africa Division, as it increased its dividend by 39% and benefited from a reduced special charge on restructuring activities during the period.
The FTSE 100-listed company said first-half underlying operating profit rose 3% to EUR377 million from EUR366 million in the comparable period last year.
Pretax profit also came in higher at EUR312 million compared to EUR229 million for the first-half in 2013 and EUR270 million in the second-half. Revenue for the half-year was marginally lower at EUER3.15 billion, down from EUR3.34 billion in the first-half of last year but up from EUR3.13 billion in the second-half.
Mondi increased its interim dividend for the period by 39% to 13.23 euro cents per share, up on the 9.55 euro cents paid last year. Basic earnings per share also came in higher, as expected by the packaging company, at 48.6 euro cents per share compared to the 35.3 euro cents paid in the comparable period last year.
While meeting expectations, Mondi said that the 3% rise in underlying operating profit on last year - up 13% on the second-half - buoyed by its Packaging Paper, Fibre Packaging and its South Africa division, was offset in part by weaker results from Uncoated Fine Paper and Consumer Packaging.
Last week the international packaging and paper company said that it expected underlying operating profit for the period to come in higher than recorded in the comparative period last year as a net special item charge would be reduced in the half-year due to restructuring activities.
The net special item for the first-half was EUR16 million before tax, attributable to restructuring in Mondi's Coating business and a EUR13 million net charge on early redemption of the EUR280 million Eurobond, partly offset by the release of a previously recognised provision for transaction costs, said the company.
In the six months to June 30, 2013, the group recognised a net special item charge after tax of EUR68 million. Last week the business said the net special item charge for the six months ended June 30, 2014 was set to be approximately EUR16 million.
"Strong cost management and contributions from successfully completed strategic capital investments, together with the benefits from downstream integration in key packaging segments, enabled the Group to offset the impact of lower prices in a number of paper grades," said Chief Executive David Hathorn.
The company said that anticipated price increases in some of its packaging paper grades should provide positive momentum in the near term, though noted that its second-half, as in prior years, will be impacted by planned annual mill maintenance shuts.
Hathorn remains confident for Mondi's future, "Market fundamentals remain sound, which, coupled with a continued economic recovery, should prove positive for further growth in the packaging businesses. Overall, we remain confident that Mondi will continue to deliver an industry leading performance."
Mondi shares were trading 0.59% higher at 1,023.00 pence per share shortly after the market open Thursday.