Cash-flush Mondi rallies on special dividend

print

Cash-flush Mondi rallies on special dividend

737 views


Published Date: 2018-03-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Cash-flush Mondi rallies on special dividend

The paper and packaging group says the payout reflects the strength of its financial position and its continued confidence in its ability to generate cash

Mondi has lifted its full-year dividend by 9% and is paying a special dividend following a recovery in earnings. It says the payout reflects the strength of its financial position and its continued confidence in its ability to generate cash.

The paper and packaging group says it benefited from good demand for its products last year and higher average selling prices in most of its businesses. While the economic recovery across Europe and other developed markets resulted in inflationary pressures, it said it managed to mitigate against these through operational efficiencies.

Revenue rose 7% to €7.1 billion in the year to December. Underlying operating profit increased by 4% to €1.02 billion and it reported an 8% improvement in underlying basic earnings per share to €1.495. It's raised its full-year dividend to €0.62 and has recommended a special dividend of €1.

Mondi spend over €400 million on acquisitions last year to expand its product offering. It's also revamping some of its operations to remain cost competitive, including the €335 million modernisation of its kraft paper facility at Steti in the Czech Republic and the upgrade of its Ruzomberok million in Slovakia. It says it's also making good progress on smaller expansionary capital expenditure projects at some of its packaging operations. These are expected to contribute to earnings from next year.

It's expects continued, but management pressure on its cost base, which it says is a consequence of the turn in the commodity cycle and the general economic recovery across the regions where it operates. Recent dollar weakness coupled with stronger emerging-market currencies, most notably the rand, are current headwinds.

Mondi Limited's shares jumped 6.5% to R318.17 on Friday, while Mondi Plc rose 5.9% to R317.50.



0 Comments


Similar Stories