Rebecca Hubbard
Posted: Tuesday, August 10, 2010 11:49 am

In the first half of the year that included the completion of its corrugated restructuring, price increases and cost reductions have boosted Mondi's pre-tax profit to a massive €177m.

A 16% sales increase was reported by the Anglo-South African paper and corrugated company in the six months to 30 June.

They also reported an improvement in pre-tax profit, with €177m, up from a €1m loss 12 months ago.
David Hathorn, chief executive, called the statistics a "pleasing result against a backdrop of improving market conditions".

Hathorn also said: "The outcome bears testament to our robust business model, which encompasses market leading positions in higher growth emerging markets, low-cost operations and a relentless focus on performance."

These statistics are proof of Mondi's restructuring and cost reduction programme, which involved the completion of the sale of its UK corrugated box plants to Smurfit Kappa in May. 

Mondi acquired Smurfit's consumer and industrial bag operations in Italy, Spain and France.

Mondi said that despite the restructuring supporting recovering profits, currency exchange has had mixed results.  South African margins were ground down by a strong rand, whilst European operations benefitted from a weaker euro against the dollar.

Hathorn concluded: "Despite cost pressures, the positive pricing momentum witnessed in Europe since the beginning of the fourth quarter of 2009 in most of the Group's key grades should see the business continue to deliver a strong performance in the second half of the year."