Mondi raises prices as margins falter

Mondi’s preliminary results show that trading conditions failed to improve significantly over the latter half of 2023, with profitability undermined by faltering demand and lower prices. And although orders have picked up in the early part of 2024, selling prices remain under pressure. The sustainable packaging and paper group is implementing price rises to bolster margins, and input costs stabilized through the period under review, but the trading backdrop remains generally unfavorable.

Underlying cash profits fell by 35 per cent to €1.2bn (£1.03bn), albeit against an admittedly strong comparator in 2022. Both corrugated and flexible packaging saw profit reversals, as did uncoated fine paper. Narrowing segmental profits meant that the group’s return on capital employed came in at 12.8 per cent, against 23.7 per cent last time around. There were some green shoots; corrugated solutions saw “stable year-on-year financial performance despite 3 per cent lower box volumes”.