Johannesburg - South African papermaker Mondi [JSE:MND] on
Thursday posted a drop in first-quarter underlying operating profit due to
lower prices and volumes, but said demand for its products was picking up.
Mondi, also listed in London, said first-quarter underlying
operating profit fell to €120m ($157.82m), compared with €179m in the same
period last year.
"During the first quarter we have seen the price
momentum starting to build," said chief executive David Hathorn, adding
volumes and prices seemed to have bottomed out.
"All plants are up and running, so the second quarter
should have better volumes than the first quarter, and from a pricing point of
view we have a positive price momentum with a variety of price increases going
through," he said.
For 2012, costs were not expected to rise dramatically above
inflation, except for pulp and waste paper prices which have risen sharply,
The global paper industry has slowly been recovering from a
slump triggered by weak demand and overcapacity.
Mondi, with operations across 28 countries, has been
targeting fast-growing markets in Eastern Europe and is seen as a safer bet
than some of its Western European rivals, which battle with high-cost assets.
Hathorn said there were no plans to shut mills or cut
capacity at this time, adding Mondi was reviewing a number of acquisition
Mondi is concluding an acquisition of shares in its Polish
unit Mondi Swiecie it does not yet own, and Hathorn said delisting of the unit
should be concluded within a month.
Shares in the company, which are up 25% so far this year,
were down 0.86% at R70.52 by 07:39 GMT compared with a flat JSE Top 40 -
(Tradeable) [JSE:J200] index of blue-chip companies.