Mondi Share Discussion Threads

[leeson31] 14/11/2007 08:28

November 2007Mondi Limited(Incorporated in the Republic of South Africa)(Registration number: 1967/013038/06)JSE share code: MND ISIN: ZAE000097051Mondi plc(Incorporated in England and Wales)(Registration number: 6209386)JSE share code: MNP ISIN: GB00B1CRLC47As part of the dual listed company structure, Mondi Limited and Mondi plc
(together 'Mondi Group') notify both the JSE Limited and the London Stock
Exchange of matters required to be disclosed under the JSE listings
requirements and/or the Disclosure and Transparency and Listing Rules of the
United Kingdom Listing Authority.
Mondi Group: Interim Management StatementThis statement provides an update on the Group's progress since the half year,
based on trading up to 14th November and precedes the announcement on 28th
February 2008 of full year results for the year ending 31st December 2007.
Group OverviewThe positive trends and trading momentum of the first half have continued into
the second half particularly in Mondi Packaging and price increases have been
achieved in Mondi Business Paper in line with expectations.
Divisional OverviewMondi PackagingMondi Packaging has continued to benefit from an improved trading environment.Packaging paper volumes and prices have continued to increase and trade above
prior year in all major paper grades. As expected, while paper prices have
continued to increase, there are signs that prices are now leveling off, albeit
at good levels. The paper supply demand balance remains favourable with ongoing
growth in demand (particularly in emerging markets) and only limited new
capacity expected until 2009. Although price increases in downstream converting
have kept pace with input cost pressures (mainly paper), we continue to seek
further price increases.
Mondi Business PaperSales volumes in the second half are likely to be lower than the comparable
period as Mondi took additional downtime due to softness in order intake over
the summer period (as a result of de-stocking across the distribution channels)
resulting in a production reduction of circa 75,000 tonnes versus 35,000 tonnes
as previously indicated. However, order intake has now picked up and selling
prices have continued to rise with an October price increase of circa 3-4%
realised. Following the recent capacity closures in the industry, the supply
demand balance in Europe continues to improve with reasonable demand growth
(particularly in emerging markets) and no significant new capacity is expected
until 2009/10. The headbox of the PM31 paper machine (located at Merebank,
South Africa) was successfully modified. The recent forest fires in South
Africa, the worst in recent history, saw around 13,000 hectares of Mondi forest
affected for which the likely cost to the group is expected to be circa Euro5m.
Mondi Packaging South Africa (MPSA)The second half is the seasonally stronger period for MPSA and this, coupled
with the consolidation of the Lenco acquisition from 4th July 2007 should see
results in the second half in local currency well up on the first half.
Merchant and NewsprintAt Europapier, the favourable demand and pricing environment in the first half
have continued into the second half. At Aylesford Newsprint results have
benefited from lower input costs and at Shanduka Newsprint volumes and pricing
remain firm.
Input Costs and CurrencyFollowing the sharp increase in external fibre costs (wood, pulp and recycled
fibre) in the first half, fibre costs are now more stable. However, given
Mondi's Russian and South African wood resources, we are better able to
mitigate the impact of wood cost inflation on the Group.
The continued weakness of the US dollar has led to an increase in imports and a
reduction in exports for most paper grades. However the lower net export
dependency of UCWF and Containerboard (circa 5% versus 20% for most coated and
graphic paper grades) will limit the impact of the weak dollar.
Importantly, our results continue to benefit from Mondi's ongoing focus on cost
reductions, productivity improvements and our emerging market focus which
provides higher growth at a competitive cost. As at 30th June 2007 circa 61% of
Mondi's asset base was in emerging markets.
RestructuringIn line with Mondi's continued programme of reviewing and rationalizing its
operating base, Mondi Packaging will book a circa Euro25m restructuring charge (of
which Euro20m will be a cash cost) in the second half (to be taken against
underlying operating profits) which will see 6 converting plants in Western
Europe closed or downsized and around 350 jobs cut. The payback on the
restructuring charge should be within two years.
On 18th October 2007 Mondi announced an organisational change, the effect of
which will be improved effectiveness and efficiency by eliminating duplication
across the Group. The main change with effect from 1st January 2008, will be to
replace the current Mondi Packaging and Mondi Business Paper Business Units
with a Europe and International Division and a South African Division. The
costs of this restructuring, which will see a reduction in overhead costs, have
not yet been finalised but are not expected to be significant in 2007, with
further costs in 2008 being offset by reduced overheads in the same year.
Major ProjectsGood progress continues to be made on the new 470,000 tonne recycled
containerboard machine and related Box plant (likely to be located at Swiecie
in Poland) at a total estimated cost of Euro350m. The main machine orders have now
been placed and we remain on track for completion in the second half of 2009.We anticipate this machine will have the lowest operating cost of its type.
The project to modernise our Russian mill at an estimated cost of Euro525m is also
making good progress and remains on schedule for completion during 2010. Key
value drivers of this project are to lower our cost base in Russia, improve
efficiency, increase energy production and revenue by selling surplus energy to
the grid as well as providing some extra capacity (both pulp and paper) for the
strongly growing domestic market.
These projects will further strengthen Mondi's exposure to emerging markets and
will be financed from internal cash generation. Both provide exciting growth
prospects for the group.
AcquisitionsA key part of Mondi's strategy is to grow by acquisition. To this end, several
acquisitions have been completed this year, Lenco, Unterland and Tire Kutsan
(which resulted in Mondi becoming the leading corrugated player in emerging
Europe).
The impact of recent acquisitions in the second half is likely to be marginally
earnings dilutive (post tax) as the initial profit contribution is more than
offset by the related finance charges. We anticipate that these businesses will
be earning accretive in 2008 as they are integrated into Mondi and deliver on
their potential.
Borrowings and Finance ChargesGroup borrowings, as expected, will increase in the second half as the rate of
capital expenditure picks up (several capital projects were completed during
scheduled summer maintenance shuts at the major paper mills) and the Group has
completed several acquisitions (primarily Tire Kutsan, Unterland and Lenco)
with a combined debt free enterprise value of Euro364m.
Interest rates have also risen, particularly in South Africa where the Reserve
Bank bench mark repurchase base rate has increased by 150 basis points from
9.0% in May to 10.5% currently.
The net result of higher borrowings and interest rates is that finance charges
in the second half will be significantly up on the first half.
SummaryMondi's performance continues to improve reflecting our favourable product mix,
emerging market exposure and competitive cost position. Overall, despite
booking a circa Euro25m second half restructuring charge, Mondi anticipates good
progress for the year as a whole with earnings in line with management
expectations.Contact details:Mondi Group
David Hathorn [phone]
Paul Hollingworth 01932 826 326

Financial Dynamics
Richard Mountain

[leeson31] 13/11/2007 20:32

will keep an out for statement update tmrw Enami...

[enami] 13/11/2007 19:00

Hmmm yes, the lowest EOD close since the demerger from AAL, Interim Management Statement tomorrow Wednesday 14 Nov.

I sold All my meagre few in September, maybe worth a punt if the Statement is positive.

[ibrox] 12/11/2007 08:10

Buy rec in Chronic Investor this week.

[enami] 02/8/2007 11:43

Looking good, 6.63% up today.
Directors buying yesterday.

[enami] 02/8/2007 08:03

So good results yesterday and climbing off the bottom now.

[enami] 30/7/2007 07:27

Results on Wednesday, Deutsche Bank started coverage with a 'hold' rating and 480p price target.

[enami] 19/7/2007 09:28

Hmmm - pretty volatile yesterday and the daily volume steadily falling suggests the bottom may have been found. share price finished up for the day.

Half year results announcement due 1st August.

[zulu001] 11/7/2007 07:55

Goldman Sachs 'Neutral', target 535p.

[enami] 09/7/2007 15:37

Mondi's first positive day, up 6% to finish at the high of the day.

Still have not got my shares credited to my Etrade account – very annoying.

[zulu001] 04/7/2007 07:47

Shares in Mondi dropped 10p to 490p on its first day of trading in London as tracker funds were forced to sell their holdings as Mondi's capitalisation of £1.8bn meant it was not large enough to stay in the FTSE100.

Credit Suisse put a 515p price target on the stock and said the outlook for its containerboard, Kraft paper and uncoated fine paper businesses looked favourable.

[zulu001] 04/7/2007 07:42

03/07/07 Credit Suisse target 515p
11/07/07 Goldman Sachs target 535p.

[enami] 04/7/2007 07:22

Hi Orient - will put an hourly chart in later.
Etrade have not managed to include the Mondi shares in my portfolio yet so I could not sell yesterday. Decided to hang on to them for a while to see where they go after the results.

[0rient] 04/7/2007 07:16

Nice one Enami...any charts available yet??

[enami] 04/7/2007 07:14

78 million shares traded over 2 days is 20% of the shares in issue. Fund managers selling out I guess.

Half Year Results Announcement due 1 August.

[enami] 04/7/2007 07:05

Paper and packaging group Mondi was spun-off from miner Anglo American in July 2007. The group has two primary businesses - Packaging and Business Paper. Its Business paper division produces office paper while the Packaging arm creates and distributes packaging products, such as bags, to various industries.
The South African listing (Mondi Limited) was was cancelled and shares exchanged for Mondi PLC shares at the end of July 2019.
Disposal of Russian assets including special dividend and share consolidation completed Feruary 2024


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Final Dividend in pence per ordinary share will be 40.25848. Paid on Tuesday 14 May 2024.
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