Packaging giant Mondi (MNDI) turned things around in the second half and finished the year with a flourish. That momentum has carried over into 2013 and the two big acquisitions made since the summer - Nordenia and Duropack's German and Czech corrugated packaging operations - are fitting in so well they're now expected to generate annual savings of €30m within two years. That's a third more than first thought and grounds for earnings upgrades.
Given Mondi flagged these numbers just a few weeks ago, there were few surprises. Underlying EPS had slumped over a quarter in the first half, but finished the year down just 3 per cent at 69.6¢. A similar drop in adjusted cash profit to €923m was better than analysts expected, too. Weaker containerboard pricing tore 18 per cent off packaging paper profits to €321m, yet lower costs lifted profits at the fibre packaging division by 13 per cent to €168m as both pricing and volumes for corrugated packaging remained stable. Boosted by the Nordenia acquisition, Mondi made €45m from consumer packaging, and a €300m profit from uncoated fine paper was much better than forecast.
Broker Jefferies increases adjusted EPS forecasts for 2013 by 10 per cent to 85¢.
| MONDI (MNDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 838p | MARKET VALUE: | £4.06bn | |
| TOUCH: | 837.5-838p | 12-MONTH HIGH: | 855p | LOW: 494p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 609p* | NET DEBT: | 65% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 6.35 | -103 | -41.6 | 12.7 |
| 2009 | 5.26 | 49 | -6.5 | 9.50 |
| 2010 | 5.61 | 333 | 37.8 | 20.0 |
| 2011 | 5.74 | 457 | 57.5 | 26.0 |
| 2012 | 5.81 | 371 | 50.5 | 28.0 |
| % change | +1 | -19 | -12 | +8 |
Ex-div: 17 Apr Payment: 16 May *Includes intangible assets of €695m, or 165p a share £1=€1.15 | ||||
