Mondi mends pricing

Excluding £67m of asset write-downs following plant closures and restructuring, operating profit jumped 22 per cent to €699m. Higher prices and better volumes at the packaging paper business - where profit rose almost a third to €298m - were instrumental. Chief executive David Hathorn admits the story has been more one of supply constraint than demand growth, and says "a bit of competitor action" depressed prices late last year. Yet pricing is firming up again: Mondi is currently negotiating price increases for so-called kraftliner packaging paper from April. That, says broker Jefferies, raises the possibility of earnings upgrades later this year. It currently expects adjusted pre-tax profit of €634m this year and adjusted EPS of 101¢ (from €586m and 95¢ in 2013).

And being a net exporter from emerging markets, where currencies have weakened versus the euro, should deliver a significant currency tailwind in 2014. The rand's slump certainly flattered the South African business last year.