Shares in packaging and paper specialist Mondi (MNDI) have performed strongly in recent weeks despite wider market volatility, further solidifying the stock's defensive reputation. City analysts described the group's half-year financial performance as "solid" - the dip in revenue was largely down to foreign-exchange movements and disposals made in 2015 - although the second half of the year will reflect a couple of challenges.
These include planned maintenance closures at a number of the group's paper mills, the usual seasonal downturn at the uncoated fine paper business during the third quarter and a lower than expected fair value gain from the group's own forestry assets. Forestry gains are largely dependent on the export price of timber, a significant increase in which allowed for a €48m (£41m) boost in the first half, a level not expected to recur in the second.
Overall, chief executive David Hathorn said he expected the group to benefit from stable input costs, as well as "incremental" contributions from capital investments. These include the installation of a biofuel boiler at its containerboard mill in Świecie, Poland. In 2016, capital projects are expected to add €60m to operating profit.
Analysts at Deutsche Bank expect pre-tax profit of €877m for the year ending December 2016, giving EPS of 136¢, compared with €853m and 133¢ in 2015.
| MONDI (MNDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,549p | MARKET VALUE: | £7.52bn | |
| TOUCH: | 1,548-1,549p | 12-MONTH HIGH: | 1,614p | LOW: 1,108p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 634¢* | NET DEBT: | 44% | |
| Half-year to 30 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 3.46 | 392 | 60.3 | 14.4 |
| 2016 | 3.31 | 482 | 75.0 | 18.8 |
| % change | -4 | +23 | +24 | +31 |
Ex-div: 18 Aug Payment: 13 Sep *Includes intangible assets of €692m, or 143¢ a share £1=€1.18 | ||||
