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Mondi's valuation depends on 'pass-through' ability

Mondi's valuation depends on 'pass-through' ability

Mondi’s (MNDI) shares slumped after the paper and packaging group revealed that underlying performance for the financial year would be "modestly" below market expectations. The group was assailed on several fronts during the third quarter, with fixed costs bubbling up due to maintenance shutdowns and rising costs for wood, energy and chemicals, while benchmark paper for recycling prices were up 15 per cent compared to the third quarter of 2016. This was compounded by negative currency effects on the back of a depreciating greenback, Turkish lira and Russian rouble. It’s difficult to imagine a hedging strategy that would have mitigated that brew.

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