Johannesburg - Mondi, South Africa’s biggest packaging and paper company, said first-half earnings climbed as much as 44 percent after it took a lower charge related to reorganisation.

Basic earnings rose to between 46 euro cents and 51 cents a share in the six months through June from 35.3 cents a year earlier, the Johannesburg-based company said in a statement today.

A net charge of 16 million euros (R223 million) compared with a similar 68 million euros a year earlier, Mondi said.

Underlying operating profit, which excludes the impact of the charge, rose as much as 9.3 percent to 54 cents.

“This is a reassuring update,” Justin Jordan, a London-based analyst at Jefferies Group who recommends buying Mondi shares, said in a note today.

“Mondi is benefiting from its strategic capital investments with improving pricing outlook.”

Mondi is expanding in new markets to reduce its reliance on stagnant economies and gain from a shift to packaging products.

The shares rose 1.6 percent higher at 194 rand by 9:44 am in Johannesburg.

Mondi is up 8 percent this year.

Sappi, the world’s biggest producer of dissolving wood pulp and paper based in Johannesburg, rose 0.9 percent to 44.60 rand, bringing its 2014 gain to 36 percent. - Bloomberg News