File Photo: The Mondi paper factory in Merebank, Durban.
DURBAN - Paper and packaging group Mondi announced a special payout of 100 euro cents per share after full-year underlying profit rose 4 percent, benefiting from solid demand and higher average selling prices in most of its businesses.

Mondi has been battling negative currency effects from a stronger South African rand and a weaker U.S. dollar while also facing increasing pricing pressures because of higher raw materials costs.

This prompted a profit warning in October, but the company said on Friday that operational performance improvements had countered inflationary pressures in its cost base.

Mondi said there had been“strong upward momentum” in pricing across the main product in its packaging-paper and fibre-packaging business over the course of 2017 and into early 2018, with CEO Peter Oswald describing the group’s outlook as“positive”.

“We remain confident that our consistent and focused strategy, robust business model centred around our cost-advantaged assets and firm focus on driving performance will sustain our track record of delivering value-accretive growth,” he said in a statement.

Shares in the group, which is listed in London and Johannesburg, were up 2 percent at 18.79 pounds in early London trade.

Mondi said that more than 750 million euros of approved capital expenditure projects were under way, pointing towards a strong growth pipeline.

The company also recommended a full-year ordinary dividend of 62 euro cents per share, up 9 percent on a year ago.