Photo: Simphiwe Mbokazi/African News Agency (ANA).

JOHANNESBURG - International packaging and paper group Mondi on Friday reported profit before tax of EUR490 million (R7.6 billion) for the six months ended June 30, up six percent from the same period last year.

Mondi, which has its origins in South Africa and is listed in Johannesburg and London, said underlying earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17 percent to EUR852 million, while basic underlying earnings were up 26 percent to 89.2 euro cents per share.

"Mondi delivered a strong performance in the first half of 2018.We benefited from good demand across our packaging businesses as well as higher average selling prices, while emaining focused on initiatives to drive performance and mitigate inflationary pressures on our cost base," group chief executive officer Peter Oswald said.

"We continue to make good progress in securing future growth and ensuring the ongoing cost competitiveness of our operations through the delivery of our major capital expenditure programme of over EUR750 million, which is expected to contribute to earnings from 2019.

Mondi said the modernisation of its kraft paper facility in Steti in the Czech Republic was on track to start up in late 2018 and work to upgrade the pulp mill at its Ruzomberok mill in Slovakia had commenced.

The trading environment remains positive going into the second half of the year, with pricing in key fibre based product segments remaining supportive.

"The second half of the year will be impacted by the usual seasonal downturn in uncoated fine paper. We also expect continued pressure on the cost base across the group, mitigated by our ongoing proactive and comprehensive cost reduction programmes," it added.

- African News Agency (ANA)