Mondi rose more than 4percent on the JSE yesterday after the packaging and paper group flagged that its earnings would rise.African News Agency (ANA)
DURBAN - Mondi rose more than 4percent on the JSE yesterday after the packaging and paper group flagged that its earnings would rise on the back of lower net charges after tax during the six months to end June compared to the prior year.

Mondi said in a guidance to shareholders that underlying earnings before interest, tax, depreciation (Ebitda) we expected to be much higher than the 852million (R13.27billion) reported last year.

The group said that it started the year on a positive note, with its quarter results to end March reflecting a 16percent growth in underlying Ebitda to 471m, boosted by higher than average selling prices, contribution from acquisitions, expansionary capital expenditure projects completed in 2018 and lower planned maintenance shut-downs.

It said maintenance shut-downs declined to 15m in the first quarter compared to 35m reported during the corresponding period last year.

“Special item net charges after tax for the half year to end June are expected to be around 2m. In the prior year, the group recognised special item net charges after tax of 81m,” the group said. Two weeks ago Mondi stock rose on the go-ahead by the Competition Tribunal to merge Mondi plc and Mondi Ltd into a single entity to simplify its business structure.

The regulator set out conditions for the merger, that included an R8bn investment in Mondi’s local operations in the next 5 years, a guarantee that there would be no job losses for three years from the implementation date and at least one South African citizen must be appointed as a director on the Mondi plc board at all times. Yesterday Mondi advised that its basic underlying earnings per share, excluding the impact of special items, would increase between 4 and 11percent, to 0.93 and 0.99, up from last year’s 0.89.2.

Mondi Ltd shares closed 2.49percent higher at R314 on the JSE yesterday.

The group will release its results next month.

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