File Photo: The Mondi paper factory in Merebank, Durban.

Johannesburg - The group said sales volume growth and higher prices were more than offset by higher costs, a significantly lower forestry fair value gain (down €28m year-on-year), the impact of maintenance shuts (up €20m year-on-year) and a higher depreciation and amortisation charge.

“Mondi delivered a robust performance in the first half of 2017, with revenue up 8 percent, underlying operating profit of €497m and a return on capital employed of 18.7 percent, reflecting management’s ongoing value focus and the strength of our business model,” Mondi chief executive Peter Oswald said. 
He said the integration of acquisitions completed during 2016 and early 2017 was on track. “These acquisitions enhance our geographic reach and product portfolio in corrugated packaging and consumer packaging,” he said.

The successful integration of acquisitions, includes Excelsior Technologies.  

In South Africa, the group’s underlying operating profit of €55m was down 44 percent on the first half of 2016, with a significantly lower fair value gain on its forestry assets (down €28m year-on-year), the negative impact of a stronger rand, higher input costs and inflationary cost pressures more than offsetting higher average selling prices and volume growth.

The board declared an interim dividend of 19.10 euro cents per share for the period and will be paid from distributable reserves.