Mondi Group announces that underlying operating profit for the third quarter ended 30 September 2012 was EUR 135 million (year-to-date EUR 405 million, 2011 EUR 490 million) in line with that of the comparable prior year period (Q3 2011 EUR 136 million) and below that of the prior quarter (Q2 2012 EUR 150 million). This was in line with expectations and reflects a stable trading environment considering the impact of the traditionally weaker European summer months, annual maintenance shuts at a number of the Group's larger operating sites during the quarter and ongoing strong cost containment.
Sales volumes were, on average, similar to those achieved in the previous quarter but above those of the comparable prior year period, although demand in the downstream converting operations was below that of the prior year.
Third quarter average benchmark selling prices across all grades were below those of the comparable prior year period. Selling price increases were realised in kraft paper during the quarter and price increases for containerboard are effective from early in the fourth quarter of 2012.
On average, input costs in the third quarter were similar to the previous quarter and below that of the comparable prior year period. Benchmark recovered fibre costs decreased by 23% in the quarter and were 30% below the comparable prior year period. As a result of the anticipated start-up of new recycled containerboard capacity in Poland in early 2013, regional market pressure on recovered fibre costs is expected in the near term.
The weaker South African rand and stronger US dollar versus the euro benefited mainly the South Africa division and, to a lesser extent, the Packaging Paper business.
During the quarter, all conditions precedent for the acquisition of Nordenia International AG were met and, with effect from 1 October 2012, the Group acquired a 99.93% interest in Nordenia for a cash consideration of EUR 259 million.
As part of its continuing focus on its core businesses, the Group concluded the sale of its 50% share in Aylesford Newsprint to The Martland Holdings on 2 October 2012. The shares were sold for a nominal consideration following recapitalisation of the business. The net cash flow effect of the transaction was a EUR 17 million outflow, while the estimated loss on disposal was EUR 71 million. Following the sale of Aylesford Newsprint, the Group has restructured its reporting in South Africa to combine the Mondi Shanduka Newsprint joint venture into the South Africa division.
