Mondi flops on profit warning
The FTSE 100 firm said its underlying performance for the year will come in “modestly below market expectations”.
Shares in Mondi dived on Wednesday after the paper and packaging group issued a profit warning amid rising cost pressures.
The FTSE 100 firm said its underlying performance for the year will come in “modestly below market expectations”, even as it clocked an 8% rise in third-quarter operating profit to 245 million euros (£219 million).
“We remain confident of making progress for the year and expect a strong final quarter, supported by generally higher average selling prices and good growth.
“However, continuing cost pressures and negative currency impacts are expected to result in an underlying performance for the year modestly below market expectations,” the firm said.
Mondi pointed to a weaker US dollar and a “sharply weaker Turkish lira”, as well as a 15% jump in the cost of wood, energy and chemicals.
Shares slumped more than 6% in morning trading to 1,916p.
The group also booked a 30 million euro charge in the third quarter linked to mill closures, with the full-year impact forecast to come in at 90 million euros.
AJ Bell investment director Russ Mould said: “Packaging and paper group Mondi was the biggest blue-chip faller after warning that its full-year results would be modestly below forecasts.
“Like-for-like sales are up and average selling prices are generally higher but the group is beset by continuing cost pressures and currency losses.”