Mondi plc, a global leader in sustainable packaging and paper production, has provided a trading update for the third quarter of 2023. The company faced challenging market conditions due to the weak macro-economic environment, resulting in soft market demand. However, lower input costs and tight fixed cost control helped mitigate the impact of lower average selling prices. The underlying EBITDA for the quarter was £261 million, lower than the previous quarter.
In the Corrugated Packaging segment, containerboard prices remained stable, and order books improved. The Flexible Packaging segment experienced further price and volume declines in kraft paper, which is traditionally a later cycle product. However, the converting network delivered a resilient performance. Uncoated Fine Paper pricing continued to decline in Europe, while Southern Africa markets remained stable. The forestry fair value gain, accounted for within uncoated fine paper, was significantly lower in Q3 2023 compared to the previous quarter.
Andrew King, CEO of Mondi, stated that demand remained subdued in the third quarter, with stable pricing in containerboard but continued price declines in kraft paper. He expects this trend to continue in the final quarter of the year, along with stabilizing input costs and a greater impact from maintenance and project-related shutdowns. However, Mondi's low-cost asset base, broad product offering, and fully integrated business model provide resilience in the current environment and position the company well for future market improvements.
Mondi's expansionary capital projects pipeline, worth £1.2 billion, remains on track and within budget. The company remains confident in the structural growth of the packaging markets it serves, driven by the increasing demand for sustainable packaging solutions. Mondi continues to invest in the future growth of the company.
In terms of financial performance, the underlying EBITDA for the first three quarters of 2023 was £941 million. The forestry fair value gain for the nine months ended September 30, 2023, was £100 million.
Mondi is a global leader in packaging and paper, with a focus on sustainability. The company's strategy is centered around circular-driven solutions and taking action on climate change. In 2022, Mondi had revenues of £8.9 billion and employed 22,000 people worldwide. The company is listed on the London Stock Exchange and the JSE Limited.