After a resilient first-half, the paper and packaging group, Mondi, has resumed dividends, recognising the importance to shareholders.
Mondi has resumed dividend payments after its business proved resilient over the first half of its financial year amid the challenges brought by Covid-19. On top of an interim dividend, it will also pay out last year’s final distribution, saying it recognises the importance of dividends to shareholders. Its shares rose as much as 7.6%.
In April, the paper and packaging group cut its capex budget for the year and withdrew it decision to pay a final dividend for 2019 due to the potential impact of the pandemic on its operations. However, it described its half-year performance as robust, despite starting the year with significantly lower average selling prices across its key pulp and paper grades.
Revenue fell 8.4% to €3.45 billion for the six months to end-June and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 17% to €738 million. Basic underlying earnings per share came in 24% lower at 73 euro cents. It has reduced its interim dividend by 30% to 19c and is also paying out last year’s final dividend of 29.75c per share after reducing net debt by 14% to €2.04 billion.
Mondi said conditions remained uncertain for the remainder of its financial year, with pricing across its key pulp and paper grades below or in line with the average of the first half. It had rescheduled planned mill maintenance shuts which it said would have an impact on its second-half performance.
Demand for packaging daily essentials remains robust while we continue to see weakness in certain industrial end-uses,” CEO Andrew King said. “Uncoated fine paper order books have picked up from the lows seen in the second quarter, albeit we do not expect a near-term recovery to pre-pandemic levels.”
Its shares retraced some of their gains to close 5.8% higher at R338.50 yesterday.
Main Image; Web Packaging
