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Mondi PLC on Thursday reported a strong annual performance, but the company's shares were lower as investors fret over sanctions aimed at Russia, where it has a number of operations.
The Weybridge, England-based paper and packaging firm's 2021 pretax profit rose 28% to €773 million from €602 million.
Revenue increased 16% to €7.72 billion from €6.66 billion.
‘We grew our packaging businesses and saw a recovery in uncoated fine paper markets. Our vertical integration, the agility of our operations and collaboration with our customers ensured we met surging demand at a time when supply chains were under pressure around the world. We implemented price increases across all our businesses and, against a backdrop of rising commodity input costs, we exhibited good cost control,’ Chief Executive Andrew King said.
Mondi increased its final dividend to 45.00 euro cents per share from 41.0 cents, bolstering the year's total payout to 65.00 cents. This was 8.3% higher from 2020's 60.0 cents.
Mondi shares fell 3.4% to R 306.07 each in Johannesburg on Thursday, and were down 1.8% to 1,492.00 pence each in London.
The stock has taken a beating recently as investors fear the effects of sanctions on Russia, where the company has various operations, of which represented around 12% of the company's 2021 revenue.
Mondi shares are down 19% year-to-date in London and are 22% lower in Johannesburg, with most value lost over the past week following Russia's invasion of Ukraine.
‘Our businesses primarily serve the domestic market and have continued to operate through this time of heightened geopolitical tension. We are actively monitoring this rapidly evolving situation, the international response and the implications for the group,’ Mondi said.
Looking forward, King said: ‘We expect to make progress in the year. There are significant geopolitical and macro-economic uncertainties and we anticipate continued inflationary pressures on our cost base. However, we also expect to realise the full benefit of the price increases implemented in 2021 and early 2022, shorter planned maintenance shuts and the contribution from our capital investment programme.’
Mondi's capital investment programme currently includes around €1 billion of expansionary projects already approved or under advanced evaluation.
Mondi expects this will generate mid-teen returns when in full operation.
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