Mondi is experiencing increased energy, raw material and logistics costs across its business, and while it has taken pricing action, the effects are likely only to be fully felt in the third quarter of this year.
The packaging and paper group said on Friday that heightened geopolitical tensions in the Middle East have further increased volatility in an already complex operating environment.
It added that the group has limited direct exposure to the region and all its operations continue to run safely.
“Against a backdrop of challenging market conditions, sales volumes increased, though lower selling prices and, latterly, cost pressures linked to escalating geopolitical tensions weighed on underlying ebitda [earnings before interest, taxes, depreciation and amortisation],” said CEO Andrew King.
He added that these pressures persisted into the second quarter and the group is taking pricing actions to mitigate their impact.
“While there is an inherent time lag we expect these measures to take full effect in the third quarter,” said King.
We continue to take targeted actions to strengthen our competitive advantage. Operational excellence programmes, rigorous cost control and margin management remain central to our approach
— Mondi
The group said in a trading update for the quarter ended March that market conditions remained challenging.
It reported underlying earnings before ebitda of €212m, including €8m of forestry fair value gain for the first quarter. In the corresponding quarter of 2025, ebitda was €290m, including €2m of forestry fair value gain.
In the fourth quarter of 2025, ebitda was €214m, including €1m of forestry fair value gain.
The Corrugated Packaging and Flexible Packaging business units increased sales volumes across their range of paper grades. This was supported by recent capacity expansions and the group’s exposure to diversified geographies, end markets and products, it said.
There were also no planned maintenance shutdowns in the quarter.
The increase in volumes was offset by lower average selling prices and, towards the end of the quarter, higher energy-related input costs.
The performance of Mondi’s Corrugated Solutions and Paper Bags businesses was affected by margin pressure, while Consumer Flexibles delivered a broadly stable performance, supported by resilient end-markets, it added.
Despite the uncertain outlook, we continue to focus on what we can control: driving operational excellence, rigorous cost and margin discipline, optimising our production footprint and focused cashflow management
— Andrew King, Mondi CEO
After a recent reduction in wood prices in South Africa, and assuming the market environment does not change significantly for the rest of the year, the full-year forestry fair value gain for 2026 is expected to be nil, it said.
“We continue to take targeted actions to strengthen our competitive advantage. Operational excellence programmes, rigorous cost control and margin management remain central to our approach,” it said.
In April the group announced the closure of a further three converting plants, comprising a Consumer Flexibles plant in Hungary and Corrugated Solutions plants in Poland and Germany. The closures will reduce headcount by 450 this year.
This brings the total number of recently announced plant closures to six, with customers transferring to alternative plants in the group’s network.
Cash flow optimisation remains a priority, supported by disciplined control of capital expenditure and rigorous working capital management.
“Despite the uncertain outlook, we continue to focus on what we can control: driving operational excellence, rigorous cost and margin discipline, optimising our production footprint and focused cash flow management,“ King said.
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