Mondi PLC (LSE:MNDI) shares jumped 12.1% to 884.8p as investors looked beyond a sharp fall in first-half earnings and a dividend cut to improving trading momentum and further action on costs.
The packaging and paper group said revenue increased to €4 billion from €3.9 billion, helped by higher sales volumes and price increases.
Underlying earnings before interest, tax, depreciation and amortisation fell 33% to €379 million. The margin narrowed to 9.5% from 14.4% as higher energy, wood and other input costs combined with lower average selling prices.
Underlying pre-tax profit dropped to €80 million from €272 million, while underlying earnings per share fell to 11.6 euro cents from 42.7 euro cents.
Mondi recorded a statutory pre-tax loss of €240 million after taking €320 million of impairment and restructuring charges. Only €24 million of these charges is expected to involve a cash outflow.
Chief executive Andrew King said: "Trading momentum improved through the first half and we enter the second half with higher packaging paper prices, supported by good order books."
The company has closed or is closing six plants as part of its network optimisation programme. It also reduced its forecast for capital expenditure in the 2026 financial year to around €500 million from €550 million.
Cash generated from operations declined to €347 million from €416 million. Net debt increased to 3.2 times underlying earnings from 2.5 times a year earlier.
Mondi cut its interim dividend to 9.4 euro cents a share from 23.3 euro cents.
