Dual-listed Mondi increased its underlying operating profit by 13% year-on-year and 14% quarter-on-quarter to €183-million during the three months ended March 31 the company announced on Wednesday, stating that this performance was in line with management expectations.

Sales volumes during the quarter were broadly in line with that of the prior corresponding period and above that of the previous quarter, mainly as a result of scheduled maintenance shutdowns in the second half of last year.

Mondi further said, as expected, average selling prices in Europe for all key paper grades were lower than those of the prior corresponding period and the fourth quarter of last year, with the exception of recycled containerboard.

“The corrugated packaging business benefited from further pass through of prior period recycled containerboard price increases, while pricing in the South African division was higher than the comparable prior year period in equivalent currency terms,” Mondi said.

Meanwhile, there were some increases in key input costs during the quarter; however, this was offset by the benefits of the various energy optimisation projects and restructuring initiatives that the company completed during the prior year.

Furthermore, in the comparable year period, a €11-million write-down relating to the value of green-energy credits on hand in Poland was recognised, Mondi noted.

The company stated that there were no significant maintenance shutdowns during the first quarter, with the majority of the maintenance shutdowns scheduled to take place towards the end of the second quarter and into the second half of the year.

The impact of maintenance shutdowns on yearly operating profit was estimated to be between €50-million and €60-million.

Meanwhile, Mondi said while there had been significant volatility in the key currencies to which the group was exposed, the weakening trend in its key operating currencies against the euro yielded a marginal net benefit.

The group’s businesses in Poland and South Africa were net beneficiaries given their significant export exposure; however, this was partially offset by the impact of the weaker Russian rouble on Mondi’s more domestically focused Russian businesses.

“While the group remains vigilant of the ongoing political developments in the Ukraine, to date, they have had no material impact on the group’s operations,” Mondi added.

Mondi’s net debt of €1.58-billion at the end of the quarter was €41-million lower than the €1.62-billion at December 31.

“Strong operating cash inflows were offset by a seasonal increase in working capital and higher capital investment cash flows as a number of the group’s strategic investments reach completion,” Mondi said.

Finance charges for the first quarter were lower than that of the preceding quarter and the comparable prior year period, primarily as a result of the lower average net debt. 

The average maturity of the group’s committed debt facilities at March 31 was 3.5 years and Mondi had €787-million of committed, unutilised borrowing facilities available.