JOHANNESBURG, South Africa (From news reports) -- Mondi has warned that full year profits will be below expectations, blaming cost pressures and adverse currency movements.
In a trading update on Wednesday, the company said it expected a strong final quarter with higher average selling prices. But it warned that "continuing cost pressures and negative currency impacts are expected to result in an underlying performance for the year modestly below market expectations."
The company which was spun out of mining conglomerate Anglo-American and is also listed on the Johannesburg stock exchange, said third quarter operating profit was 8 percent higher at €245m, with higher sales of fiber packaging and containerboard, the base product for cardboard boxes.
However it said costs for wood, energy and chemical inputs were higher while recycling paper prices, which is the raw material for much new packaging production, were 15 percent higher than the comparable period last year.
It was also hit by adverse currency movements, with weaker Russian rouble, Turkish lira and US dollar.
In addition it said maintenance shut downs in the third quarter had reduced operating profit by €30m, and estimated the full year impact would be around €90m.
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