JOHANNESBURG – Shares in South Africa’s Mondi fell to a more than two-month low on Thursday after the packaging and paper company said third-quarter underlying profit dropped 12 percent from the previous quarter due to lower selling prices.
Underlying operating profit fell to 227 million euros ($254 million) in the three months through September from 259 million euros in the second quarter, Mondi said in a statement. The figure was up 3 percent on the third quarter last year.
Shares in Mondi closed down 3.75 percent at 276.24 rand, a level last seen on Aug. 17. Its London listed shares were down 3.4 percent at 1530 GMT.
“As anticipated, generally lower average selling prices and a significantly lower fair value gain on forestry assets resulted in a 12 percent reduction in underlying operating profit from the second quarter,” Mondi said in a statement.
For its packaging paper division, its biggest revenue generator, average benchmark European virgin containerboard prices were similar to the previous quarter but over 7 percent down on the comparable prior year period.
Prices at its kraft paper unit, the common multi-purpose brown wrapping paper, were marginally lower versus the previous quarter.
Mondi said it expected to benefit from stable to higher selling prices in a number of its key product segments moving into 2017 following the downward pressure seen during 2016.
“Costs remain generally stable, albeit with near-term pressure in certain areas” said Mondi.
($1 = 0.8928 euros)
(Reporting by Nqobile Dludla; Editing by Mark Potter)