Mondi has just delivered a rough set of half-year numbers and been rewarded for it. The packaging and paper group, listed in both London and Johannesburg, reported underlying earnings — its profit before interest, tax and one-off items — of €379 million for the six months to June, down from €564 million a year earlier. Basic underlying earnings per share fell to 11.6 euro cents, from 42.7 cents, and the interim dividend was cut to 9.42 cents. Revenue edged up to about €3.98 billion, helped by an acquired business and higher volumes.
From building to trimming
The story investors latched onto was not the profit drop but the response to it. With its big expansion projects now largely finished, Mondi is pivoting from adding capacity to squeezing costs. It is closing six converting plants across Europe — two already shut, the rest due by year-end — and moving production to larger, more efficient factories. The closures are expected to cut about 580 roles, transfer roughly 800 customers and relocate 30 pieces of heavy equipment across the network. Mondi also booked a €320 million charge for write-downs and restructuring, the biggest at a recycled-containerboard mill in Italy hit by weak demand, oversupply and high energy costs.
Discipline over expansion
Management paired the cuts with a lighter spending plan, trimming expected 2026 capital expenditure to around €500 million from €550 million. Cash generated from operations still came in at €347 million, underpinned by tight working-capital management. Chief executive Andrew King said pricing actions and cost discipline had improved trading momentum, with the group entering the second half on higher packaging-paper prices and healthy order books, even as Middle East supply-chain disruption pushed up input costs. The company has also added about 300,000 tonnes of new capacity this year to chase demand in e-commerce packaging. Investors get their next read on the turnaround at Mondi's third-quarter update in October.
The market liked the pivot. Mondi's London-listed shares rose about 9% on results day, while its Johannesburg line jumped nearly 16% to above R200. For a company that spent years building, the applause came for a different move entirely: knowing when to stop.
