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Investing.com -- Mondi plc (LON:MNDI) on Thursday reported first-half 2025 EBITDA of €564 million, falling 3% short of consensus estimates of €580 million, with second-quarter results particularly disappointing.
The packaging and paper company’s second-quarter EBITDA came in at €274 million, including €16 million in forest fair value gains, representing more than a 6% miss compared to estimates.
This underperformance was primarily driven by challenges in the UFP division and foreign exchange headwinds in the Flexibles segment.
Earnings per share reached €0.43, 9% below the consensus expectation of €0.47.
Despite the earnings miss, Mondi demonstrated robust cash generation, though its net debt to EBITDA ratio increased to 2.5x following recent acquisitions, up from 1.7x in 2024.
Return on capital employed declined to 8.4% from 9.6% in 2024.
On a positive note, the company confirmed its capital expenditure projects are ramping up as planned, with €50-75 million expected in 2025, two-thirds of which will come in the second half of the year.
Mondi’s recent acquisitions are projected to contribute approximately €30 million to 2025 results, with the company confirming €22 million in three-year synergies despite challenging conditions in the corrugated segment.
The company maintained its maintenance capital expenditure guidance at €20 million for the first half and €80 million for the second half.
Depreciation and amortization estimates were raised to €475-500 million including acquisitions, up from the previous €450-475 million range. Finance costs are now expected to be higher at €100 million, compared to the earlier projection of €90 million.
Looking ahead, Mondi acknowledged ongoing geopolitical and macroeconomic uncertainties that will likely continue to impact trading conditions in the second half of the year. The company remains focused on productivity, cost and cash flow optimization initiatives while positioning itself for long-term value creation in structurally growing markets.
Mondi’s forest fair value gains totaled €18 million in the first half, within the €10-20 million guidance range, with €2 million in the first quarter and €16 million in the second quarter. The company maintained its 2025 forest fair value guidance at €30-60 million.
The company is positioned to see strong earnings and free cash flow improvements when the packaging sector eventually recovers, supported by its low-cost, well-invested asset base and returns from its €1.2 billion major capital expenditure program.
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