Mondi plc (LSE:MNDI) announced its first-half 2025 EBITDA at €564 million on Thursday, falling short of analyst consensus of €580 million by 3%, with the second quarter notably weaker than expected.
The packaging and paper specialist recorded €274 million in EBITDA for Q2, which included €16 million from forest fair value gains, marking a miss of over 6% compared to forecasts.
This shortfall was mainly attributed to difficulties in the UFP division and adverse currency impacts in the Flexibles segment. Earnings per share reached €0.43, below the anticipated €0.47.
Despite the earnings shortfall, Mondi reported strong cash flow generation, although its net debt to EBITDA ratio climbed to 2.5x following recent acquisitions, up from 1.7x in 2024. Return on capital employed dropped to 8.4% from 9.6% the previous year.
On the upside, the company confirmed that its capital investment projects are progressing according to schedule, with planned expenditures of €50-75 million for 2025, most of which will occur in the latter half of the year.
The acquisitions completed recently are expected to add roughly €30 million to this year’s results, while the company reaffirmed anticipated synergies of €22 million over three years, despite headwinds in the corrugated packaging market.
Mondi kept its maintenance capital expenditure outlook steady at €20 million for H1 and €80 million for H2. Depreciation and amortization forecasts were revised upwards to €475-500 million (including acquisitions), from the prior range of €450-475 million. Finance costs are now projected at €100 million, higher than the earlier estimate of €90 million.
Looking forward, Mondi highlighted the ongoing geopolitical and macroeconomic uncertainties that may continue to challenge market conditions in the second half. The company remains committed to initiatives aimed at boosting productivity, cutting costs, and optimizing cash flow, while focusing on long-term growth opportunities in structurally expanding markets.
Forest fair value gains totaled €18 million in the first half, falling within the company’s guidance range of €10-20 million, with €2 million recognized in Q1 and €16 million in Q2. The 2025 forest fair value target remains at €30-60 million.
Mondi is well positioned to benefit from stronger earnings and free cash flow when the packaging industry eventually rebounds, supported by its efficient, well-invested assets and the returns expected from its €1.2 billion major capital investment plan.
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