Mondi Group (LSE:MNDI) on Monday issued a profit warning after its third-quarter earnings fell well short of expectations, causing shares to fall more than 14%.
The packaging and paper company attributed the shortfall to weak demand and extended maintenance shutdowns in softer markets. The group reported third-quarter EBITDA of €223 million, down from €274 million in the second quarter. Excluding a €20 million forest fair value gain, EBITDA came in at €203 million, 11% below Jefferies’ revised estimate of €250 million and 15% lower than Jefferies’ €242 million forecast excluding an €8 million forest fair value gain.
Jefferies noted that packaging volumes were more stable than the previous quarter, but uncoated fine paper volumes were “significantly weaker,” adding the results are “negative to the wider P&P sector, due to weak demand but more to graphic paper.”
Mondi now expects 2025 EBITDA to range between €1 billion and €1.05 billion, reflecting a 9% to 13% cut versus the €1.15 billion consensus and Jefferies’ €1.08 billion forecast. Jefferies described the downgrade as “worse than we had expected” and said “challenging trading conditions are expected to persist through year-end with fragile demand-side confidence, lower prices and volumes in oversupplied markets.”
The company also revised guidance for contributions from major projects in 2025, now expecting approximately €30 million in EBITDA, down from Jefferies’ €60 million estimate.
Mondi confirmed that capital expenditure plans have been scaled back, with new strategic investments delayed. Capex will now prioritize maintenance requirements, including a new sack machine at Hinton, Canada, while decisions on strategic projects have been postponed due to the current market environment. The group anticipates that capex will align with depreciation and amortisation levels by 2027, projecting €675 million–€725 million in 2026. Jefferies noted that with lower earnings, there is no scope for buybacks in 2026.
The company also updated its acquisition of Schumacher, raising the synergy target to €32 million over three years from a previous €22 million target, after less than six months of ownership.
Mondi announced a reorganisation combining uncoated fine paper with corrugated operations, saying the change is intended to “facilitate more streamlined organisation & decision-making and cost take-out.” Jefferies described this as a “negative loss in disclosure.”
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