Mondi (LSE:MNDI) shares fell approximately 9.8% to 737p on Thursday after the packaging and paper group reported a decline in third-quarter underlying EBITDA and warned that higher energy and wood costs continued to affect profitability.
The company reported underlying EBITDA of €196 million for the third quarter of 2026, down 12% compared with the corresponding period last year, as input cost inflation offset the benefits of improved pricing.
Although the figure represented an increase from the €167 million recorded in the second quarter, the comparison was affected by a €43 million forestry fair value loss recognised during the earlier period.
Excluding that loss, underlying EBITDA declined on a sequential basis, indicating that operating profitability remained under pressure during the third quarter.
Mondi said input costs had increased more than anticipated, particularly for energy and wood supplies in Central and Eastern Europe.
Energy-related expenditure continued to rise during the period, while higher wood prices added to production costs across parts of the group’s operations.
Mondi Announces Further Paper Price Increases
In response to higher operating costs, Mondi has announced additional price increases across several paper grades.
The company expects the measures to contribute to financial performance towards the end of 2026 and into 2027, although the timing and extent of the benefits will depend on market conditions.
Mondi said order books remained supportive and that pricing momentum had improved, despite the continued pressure from input costs.
The group is also pursuing operational efficiency measures, including cost optimisation and improvements to its manufacturing network.
Chief Executive Andrew King said the company had maintained its focus on operational performance despite the more challenging cost environment.
“We delivered a resilient performance in the third quarter against a backdrop of rising input costs, with good order books supporting positive price momentum. We continued to make progress on operational excellence, cost optimisation and improving the efficiency of our plant network to enhance competitiveness. As we enter the fourth quarter, higher packaging paper prices are expected to support performance, notwithstanding ongoing input cost pressures.”
Energy Prices Create Uncertainty for Fourth Quarter
Mondi warned that energy markets remained volatile, creating uncertainty around production costs during the final quarter of the year.
The company highlighted South African diesel prices as a particular concern and said that, if current energy price levels persist, it does not expect to record a forestry fair value gain in the fourth quarter.
The outlook contrasts with periods in which forestry valuation movements have contributed positively to reported underlying EBITDA.
Mondi’s assessment reflects current market conditions and remains dependent on developments in energy prices during the remainder of 2026.
The company expects higher packaging paper prices to provide some support to fourth-quarter performance, although input cost pressures are likely to remain a factor.
Shares Decline Amid Wider Market Weakness
Mondi’s share price declined to approximately 737p following the trading update, representing a fall of nearly 9.8% during Thursday’s session.
At that level, the shares were below their reported 52-week high of 981.4p but remained above the 52-week low of 667.4p.
The decline coincided with broader weakness in equity markets following higher-than-expected US inflation figures and selling pressure in Asian semiconductor stocks.
US annual consumer price inflation increased to 3.7% in September from 3.4% in August, exceeding economists’ expectations of 3.6%, according to the figures cited in the market report.
The wider market conditions provided an additional backdrop to trading in London-listed equities, although Mondi’s third-quarter profitability and cost outlook were central developments in its company update.
The group’s financial performance over the coming quarters will depend partly on the extent to which announced paper price increases offset higher energy and raw material costs.
Mondi continues to implement operational efficiency initiatives while managing input price volatility across its manufacturing operations.
About Mondi
Mondi (LSE:MNDI) is an international packaging and paper group producing packaging materials and paper products for industrial and consumer markets.
Its operations include the manufacture of packaging paper and other fibre-based products, supported by production facilities and forestry-related activities.
The group’s financial performance is influenced by packaging demand, selling prices, raw material costs, energy expenditure and operational efficiency across its manufacturing network.
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