Mondi posts progress but warns on costs

SOUTH African papermaker Mondi yesterday warned rising input costs were putting pressure on its margins as it posted a rise in first-quarter profit, driven by higher prices and sales.

Mondi said cost hikes would be more moderate than the 12 per cent rise seen last year.

“I would estimate that it would be around a seven to eight per cent range this year,” chief financial officer Andrew King said on a conference call.

Underlying profit in the three months to the end of March rose to €187m (£166m).

The global paper industry is slowly recovering from a slump triggered by weak demand and overcapacity that was exacerbated by the economic crisis.

Mondi’s London-listed shares closed up 2.55 per cent at 602.5p.