South Africa’s Mondi swings to a profit in the first half of 2010

Paper maker Mondi again raised prices for some products and forecast a strong second half yesterday after better demand and prices helped it return to a half-year profit.

South Africa’s Mondi, which is also listed in London, said business picked up across all of its paper grades and its domestic division was also improving.

“Mondi achieved a pleasing result in the period against a backdrop of improving market conditions, supported by a particularly strong performance from the European uncoated fine paper business,” chief executive David Hathorn said.

Mondi’s headline earnings per share for the six months to the end of June rose to €24.8 cents from a loss of €0.8 cents a year earlier. Headline EPS is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items.

“Despite cost pressures, the positive pricing momentum witnessed in Europe since the beginning of the fourth quarter of 2009 in most of the group’s key grades should see the business continue to deliver a strong performance in the second half,” Hathorn said. He warned that outlook for the South African division was still uncertain despite steps to improve profitability.