(Reuters) -British packaging and paper firm Mondi said on Monday that growth in core profit slowed in the third quarter on weak demand and lower prices, and warned that challenges will persist this year, sending its shares sharply lower.
Mondi said it is reorganising into two business units from three and will delay a planned investment in a new paper machine at its Canadian pulp mill because of the tough market environment.
Shares in Mondi tumbled more than 17% to their lowest since December 2013, dragging shares of European peers including Enso, UPM and SCA lower.
“Challenging trading conditions are expected to persist for the remainder of this year as demand-side confidence remains fragile, key markets remain in oversupply and current selling prices are lower than third quarter average selling prices,” the company said.
Mondi’s shares were the second-biggest loser on the STOXX 600 and were headed for their biggest one-day percentage drop ever.
The company also cited planned maintenance shutdowns in upstream pulp and paper operations, while selling prices fell during the quarter, largely reversing increases implemented in the first half of this year.
Analysts at Jefferies said Mondi’s third-quarter miss points to 2025 underlying core earnings of 1 billion euros to 1.05 billion euros. That compares with average analyst estimates of 1.16 billion euros, according to LSEG data.
Mondi posted underlying core profit of 223 million euros ($260.35 million) for the three months to September 30, down from 274 million euros in the second quarter and 290 million euros in the first, marking its lowest quarterly earnings so far this year.
($1 = 0.8565 euros)
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Tasim Zahid)
