Mondi Group’s revenue in 2012 reached €5.8 billion; demand in Russia was down after strong 2011

London/Johannesburg, February 21. Revenue of Mondi Group in 2012 amounted to €5.8 billion, compared to €5.74 billion a year ago, the company said in its full-year report.

“Continued strong profitability resulted in a return on capital employed (ROCE) of 13.7%, once again above our through-the-cycle target of 13%”, company’s CEO David Hathorn noticed.

While Western European markets remained soft, impacted by both short-term cyclical and longer-term structural challenges, demand growth in Eastern Europe (excluding the CIS region) was marginally positive. Market demand in Russia was down on a very strong 2011. In aggregate, Mondi’s sales volumes for uncoated fine paper were on a similar level to that of the previous year.

In Europe, selling prices were stable throughout the year with average benchmark European uncoated fine paper prices declining by 1% in the year, while marginal price increases were achieved in the Russian market.

Russia entered WTO in August 2012 and, as a consequence, import duties for uncoated fine paper will reduce by 2.5% per year until they reach a level of 5% in 2016. Implementation is due to start in 2013. The reduction in trade duties, coupled with new capacity coming on stream in both Russia and France, is expected to place some pressure on pricing in the short to medium term, Mondi said in its full-year report.

The business in 2012 benefited from lower input costs, driven by lower pulp costs for the unintegrated Neusiedler operation, partially offset by higher wood costs in Russia and generally higher energy costs. Fixed costs were higher, largely due to a higher depreciation charge offset by ongoing cost optimisation initiatives.