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Mondi Falls as Rising Costs, Currency Moves Weigh on Earnings
JOHANNESBURG (Capital Markets in Africa) – Mondi Limited shares slumped the most in more than a year after South Africa’s biggest packaging maker said rising costs and unfavourable currency moves would see full-year earnings come in below expectations.
The stock plunged as much as 7 percent in early trade in Johannesburg and London, the most intraday since June 2016.
The cost of wood, energy and chemicals increased in the three months through September, while the weaker U.S. dollar and Turkish lira also weighed on the Johannesburg-based company, which reports in euros. The impact of planned maintenance shutdowns on 2017 operating profit will be about 90 million euros ($106 million), the company said in a statement Wednesday.
Underlying third-quarter operating profit rose 8 percent to 245 million euros, Mondi said.
Mondi was 6.5 percent lower at 1,953p by 8:27 a.m. in London. The Johannesburg stock was down 6.3 percent at 351.25 rand by 9:27 a.m.
The stock is up 26 percent this year in Johannesburg, the eighth best performer on the FTSE/JSE Top40 Index.
Source: Bloomberg Business News