Mondi Group's underlying operating profit jumped 15% year over year in the first quarter as higher average selling prices and profit improvement initiatives outweighed higher costs and negative currency effects.
The underlying operating profit for the quarter was €295 million, as compared to a restated profit of €256 million in the year-ago period. The year-ago operating profit was restated due to the implementation of the early-adopted new leases accounting standard IFRS 16.
The packaging and paper company estimated that a prolonged maintenance shut at the Richards Bay mill in South Africa impacted the first-quarter operating profit by around €35 million. For 2018, Mondi expects a hit of around €115 million due to the maintenance shuts, which is slightly above the company's previous estimate.
Like-for-like sales volumes were stable in the quarter when compared to the year-ago period.
Currency movements had a net negative impact on operating profit, year over year, driven mainly by a weaker U.S. dollar and Russian ruble relative to the euro, and a net negative impact quarter over quarter, mainly due to a stronger South African rand.
"We continue to experience a strong pricing environment in a number of our key product segments, supported by good demand growth, although we do continue to see inflationary cost pressures across the Group and currencies are currently a headwind," the company said in a release.
Mondi is listed in London as Mondi PLC and in South Africa as Mondi Ltd.