Mondi has reported a softer start to 2026, with underlying EBITDA easing to €212 million in the first quarter from €214 million in Q4 2025, as the packaging and paper group grappled with mounting cost pressures across its operations.
Shares were down 5% in early trading on Friday as Mondi became the latest company to warn of the impact of the war in Iran.
A concern for investors will be that profits fell despite higher sales volumes in both the Corrugated Packaging and Flexible Packaging units, with volume gains offset by lower average selling prices and rising energy-related input costs towards the end of the quarter.
Margins in the converting operations came under pressure, with Corrugated Solutions and Paper Bags bearing the brunt, while Consumer Flexibles held up on resilient end-market demand.
The cost backdrop has been further complicated by heightened geopolitical tensions in the Middle East, which have driven up energy, raw materials, and logistics costs across the business.
Mondi has limited direct exposure to the region but is feeling the knock-on effects and is pushing through price increases in response, although the full benefit is not expected to land until the third quarter, given the customary lag.
Adding to the pressure on reported earnings, Mondi now expects its full-year forestry fair value gain for 2026 to be nil, following a recent drop in South African wood prices, a step down that will remove a useful tailwind from the numbers.
There are a number of reason for investors are cautious, and management appears to recognise this by taking action on costs.
The group announced the closure of three further converting plants in April, a Consumer Flexibles site in Hungary and Corrugated Solutions facilities in Poland and Germany, taking recent closures to six and reducing headcount by 450 this year.