PHANTOM SHARES: The Finance Ghost: On the paper trail of Mondi and Sappi

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Both paper and packaging companies have grown earnings sharply year on year, with Sappi making the best of tight global markets with its strong pricing and Mondi hoping to dispose of its Russian business.

It’s funny how companies sometimes seem to synchronise their earnings releases. A week ago, the retailers timed it perfectly with three grocery releases in a single day. This past week, Sappi and Mondi managed to release updates on the same day.

This division is now disclosed as a discontinued operation, as Mondi is hoping to dispose of the Russian business. As the price achieved for such a disposal is likely to be low, it helps that the group’s balance sheet looks a lot stronger than it did a year ago. Net debt to Ebidta is only 0.8x. The results have supported an 8% increase in the interim dividend.

The other businesses are running at Ebidta margins comfortably above 50%, with MTN Ghana putting in a particularly stunning performance of 36% Ebidta growth and a 57.4% Ebidta margin.

 

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Mondi may have missed the boat with disposing of the Russian assets.

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