2 Min Read
(Recasts, adds quote, shares, capex)
By Nqobile Dludla
JOHANNESBURG, May 11 (Reuters) - The new chief executive of packaging and paper company Mondi Group is committed to maintaining its expansion strategy, he said on Thursday after the group reported a drop in quarterly profit.
The South African company completed four acquisitions last year under outgoing CEO David Hathorn, expanding its fibre and consumer packaging operations deeper into Poland, Turkey and Russia, and new chief Peter Oswald says more deals are in the pipeline.
"I see a lot of continuity," said Oswald, who officially took the helm on Thursday. "It's about continuing the journey, making acquisitions at reasonable prices and driving our performance."
Oswald, who previously ran the company's Europe and international division, said that Mondi had identified a number of acquisitions in the short-term to boost the packaging businesses, without giving further details.
Mondi, which is also listed in London, has spent about 1.6 billion euros in acquisitions over the past four years and is aiming for 2017 capital expenditure between 600 million euros and 650 million euros.
Shares in the company, however, fell 2.4 percent to 344.78 rand after it posted first-quarter underlying operating profit down 6 percent year on year at 252 million euros ($273.8 million) and said that planned maintenance will wipe about 80 million euros from 2017 operating profit.
The company said results were hit by lower gains on the value of forestry assets, a stronger rand and cost and pricing pressure.
"Strong sales volume growth was more than offset by a significantly lower forestry fair value gain, inflationary cost pressures and lower average selling prices," it said. ($1 = 0.9203 euros)
Editing by David Goodman