Mondi pulls dividend, cuts capex spend

Paper and packaging maker Mondi pulled its dividend and cut capital expenditure by up to €200m as plant closures forced by the coronavirus crisis hit production.

The company on Thursday said it it had seen a deterioration in its uncoated fine paper order book in Europe and South Africa as the effects of government lockdown measures took hold.

There was some demand for consumer-related applications, particularly in food, beverage and personal and home care products as panic buyers cleared supermarkets shelves.

“We are seeing somewhat weaker trading with our customers in building and construction industries and a mixed picture in industrial and other end-uses,” Mondi said.

Mondi forecast expect capital expenditure of around €600m from previous guidance of €700m - €800m in 2020, which would cause limited delays to the commissioning of certain of our capital investment projects.

“We have also postponed annual mill maintenance shuts to the second half of the year,” it added.