Mondi is increasing prices and reducing its headcount as the US-Israel war on Iran and Lebanon escalates costs for the paper and packaging group.
The company said trading in the first quarter of 2026 “remained challenging”, with underlying EBITDA [earnings before interest, taxes, depreciation, and amortisation] at €212m ($248.7m), compared with €214m in the previous quarter.
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The latest figure included an €8m forestry fair value gain, against €1m in Q4 2025.
Sales volumes rose from the previous quarter in corrugated packaging and flexible packaging, helped by added capacity, the group’s spread across regions and end markets, and the absence of scheduled maintenance stoppages.
That improvement was countered by weaker average selling prices and a rise in energy-related input costs near the end of the quarter.
In converting operations, Mondi said margins were under strain in the corrugated solutions and paper bag divisions while consumer flexibles was broadly steady, supported by “resilient end-markets”.
The company said heightened tensions in the Middle East had added to instability in an already difficult operating backdrop.
While Mondi’s direct exposure to the region is “limited” and operations remain safe, it has faced higher energy, raw material and logistics costs across the business.
In response, the group is taking pricing action and expects those increases to be fully reflected in the third quarter, after the usual delay.
Mondi also said that a recent drop in wood prices in South Africa means its full-year forestry fair value gain for 2026 is now “expected to be nil”, assuming no major change in market conditions for the rest of the year.
As part of wider cost measures, the company decided to shut three more converting plants this month: a consumer flexibles site in Hungary, and corrugated solutions plants in Poland and Germany.
Those closures are due to cut its headcount by 450 this year.
That takes the total number of recently announced plant closures to six, with customer volumes being moved to other facilities within the group’s network.
Mondi said it remains focused on cash flow, with spending and working capital kept under close control.
Mondi Group CEO Andrew King said: “Against a backdrop of challenging market conditions, sales volumes increased, although lower selling prices and, latterly, cost pressures linked to escalating geopolitical tensions, weighed on underlying EBITDA.
“These pressures persist into the second quarter, and we are taking pricing actions to mitigate their impact. While there is an inherent time lag, we expect these measures to take full effect in the third quarter.
“Despite the uncertain outlook, we continue to focus on what we can control – driving operational excellence, rigorous cost and margin discipline, optimising our production footprint and focused cashflow management. These actions underpin our confidence in our ability to navigate the current headwinds and continue to deliver our high-quality range of sustainable packaging and paper products for our customers.”
Earlier this month, the company disclosed plans to broaden its paper bag activities in Southeast Asia through a joint venture with Indonesian cement producer PT Indocement Tunggal Prakarsa.
