Mondi (MDNI) shares jumped 13% on Thursday as investors focused on signs of a recovery in the packaging market, pushing the stock to around 894p despite the company reporting a first-half loss and cutting its dividend.
The move marks one of the strongest daily gains for the shares this year, although the stock remains 24% lower over the past 12 months and well below its 52-week high of 1,174.5p.
Mondi said trading momentum improved throughout the first half, with higher packaging paper prices, stronger order books and early benefits from its network optimisation programme supporting the outlook for the second half.
The company swung to a pretax loss of €240 million from a €247 million profit a year earlier after booking €320 million of impairment and restructuring charges, while underlying EBITDA fell 33% to €379 million as lower selling prices and higher input costs continued to pressure margins.
However, investors looked beyond the weak headline figures and focused on improving fundamentals. Mondi said price increases introduced during the first half are expected to have a greater impact from the third quarter, while demand for packaging paper has strengthened.
The group has also been working to reduce costs and improve efficiency, with capital expenditure guidance for 2026 lowered to around €500 million as major projects near completion. Higher wood, energy and logistics costs remain a challenge, but management believes recent actions are improving cash generation and competitiveness.
The interim dividend was reduced to 9.42 euro cents per share from 23.33 cents, reflecting the impact of weaker earnings, although the market reaction suggests investors are placing more importance on the recovery potential rather than the short-term payout.
Chief executive Andrew King said Mondi entered the second half with better trading momentum, supported by higher packaging paper prices and good order books.