- Solid sales and volumes
- Sharp increase in raw material costs at MM Karton weighs on profit
- MM Packaging maintains good level
- Cartonboard price increase is first priority
The Mayr-Melnhof Group was able to sustain overall good capacity utilization in both divisions and to maintain the previous year's sales level in the first quarter of 2017. This was achieved despite restrained demand at the beginning of the year and persistently intense competition. The packaging division recorded a further quarter with high profitability. In contrast, the result of the cartonboard division was weighed by another rise in recovered paper prices. Accordingly, passing on increased input costs through higher selling prices is now first priority with the aim to keep on long-term profitability in both segments.
GROUP KEY INDICATORS - IFRS
in millions of EUR 1Q/2017 1Q/2016 +/-
Sales 584.5 576.0 +1.5 %
Operating profit 50.6 55.2 -8.3 %
Operating margin (in %) 8.7 % 9.6 %
Profit before tax 49.2 53.2 -7.5 %
Income tax expense (12.3) (13.8)
Profit for the period 36.9 39.4 -6.3 %
Earnings per share (in EUR) 1.84 1.96
The Group's consolidated sales increased to EUR 584.5 million and were thus 1.5 % above the comparative figure of the previous year (1Q 2016: EUR 576.0 million). This slight rise primarily results from the packaging division.
Operating profit, at EUR 50.6 million, was 8.3 % or EUR 4.6 million below the comparative figure of the previous year (1Q 2016: EUR 55.2 million). A stable performance at a high level in the packaging division was contrasted by a decline in the cartonboard division. The Group's operating margin reached 8.7 %, following 9.6 % in the first three months of the previous year.
Financial income amounted to EUR 0.8 million (1Q 2016: EUR 0.7 million), financial expenses to EUR -1.4 million (1Q 2016: EUR -1.6 million).
Profit before tax thus totaled EUR 49.2 million (1Q 2016: EUR 53.2 million). Income tax expense was at EUR 12.3 million (1Q 2016: EUR 13.8 million), resulting in an effective Group tax rate of 25.0 % (1Q 2016: 25.9 %).
Profit for the period decreased by 6.3 % to EUR 36.9 million (1Q 2016: EUR 39.4 million), representing 6.3 % of sales (1Q 2016: 6.8 %).
Our first priority currently is to pass on the increased raw material costs in a stable European market environment, however lacking impulses. Continuing highly competitive general conditions are sustaining margin pressure, which we are countering with targeted measures to reduce costs and increase business volume. Besides exploiting organic growth opportunities, we continue to focus on expansion through acquisitions.
Due to the strong profit development in the first half of the previous year supported by a favorable product mix in the packaging division, as well as the successive compensation of increased raw material costs, interim results in the first half-year of 2017 will, as in the first quarter, come in below the comparative figure of last year. The target for 2017, however, remains to tie up with the challenging level of 2016 best possible.
Please find the detailed Press Release and the Interim Report for the 1st
Quarter of 2017 on our homepage http://www.mayr-melnhof.com
August 17, 2017 Half-Year Results 2017
For further information, please contact:
Mayr-Melnhof Karton AG
Tel.: +43 1 501 36-91180
Fax: +43 1 501 36-191195
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