| Wed 1 Aug 2007, 10:55 | | MND / MNP - Mondi - Interim Report For The Six Mon |
|
MND MNP
MND MNP
MND / MNP - Mondi - Interim Report For The Six Months Ended 30 June 2007
Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND & ISIN: ZAE000097051
Mondi plc
(Incorporated in England and Wales)
(Registration number: 6209386)
JSE share code: MNP & ISIN: GB00B1CRLC47
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2007
Financial Summary
EUR million, except for percentages
and per share 6 months 6 months Half year
measures June 2007 June 2006 change %
Group revenue 3,052 2,857 +7
EBITDA (1) 421 343 +23
Underlying operating profit (2) 243 166 +46
Underlying profit before tax (3) 203 125 +62
Reported profit before tax 250 64
Basic pro forma earnings per share
(EUR cents per share) (4) 31.9 2.7
Underlying pro forma earnings per
share (EUR cents per share) (4), (5) 22.6 11.9 +90
Headline pro forma earnings per share
(EUR cents per share) (4), (5) 17.3 12.1 +43
Interim dividend per share (EUR cents
per share) 7.3 N/A N/A
Cash inflow from operations 356 229 +55
Group ROCE (6) 10.0% 8.2% +22
Highlights:
- Group revenue up 7% at EUR3.1 billion
- EBITDA up 23% at EUR421 million
- Underlying operating profit up 46% at EUR243 million driven by an improved
operating performance across the Group and significant pick up in the
trading environment in Mondi Packaging and a major turnaround in the South
African operations within Mondi Business Paper
- Successful listing of the Mondi Group on the JSE and LSE on 3 July 2007
completes demerger from Anglo American plc
David Hathorn, Mondi Group Chief Executive, said:
"I am very pleased that Mondi`s first set of results as an independent Group
shows a substantial recovery in operating profits and reflects an improved
operating performance and trading environment across all business areas.
In the second half we expect to see continued pressure from rising input costs
and weakness of the US dollar. However, the positive trends in Mondi`s key
business segments are expected to continue and the Board is confident of
achieving good progress for the year as a whole."
1 EBITDA is operating profit of subsidiaries and joint ventures before special
items, depreciation and amortisation.
2 Underlying operating profit is operating profit of subsidiaries and joint
ventures before special items.
3 Underlying profit before tax is reported profit before tax before special
items.
4 The calculation of basic earnings, underlying earnings and headline earnings
per share has been based on the actual number of shares issued on admission
to the Johannesburg and London stock exchanges of 514,137,127 shares.
5 The Group has presented underlying earnings per share to exclude the impact
of special items, in order to present an additional comparise for the
periods shown in the combined condensed and consolidated financial statement,
and headline earnings per share to exclude the impact of special items apart
from demerger costs that have been reflected as special items.
6 Group return on capital employed (ROCE) is an annualised measure based on
underlying operating profit plus share of associates net earnings divided by
average trading capital employed.
Group Performance Overview
The Group experienced a substantial improvement in operating performance in the
first half of 2007, with underlying operating profit of EUR243 million up EUR77
million or 46% on the first half of 2006.
We saw an improved operating performance across the Group and a significant
pick up in the trading environment in Mondi Packaging, with price increases
achieved across all major paper grades. Mondi Business Paper also benefited
from the improved operability of the PM31 paper machine in Merebank, South
Africa, as well as modest increases in uncoated woodfree paper pricing. These
positive developments were partially offset by significant inflation in fibre
costs (wood, pulp and recycled fibre) as a result of strong Chinese fibre
demand and alternative uses for wood in Europe.
Mondi Packaging`s underlying operating profit increased by EUR48 million, up
49%, with the Corrugated Business benefiting from higher containerboard prices,
coupled with some improvement in the converting operations and better
performances in both the Bag and Flexibles Businesses. Mondi Business Paper`s
underlying operating profit increased by EUR34 million, or 74%, principally
because of a significant turnaround in the South Africa operations. This was
due to a restructuring of the business resulting in the improved operating
performance of PM31 paper machine in Merebank following the rebuild in 2005 and
cost reductions throughout the business. Mondi Packaging South Africa
underlying operating profit was in line with the prior year (rand exchange rate
adversely impacted translation of results into euros), but was up 25% in local
currency on the back of improved pricing and demand. Corporate costs were
higher as a result of establishing Mondi`s own corporate presence through the
demerger from Anglo American plc.
Underlying operating margin was 8.0% (2006: 5.8%) reflecting the good operating
performance and improvement in pricing which was partially offset by input cost
pressures. The Group achieved EUR73 million in cost savings and profit
improvement initiatives in the first half of 2007, partly compensating for
higher fibre and other input costs. The improved operating performance and
lower capital employed in the current period meant that the Group`s return on
average capital employed to June 2007 was 10.0% versus 8.2% in the prior year.
Underlying proforma earnings per share, calculated based on the combined number
of ordinary shares for Mondi Limited and Mondi plc in issue on Admission to the
Johannesburg and London stock exchanges for the period were 22.6 euro cents per
share, up 90% on the first half of 2006. The Group will pay a maiden interim
dividend of 7.3 euro cents per share.
Mondi Packaging
EUR million 6 months 6 months Half year
June 2007 June 2006 change %
Segment revenue 1,736 1,550 +12
- of which inter -segment revenue 19 23
EBITDA 237 191 +24
Underlying operating profit 146 98 +49
Corrugated Business 66 39 +69
Bag Business 64 49 +31
Flexibles Business 16 10 +60
Capital expenditure 60 106 -43
Net segment assets 2,551 2,412 +6
Return on net segment assets (%) (7) 11.0% 9.0% +22
7 Return on net segment assets is an annualised measure based on underlying
operating profit divided by average net segment assets.
Mondi Packaging results benefited from record production, ongoing productivity
and efficiency gains, an improved trading environment and the restructuring
actions taken in 2006. This was mitigated by increased wood and recycled paper
costs which were up 27% and 26% respectively on the comparable period.
Within the Corrugated Business, the positive containerboard price trends and
demand growth which were seen in 2006 have continued into 2007. Kraftliner
prices were almost flat compared to end of 2006, but up by some 15% compared to
the first half of 2006 with white top kraftliner up 4% (1).
Corrugated box prices increased reflecting the passing on of containerboard
price increases, however, profit margins remain at an unsatisfactory level and
further box price increases are required. The increase in profits was supported
by the restructuring of the downstream corrugated packaging operations in 2006.
The Bag Business recorded improved kraft paper prices and volumes and is
further benefiting from the acquisition of Stambolijski in the second half of
2006. The Bag business downstream converting operations also saw a strong
improvement in demand in the first half, mainly from the Construction Industry,
leading to an unusually high sales volume increase of 4%.
Improvement in the Flexibles Businesses was mainly driven by price increases
and efficiency enhancements and also includes the benefit from acquisitions
made in the second half of 2006.
Mondi Packaging delivered EUR33 million of profit improvements and cost savings
in the period. A record packaging paper production output was achieved
(production volumes up 5%) with 5 out of 13 paper mills achieving new
production records in the period. In addition the Swiecie mill successfully
completed the major rebuild of PM1.
During the period, the 40% associate equity stake in Bischof + Klein GmbH was
disposed of for EUR57 million resulting in a profit on sale of EUR19 million.
In addition, to avoid a mandatory offer for the minority interests in Mondi
Packaging Paper Swiecie S.A following Mondi`s demerger from Anglo American plc,
a 5.3% stake in Swiecie was disposed for EUR66 million resulting in a profit on
sale of EUR57 million (Mondi`s ownership post disposal is 66%).
On 6 July 2007 Mondi Packaging announced the acquisition of 53.56% of Tire
Kutsan, a Turkish corrugated packaging company and 100% of the Austrian based
Unterland flexible packaging operations, both subject to regulatory approval.
The debt free enterprise valuation of these acquisitions is EUR190 million and
EUR74 million respectively. Both these acquisitions are exciting additions to
the Mondi Group and strengthen our packaging division in two of its key
segments of corrugated and flexibles.
Finalisation of the level of available support from the Polish authorities for
the approved EUR350 million 470,000 tonne lightweight recycled containerboard
machine and new 250 million m2 per annum corrugated box plant at the Mondi
Packaging Paper Swiecie mill in Poland is progressing well. The completion date
is estimated to be mid to late 2009.
1 Source FOEX: PIX Packaging Europe Index History
Mondi Business Paper
EUR million 6 months 6 months Half year
June 2007 June 2006 change %
Segment revenue 966 958 +1
- of which inter -segment revenue 86 75
EBITDA 149 114 +31
Underlying operating profit 80 46 +74
Capital expenditure 52 84 -38
Net segment assets 2,180 2,157 +1
Return on net segment assets (%) (7) 6.4% 5.0% +28
The increase in underlying operating profit was largely driven by the
significant improvement in the South Africa operations. The operational
difficulties experienced in the first half of 2006, following the 2005 rebuild
of PM31 in Merebank, have now largely been addressed. The overall restructuring
of the South African operations is progressing well.
Uncoated woodfree production was 7.2% higher (continuing operations) than the
first half of 2006 supported by good performances at our Slovakian and Russian
mills. Total pulp production was up 10%, with the Richards Bay RB720 pulp line
operating at improved rates following commissioning in 2005.
The average uncoated woodfree paper price improvements of 5-6% since the
beginning of the year were mostly offset by higher pulp input costs at the
non-integrated mills, and higher purchased wood costs. The overall fibre cost
increase has been mitigated by our own low cost wood resources in South Africa
and Russia. Cost savings and profit improvement initiatives contributed EUR37
million during the period.
Further increases in paper prices are required for returns to reach acceptable
levels. Whilst industry mill operating rates have improved to over 90% (but
traditionally soften as we move into the European summer) we do expect to see
further improvement in operating rates post the European summer, helped by some
industry plant closure announcements, and the normal post summer pick up in
demand.
Mondi Business Paper will be taking usual downtime in the second half for
planned maintenance shuts at its major mills. In addition the headbox at the
PM31 paper machine will be further modified to ensure optimum performance,
which is scheduled to take up to 3 weeks. This will in total result in a
capacity reduction of 35,000 tonnes in the second half.
Mondi Business Paper is making good progress in obtaining the necessary
operating permits and agreement of governmental support for the approved EUR525
million modernisation and expansion at the Syktyvkar mill in Russia. Planning
for the project is progressing well with completion expected by mid 2010.
Mondi Packaging South Africa
EUR million 6 months 6 months Half year
June 2007 June 2006 change %
Segment revenue 173 185 -6
- of which inter -segment revenue 17 13
EBITDA 21 21 -
Underlying operating profit 15 15 -
Capital expenditure 14 16 -13
Net segment assets 208 202 +3
Return on net segment assets (%) (7) 17.1% 19.1% -10
Demand across all business segments has been strong largely due to an increase
in local consumption and a good agricultural season. Underlying operating
profit was 25% higher in local currency versus the first half of 2006 also
benefiting from a good operational performance. However, as a result of the
significantly weaker rand exchange rate, this improved result is flat year on
year on translation into euro.
The Springs mill optimisation project costing EUR12 million is on track for
commissioning in August 2007. The Felixton optimisation project costing EUR25
million, which is due for commissioning in March 2008 is progressing well and
will, when complete, enable Felixton to produce lighter weight paper and
increase production by 50,000 tonnes of fluting.
Regulatory approval was received on 4 July 2007 for the EUR100 million
acquisition of Lenco, a rigid plastics business. Lenco will be consolidated
from the beginning of the second half of 2007.
Merchant and Newsprint businesses
EUR million 6 months 6 months Half year
June 2007 June 2006 change %
260 +10
Segment revenue 286
- of which inter -segment revenue 1 -
22 +23
EBITDA 27
Underlying operating profit 16 12 +33
Capital expenditure 8 2 +300
Net segment assets 284 251 +13
Return on net segment assets (%) (7) 12.3% 7.7% +60
Merchant and Newsprint underlying operating profit at EUR16 million is up 33%
on the first half of 2006. This is due to improved pricing and volumes at
Europapier and improved prices and lower input costs at Aylesford. Mondi
Shanduka Newsprint underlying profit was higher in local currency but lower in
euros as a result of the weaker rand.
Corporate and other businesses
Corporate costs were EUR9 million higher than in the first half of 2006 due to
Mondi establishing itself as an independent business with certain functions
previously performed by Anglo American plc now being resourced by the Mondi
Group.
Operating special items
The pre-tax charge of EUR8 million is fully described in note 4 to the accounts
and is mainly made up of an asset impairment and charges relating to retention
arrangements.
Net profit on disposals
Net profit on disposal includes the sale of Bischof + Klein GmbH (EUR19 million
profit), the sale of a 5.3% stake in Mondi Packaging Paper Swiecie S.A. (EUR57
million profit), and the sale of various Corrugating converting operations (EUR8
million profit) and have been separately identified given their materiality. The
Corrugated converting operations, which were held for sale at the end of 2006,
were disposed of as part of a restructuring programme to improve the Corrugated
results.
Special finance charges
As part of the demerger from Anglo American plc, certain long term loans in
South Africa were closed out at a cost of EUR29 million, representing largely
the interest foregone on the settlement of the loans. Given the materiality of
this amount, the Board believe that it is more appropriate to disclose this
separately on the income statement.
Net finance costs
Net finance costs of EUR42 million, before special financing items, are EUR3
million lower than 2006 (EUR45 million) following the debt restructuring in
South Africa with Anglo American plc.
It should be noted that, going forward, finance costs will reflect Mondi`s new
capital structure.
Taxation
The effective tax rate at 30% was 3.6% lower than in 2006 due to the higher
level of non deductible expenditure in 2006 and fewer prior year adjustments.
Minority interests
Minority interests were EUR4 million higher than the first half of 2006 with
higher earnings at the main non-wholly owned subsidiaries of Mondi Packaging
Swiecie and Mondi Business Paper (Ruzomberok) partly offset by the benefit in
2006 of higher income on green energy credits and CO2 emission sales at both
Swiecie and Ruzomberok.
Underlying pro forma earnings per share
Underlying pro forma earnings per share have been calculated based on the
number of ordinary shares in issue on admission to the Johannesburg and London
stock exchanges on 3 July 2007. The potential dilutive impact of the share
schemes` awards coming into effect on or after 3 July 2007 will only be
assessed in the Group`s 2007 annual financial statements.
On a pro forma basis, underlying earnings per share were up 90% following the
improved operating result.
Interim dividend
A maiden interim dividend of 7.3 euro cents per share will be paid on 17
September 2007 to those shareholders on the register of Mondi plc on 31 August
2007.
An equivalent interim dividend will be paid in South African rand on 17
September 2007 to shareholders on the register of Mondi Limited on 31 August
2007. Holders of Mondi Limited Depositary Interests who hold their interests
through Lloyds TSB Registrars Corporate Nominee Limited will receive their
dividend in UK Sterling on 12 October 2007.
The Board intend that the final and interim dividends will be paid in
approximate proportions of two thirds (final) and one third (interim).
Cash flow and borrowings
Cash inflows from operations of EUR356 million were EUR127 million up on the
comparable period, benefiting from improved trading and tighter control of
working capital. Capital expenditure in the period of EUR139 million was EUR39
million lower than depreciation. Capital expenditure is expected to increase in
the second half as several capital projects are scheduled to take place, when a
number of the large paper mills take maintenance downtime during the second
half.
Mondi has now entered into new borrowing facilities and repaid the intercompany
debt owed to its former parent Anglo American plc. As at 30 June 2007, Mondi
had committed debt facilities of EUR2,648 million (at an average maturity of
3.7 years) of which EUR1,473 million was undrawn.
Current year outlook
In the second half we expect to see continued pressure from rising input costs
and weakness of the US dollar. However the positive trends in Mondi`s key
business segments are expected to continue and the Board is confident of
achieving good progress for the year as a whole.
INDEPENDENT REVIEW REPORT TO MONDI LIMITED
Introduction
We have been instructed by the company to review the financial information of
the Mondi Group for the six months ended 30 June 2007 which comprises a
combined condensed consolidated income statement, a combined condensed
consolidated balance sheet, a combined condensed consolidated cash flow
statement, a combined condensed consolidated statement of total recognised
income and expense and notes 1 to 16. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors` responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the basis
of preparation set out in Note 1, the JSE Listing Requirements and the
requirements of IAS 34 which require that the accounting policies and
presentation applied to the interim figures are consistent with those applied
in preparing the preceding audited financial information except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in
International Standards on Review Engagements 2410 - "Review of Interim
Financial Information performed by Independent Auditors of the Entity" issued
by the IASB. A review consists principally of making enquiries of group
management and applying analytical procedures to the financial information and
underlying financial data and, based thereon, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit performed in accordance with International Standards on
Auditing and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Deloitte & Touche
Per C Sagar
Partner
1 August 2007
Note: A review does not provide assurance on the maintenance and integrity of
the website, including controls used to achieve this, and in particular on
whether any changes may have occurred to the financial information since first
published. These matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
INDEPENDENT REVIEW REPORT TO MONDI PLC
Introduction
We have been instructed by the company to review the financial information of
the Mondi Group for the six months ended 30 June 2007 which comprises a
combined condensed consolidated income statement, a combined condensed
consolidated balance sheet, a combined condensed consolidated cash flow
statement, a combined condensed consolidated statement of total recognised
income and expense and notes 1 to 16. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
we have formed.
Directors` responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the basis
of preparation set out in Note 1, the Listing Rules of the Financial Services
Authority and the requirements of IAS 34 which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding audited financial information except
where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Deloitte & Touche LLP
Chartered Accountants
London
1 August 2007
Notes: A review does not provide assurance on the maintenance and integrity of
the website, including controls used to achieve this, and in particular on
whether any changes may have occurred to the financial information since first
published. These matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information differs from legislation in other jurisdictions.
Combined condensed consolidated income statement
For the six months ended 30 June 2007
Reviewed
Six months ended 30 June
2007
Before Special
special items
EUR million Note items (note 4)
Group revenue (3) 3,052 - 3,052
Materials, energy and
(1,577) - (1,577)
consumables used
Variable selling expenses (280) - (280)
Gross margin 1,195 - 1,195
Maintenance and other indirect
expenses (130) - (130)
Personnel costs (446) - (446)
Other net operating expenses (198) (8) (206)
Depreciation and amortisation (178) - (178)
Operating profit/(loss) from
subsidiaries and joint ventures (3) 243 (8) 235
Net profit/(loss) on disposals (4) - 84 84
Net income from associates (3) 2 - 2
Total profit/(loss) from
operations
and associates 245 76 321
Investment income 21 - 21
Interest expense (63) (29) (92)
Net finance costs (5) (42) (29) (71)
Profit/(loss) before tax 203 47 250
Taxation (charge)/credit (6) (61) 1 (60)
Profit/(loss) for the financial
period/year 142 48 190
Attributable to:
Minority interests 26 - 26
Shareholders of the parent
company 116 48 164
Pro forma earnings per share
(EPS) for profit attributable to
equity holders
Basic EPS (EUR cents) (7) 31.9
Headline EPS (EUR cents) (7) 17.3
Underlying EPS (EUR cents) (7) 22.6
Reviewed
Six months ended 30 June
2006
Before Special
special items
EUR million items (note 4)
Group revenue 2,857 - 2,857
Materials, energy and
(1,458) - (1,458)
consumables used
Variable selling expenses (278) - (278)
Gross margin 1,121 - 1,121
Maintenance and other indirect
expenses (134) - (134)
Personnel costs (447) - (447)
Other net operating expenses (197) (57) (254)
Depreciation and amortisation (177) - (177)
Operating profit/(loss) from
subsidiaries and joint ventures 166 (57) 109
Net profit/(loss) on disposals - (4) (4)
Net income from associates 4 - 4
Total profit/(loss) from operations
and associates 170 (61) 109
Investment income 35 - 35
Interest expense (80) - (80)
Net finance costs (45) - (45)
Profit/(loss) before tax 125 (61) 64
Taxation (charge)/credit (42) 14 (28)
Profit/(loss) for the financial
period/year 83 (47) 36
Attributable to:
Minority interests 22 - 22
Shareholders of the parent
company 61 (47) 14
Pro forma earnings per share
(EPS) for profit attributable to
equity holders
Basic EPS (EUR cents) 2.7
Headline EPS (EUR cents) 12.1
Underlying EPS (EUR cents) 11.9
Audited
Year ended 31 December
2006
Before Special
special items
EUR million items (note 4)
Group revenue 5,751 - 5,751
Materials, energy and
(2,960) - (2,960)
consumables used
Variable selling expenses (558) - (558)
Gross margin 2,233 - 2,233
Maintenance and other indirect
expenses (287) - (287)
Personnel costs (874) - (874)
Other net operating expenses (346) (78) (424)
Depreciation and amortisation (349) - (349)
Operating profit/(loss) from
subsidiaries and joint ventures 377 (78) 299
Net profit/(loss) on disposals - (4) (4)
Net income from associates 5 - 5
Total profit/(loss) from operations
and associates 382 (82) 300
Investment income 70 - 70
Interest expense (147) - (147)
Net finance costs (77) - (77)
Profit/(loss) before tax 305 (82) 223
Taxation (charge)/credit (115) 21 (94)
Profit/(loss) for the financial
period/year 190 (61) 129
Attributable to:
Minority interests 51 - 51
Shareholders of the parent
company 139 (61) 78
Pro forma earnings per share
(EPS) for profit attributable to
equity holders
Basic EPS (EUR cents) 15.2
Headline EPS (EUR cents) 28.2
Underlying EPS (EUR cents) 27.0
Combined condensed consolidated balance sheet
As at 30 June 2007
Reviewed Reviewed Audited
As at 30 As at 30 As at 31
June June December
EUR million Note 2007 2006 2006
Intangible assets 381 366 381
Property, plant and equipment 3,594 3,534 3,659
Forestry assets 220 215 221
Investments in associates 7 42 7
Financial asset investments 25 48 39
Deferred tax assets 40 35 35
Retirement benefit surplus 25 1 35
Total non-current assets 4,292 4,241 4,377
Inventories 710 657 656
Trade and other receivables 1,355 1,257 1,268
Current tax assets 33 19 34
Cash and cash equivalents (9) 176 421 415
Other current financial assets
(derivatives) 7 15 11
Total current assets 2,281 2,369 2,384
Assets held for sale 2 20 106
6,575 6,630 6,867
Total assets
Short-term borrowings (9) (311) (1,167) (1,238)
Trade and other payables (1,016) (961) (935)
Current tax liabilities (87) (24) (71)
Provisions (9) (3) (8)
Other current financial
liabilities (derivatives) (2) (3) (2)
Total current liabilities (1,425) (2,158) (2,254)
Medium and long-term borrowings (9) (1,200) (672) (656)
(212) (229) (220)
Retirement benefit obligations
Deferred tax liabilities (322) (309) (325)
Provisions (42) (50) (40)
Other non-current liabilities (15) (14) (16)
Total non-current liabilities (1,791) (1,274) (1,257)
Liabilities directly associated
with assets
classified as held for sale - - (39)
Total liabilities (3,216) (3,432) (3,550)
Net assets 3,359 3,198 3,317
Equity
Equity attributable to equity
holders 3,007 2,913 2,986
Minority interests 352 285 331
Total equity 3,359 3,198 3,317
Pro forma net asset value per
share (EUR per share) 6.53 6.22 6.45
Combined condensed consolidated cash flow statement
For the six months ended 30 June 2007
Reviewed Reviewed
Six months Six months Audited
ended 30 ended 30 Year ended
June June 31 December
EUR million Note 2007 2006 2006
Cash inflows from
operations 356 229 657
Dividends from associates 1 1 1
Dividends from financial
investments - - 1
Income tax paid (40) (34) (71)
Net cash inflows from
operating activities 317 196 588
Cash flows from
investing activities
Acquisition of
subsidiaries, net of
cash and cash equivalents (7) (68) (113)
Investment in associates - - (2)
Disposal of
subsidiaries, associates
and joint
ventures, net of cash
and cash equivalents 157 29 34
Purchases of property,
plant and equipment (10) (139) (209) (460)
Proceeds from the
disposal of property,
plant and equipment 4 9 16
Investment in forestry
assets (19) (26) (50)
Purchases of
financial/fixed asset
investments - (1) (1)
Purchase of intangible
assets (2) - (6)
Proceeds from the sale
of financial/fixed asset
investments - 1 3
Loan repayments from
related parties 11 14 9
Interest received 9 22 51
Other investing
activities (1) (7) (5)
Net cash generated
from/(used in) investing
activities 13 (236) (524)
Cash flows from
financing activities
Repayment of short-term
borrowings (889) (393) (355)
Proceeds from medium and
long-term borrowings 548 24 70
Interest paid (88) (77) (130)
Dividends paid to
minority interests (21) (29) (38)
Dividends paid to
Anglo American group
companies (202) (22) (75)
Proceeds from current
asset investments - (1) -
Increase in invested
capital 105 294 289
Other financing
activities 5 6 5
Net cash used in
financing activities (542) (198) (234)
Net decrease in cash and
cash equivalents (212) (238) (170)
Cash and cash
equivalents (1) at start
of period 358 574 574
Cash movements in the
period (212) (238) (170)
Reclassifications (3) - (3)
Effects of changes in
foreign exchange rates (7) (37) (43)
Cash and cash
Equivalents (1) at end of
period 136 299 358
Note:
1 Includes overdrafts and cash balances in disposal groups.
Combined consolidated statement of recognised income and expense
For the six months ended 30 June 2007
Audited
Reviewed Reviewed Year
Six months Six months ended 31
ended 30 ended 30 December
June June
EUR million 2007 2006 2006
(Loss)/gain on cash flow hedges (6) 12 8
Actuarial (losses)/gains on
post-retirement benefit schemes (8) 5 60
Related deferred tax credit/(charge) 3 (4) (21)
Exchange losses on translation of
foreign operations (35) (179) (137)
Other movements 2 (5) 3
Net expense recognised directly in
reserves (44) (171) (87)
Profit for the period 190 36 129
Total recognised income and expense
for the year 146 (135) 42
Attributable to:
Minority interests 32 10 65
Shareholders of the parent company 114 (145) (23)
Notes to the financial information
1 Basis of preparation
The combined condensed interim financial information for the six months ended
30 June 2007 presents the financial record of those businesses held by Mondi
Limited and Mondi plc at the date of Admission of their shares on the
Johannesburg Securities Exchange ("JSE") and the London Stock Exchange ("LSE")
respectively. The combined condensed interim financial information therefore
comprises an aggregation of amounts included in the financial statements of
Mondi entities and former Anglo American entities (together "the Group").
During the period and the prior periods presented, the Group did not form a
separate legal group and therefore it is not meaningful to show the share
capital or an analysis of reserves within the combined condensed interim
financial information, although the non-adjusting effects of the dual listing
are analysed as part of a review of post balance sheet events. Instead the
"Equity attributable to equity holders" is presented, which represents the
aggregated share capital, share premiums and reserves of the Group`s entities,
and debtor and creditor balances between Anglo American and the Group, which
are considered to be equity funding in nature. Any interest accruing on such
balances is classified as a "dividend in specie" and recorded separately
through reserves, not through the income statement.
The combined condensed interim financial statements for the six months ended 30
June 2007, which were approved by the Board on 1 August 2007, do not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985
of the United Kingdom. This interim financial information has been prepared in
accordance with IAS 34, `Interim Financial Reporting` and should be read in
conjunction with the financial information for the year ended 31 December 2006
included within Part VIII: "Financial information", of the Prospectus dated 1
June 2007.
2 Accounting policies
The same accounting policies, presentation and measurement principles have been
followed in the condensed set of interim financial statements as applied in the
Group`s audited financial information for the year ended 31 December 2006,
included within Part VIII: "Financial information", of the Prospectus dated 1
June 2007.
Notes to the financial information continued
3 Segmental information
Primary reporting format - by business segment
Primary segment disclosures for revenues are as follows:
Six months ended 30 June 2007
Inter-
Segment segment Group
EUR million revenue revenue revenue
Subsidiaries and joint
ventures
Mondi Packaging
Corrugated Business 768 (33) 735
Bag Business 634 (21) 613
Flexibles Business 384 (15) 369
Intra-group sales (50) 50 -
1,736 (19) 1,717
Mondi Business Paper 966 (86) 880
Mondi Packaging South
Africa 173 (17) 156
Merchant and Newsprint
businesses 286 (1) 285
Corporate and other
businesses 14 - 14
Elimination of inter-segment
revenue (123) 123 -
Total subsidiaries and joint
ventures 3,052 - 3,052
Associates
Mondi Packaging 8 - 8
Mondi Business Paper 25 - 25
Mondi Packaging South
Africa 3 - 3
Total associates 36 - 36
Total Group operations 3,088 - 3,088
Six months ended 30 June 2006
Inter-
segment Group Segment
EUR million revenue revenue revenue
Subsidiaries and joint
ventures
Mondi Packaging
Corrugated Business 731 (40) 691
Bag Business 561 (16) 545
Flexibles Business 304 (13) 291
Intra-group sales (46) 46 -
1,550 (23) 1,527
Mondi Business Paper 958 (75) 883
Mondi Packaging South
Africa 185 (13) 172
Merchant and Newsprint
businesses 260 - 260
Corporate and other
businesses 15 - 15
Elimination of inter-segment
revenue (111) 111 -
Total subsidiaries and joint
ventures 2,857 - 2,857
Associates
Mondi Packaging 102 - 102
Mondi Business Paper 21 - 21
Mondi Packaging South
Africa 1 - 1
Total associates 124 - 124
Total Group operations 2,981 - 2,981
Year ended 31 December 2006
Inter-
segment Segment Group
EUR million revenue revenue revenue
Subsidiaries and joint
ventures
Mondi Packaging
Corrugated Business 1,497 (86) 1,411
Bag Business 1,162 (31) 1,131
Flexibles Business 607 (28) 579
Intra-group sales (99) 99 -
3,167 (46) 3,121
Mondi Business Paper 1,889 (163) 1,726
