Mondi's underlying profit down

Johannesburg - Paper maker Mondi [JSE:MND] said on Thursday third-quarter operating profit fell 10% from the previous quarter to $223m, as part of a seasonal swing in European demand.

"Europe is always slower in the third quarter but we expect this to pick up in the fourth quarter," chief executive David Hathorn said after the company released an interim management statement.

"The business continued to benefit from its investments in energy related capital expenditure and lower European natural gas prices," Hathorn said.

Europe is a key market for Mondi, which is mainly involved in the manufacture of packaging paper.

The company has been struggling with lower prices for its paper products and lower global demand but has kept its head above water through acquisitions and increasing prices.

Hathorn said higher prices for its packaging paper will also help lift profits in the fourth quarter.