Mondi tumbles on weaker quarterly trading as market conditions remain tough

Mondi PLC shares fell 14.1% after reporting a weaker Q3 2025, with underlying EBITDA dropping to €223 million (including €20m forestry gains) from €274 million in Q2, driven by subdued demand and declining selling prices across its packaging and paper grades. The company anticipates challenging trading conditions to persist through year-end, focusing on operational efficiency, cost control, and cash generation to mitigate headwinds.

Analysis

Mondi tumbles on weaker quarterly trading as market conditions remain tough Published: 08:30 06 Oct 2025 BST Mondi PLC (LSE:MNDI) shares were the biggest fallers on the FTSE 100 on Monday morning after the paper and packaging maker reported a fall in profits in the third quarter of 2025, with trading expected to remain challenging. Underlying EBITDA of €223 million was reported for the quarter, including €20 million of forestry fair value gains, compared to €274 million in the second quarter and €290 milllion in the first. Volumes were affected by subdued demand, while selling prices declined across most grades, with maintenance shutdowns extended to manage production in softer markets. Performance was weaker than the second quarter in both corrugated and flexible packaging, while uncoated fine paper was significantly impacted by lower demand and prices. Mondi said it expects trading conditions to stay difficult through year-end but highlighted its focus on operational efficiency, cost control and cash generation. Chief executive Andrew King said: “Trading conditions in the third quarter were challenging, with softer volumes and declining prices across most pulp and paper grades.” He added that the group remains focused on margin management and cost optimisation to navigate current headwinds. The company has completed its major expansion projects and is now prioritising productivity ramp-up and cash generation. Mondi shares fell 14.1% to 899p in early trading. Mondi PLC's shares saw a significant 14.1% decline to 899p after its Q3 2025 trading update revealed a sharp deterioration in market conditions. The company reported a sequential drop in underlying EBITDA to €223 million, down from €274 million in Q2 and €290 million in Q1, signaling an accelerating downturn. This decline was driven by a dual headwind of subdued demand volumes and falling selling prices across most paper and packaging grades, with uncoated fine paper being particularly impacted. In response to the softer market, management has extended maintenance shutdowns to manage production levels, a clear indicator of weak demand. The company's forward-looking guidance offers no immediate relief, explicitly stating that trading conditions are expected to remain difficult through year-end. While major expansion projects are now complete, the strategic focus has pivoted defensively toward operational efficiency and cash generation to navigate the challenging environment.

Key Decisions for Investors

• Given the accelerating sequential decline in EBITDA and the pessimistic outlook for the remainder of the year, investors should be cautious as near-term catalysts for a share price recovery appear absent.
• Contrarian investors looking for an entry point should note that management guidance suggests the downcycle may not have bottomed, making it critical to monitor for stabilization in paper pricing and demand before committing capital.
• Focus should be placed on the company's execution of its cost control and cash generation strategy, as successful margin preservation will be the key determinant of performance until broader market conditions improve.