Mondi reported a 70% decline in underlying pre-tax profit for the first half of 2026 as weaker packaging demand, higher operating costs and significant asset impairment charges weighed on financial performance.

The paper and packaging group also booked €320 million in special charges, with the largest impairment relating to its Duino recycled containerboard mill in Italy.

Underlying Profit Declines

For the six months ended 30 June 2026, Mondi reported:

• Underlying pre-tax profit: €80 million, down from €272 million a year earlier
• EBITDA margin: 9.5%, compared with 14.4% in the first half of 2025

The results reflect continued pressure across the global packaging sector, where manufacturers have been navigating slower market demand alongside rising production costs.

Middle East Disruptions Increase Cost Pressure

Mondi said profitability was affected by disruptions linked to the Middle East conflict, which continued to influence logistics and supply chains during the reporting period.

The company also cited several additional challenges, including:

• Weak demand across key packaging markets
• Higher energy costs
• Rising raw material prices
• Increased shipping expenses

These factors compressed margins despite ongoing efforts to improve operational efficiency.

Duino Mill Records Largest Impairment

The most significant special charge was a €206 million impairment at Mondi’s Duino recycled containerboard mill in Italy.

According to the company, expected returns from the facility have been reduced by:

• European containerboard overcapacity
• Trade barriers affecting export markets
• Higher energy costs
• A weaker margin environment

Although the impairment reflects revised financial expectations, Mondi has previously stated that the mill’s operational ramp-up continues according to plan.

Containerboard Market Remains Challenging

The impairment highlights the difficult conditions facing European recycled containerboard producers.

Following major investment across the industry in recent years, producers continue to contend with:

• Slower-than-expected demand recovery
• Additional production capacity entering the market
• Higher manufacturing costs
• Volatile international trade conditions

These market dynamics have reduced profitability across parts of the paper and packaging sector.

Outlook Focuses on Recovery

Despite a challenging first half, Mondi continues to monitor improving order activity in parts of its packaging business while managing ongoing cost pressures.

The company remains focused on optimizing operations and completing strategic investment projects as market conditions gradually stabilize.

For the global paper and packaging industry, Mondi’s latest results underscore the continued impact of weaker demand, elevated energy prices and geopolitical uncertainty on operating margins, even as long-term demand for sustainable packaging remains positive.

Last Updated on 04/08/2026 by Jota Machinery