Peter Oswald MM CEOPeter Oswald MM CEO

Vienna, Austria — The fourth quarter of MM Group presented a mixed performance, with a modest volume growth in the MM Board & Paper division being offset by a decrease in the MM Packaging division, the ATX company said Tuesday.

This period continued to be challenged by ongoing pressures on prices and margins.

Consolidated sales amounted to €967.9 million, a decrease from €1,231.7 million in the same quarter of the previous year, influenced by both volume and price factors.

Peter Oswald, MM CEO, comments:

“After the record result of the previous year, the MM Group faced a significantly lower demand in the paper and cartonboard industry as well as increasing price pressure in 2023. In addition to destocking in the supply chain, inflation-related changes in consumer behaviour which led to lower consumption of everyday goods and the overall economic slowdown in our European main markets were the main causes.”

Adjusted operating profit for the Group saw a significant decline, primarily due to price-related factors, landing at €38.8 million compared to €109.1 million in the fourth quarter of 2022. This resulted in an operating margin of 4.0%, a stark contrast to the 8.9% seen in the same period last year.

Profit before tax stood at €17.8 million, down from €50.2 million in the fourth quarter of 2022. The period saw a loss of €2.1 million, in comparison to a profit of €30.0 million in the previous year. The annual profit before tax was reported at €136.7 million, a notable decrease from €467.0 million in the preceding year. The income tax expense for the year was €47.6 million (2022: €121.7 million), leading to an effective Group tax rate of 34.8% (2022: 26.1%).

In the competitive European cartonboard and paper sector, MM Board & Paper is currently experiencing positive volume trends, though it continues to face margin pressures. The completion of destocking in the supply chain has been achieved, but only a gradual market recovery is anticipated, due to Europe’s weak economic conditions and continued restrained consumer spending. Additionally, challenging global market conditions are expected to persist, leading to continued oversupply and subdued capacity utilization within Europe.

By Lisa Luckas

Lisa Luckas is a Sr. Business News Editor at Nobot.News.

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