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 The Sharenet Daily 
Tuesday, 26 February 2013 - 20:00
Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

Mondi Ltd - What is the future of paper?

History and Structure

Mondi is an international packaging and paper Group, listed on both the Johannesburg and London stock exchanges. The company employs more than 26,000 workers and runs production operations across 29 countries, with key interests in South Africa, central Europe, Russia and other emerging markets. The company is truly integrated across the production chain, from forestry right through to the manufacture of pulp, paper, corrugated packaging, industrial bags and newsprint.

Mondi started off as a division of Anglo American when the Merebank Mill was built in 1967. After expanding throughout South Africa, the company set its sights on Europe in the early 1990’s and started a long process of expansion through acquisition. From 2004 to 2007 the global paper and packaging industry suffered from production overcapacity and slow demand growth, and Anglo decided to unbundle Mondi, which listed separately in July 2007. Given its tough operating environment, the company decided to streamline its structure once again for the sake of cost control.

Source: www.mondigroup.com

Financial Results

Mondi has recently released their results for the year ended 31 December 2012, and has managed to recover admirably from a disappointing first quarter. The company has reported improved volumes and pricing after Q1, as well as strong cash generation from operations of €845 million.

The group achieved a ROCE (Return on Capital Employed) of 13.7%, which exceeded the Group’s through-the-cycle target of 13%, but fell short of the 15% ROCE achieved in 2011. Earnings per share dropped 3% from 71.8 € cents in 2011 to 69.6 cents in 2012, but management were able to raise the total dividend for the year by 8% from 26 € cents in 2011 to 28 cents in 2012.

Group revenue increased by 1.2% to € 5,807 million, while underlying EBITDA (Earnings before interest, taxes, depreciation and amortization) decreased from 16.8% to 15.9%, and under-lying operating profit decreased from 10.8% to 9.8%. When analysing the development of underlying profit from 2011 to 2012, it is clear that management’s cost reduction, volume improvements and acquisitions and disposals has contributed positively. The sole detractor from operating profit was net negative price variances.

Source: www.mondigroup.com

Capital Allocation

Mondi has spent €1.2 billion on acquisitions as part of their initiative to increase exposure to the higher growth packaging segments of the market. As a result, the capital employed in packaging businesses has risen from 57% to 67% of the Group’s total. The company is also very well positioned to take advantage of growth in emerging markets, with 50% of turnover already originating from those regions. Capital expenditure has dropped off from € 700 million in 2008 to € 307 million for 2012, with two major projects announced this year: the €128 million Ružomberok recovery boiler and the €70 million Štěti paper machine. Management expects excellent results in terms of IRR (internal rate of return) from both projects.

Source: www.mondigroup.com

Current Valuation and Future Prospects

Mondi currently trades at a PE ratio of 17.29 and a dividend yield of 2.73%, and the share price has climbed 58% over the past 6 months. The company’s only rival in the local paper industry, Sappi, trades at a PE ratio of 34.05 and has not declared a dividend since late 2008. Sappi has struggled to remain profitable over the last years, but still remains a highly cash generative business. Both these companies benefit from the fact that the paper industry is very capital intensive and produce high barriers to entry, and also offers investors an effective rand hedge.

Mondi’s future prospects hinges on its ability to shift its operations towards more profitable segments of the market, and to maintain its recent run of value adding acquisitions.

Kind regards,

Cor Van Deventer

Sources: www.mondigroup.com

021 914 4966

Tue, 26 Feb 2013
Top News
South African stocks ended a touch lower on Tuesday, tracking major overseas markets on fears political gridlock in Italy could reignite the euro zone debt crisis.  Full story

South Africa's labour court has ruled to prevent a planned strike at Kumba Iron Ore's Kolomela mine, the company said on Tuesday.  Full story
Italy's stunned political parties looked for a way forward on Tuesday after an election that gave none of them a parliamentary majority, posing the threat of prolonged instability and European financial crisis.  Full story
A rocket fired from Gaza exploded in Israel on Tuesday, the first such attack since a November truce, and a militant group said it launched the strike to retaliate for the death of a Palestinian in an Israeli jail.  Full story
Pope Benedict was praying and packing on Tuesday two days before his move out of the Vatican and into retirement where he will assume the title of "pope emeritus" and still be referred to as "your holiness".  Full story
Euro zone shares sank to three-month lows on Tuesday after an Italian election stalemate renewed concerns about the future of the euro zone. . .  Full story
U.S. stocks mostly rose on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus before Congress, but warned forced spending cuts. . .  Full story
The euro dropped against the dollar on Tuesday and was seen susceptible to further selling as political gridlock in Italy caused the government's. . .  Full story
Weak banks and commodity stocks sent Britain's top shares to a more than two-week closing low on Tuesday after an inconclusive election result. . .  Full story

Uncertainty generated by Italy's elections rattled global stock indexes and European bond markets for a second day on Tuesday, though testimony by Federal Reserve. . .  Full story
Gold rose decisively above $1,610 per ounce on Tuesday after testimony from Federal Reserve chief Ben Bernanke defended its bond-buying programme, easing market concern. . .  Full story
Major U.S. stock indexes hit session highs on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus before Congress and. . .  Full story
U.S. stocks rose on Tuesday, rebounding from the previous session's steep drop over Italian election results as investors bought beaten-down shares.. . .  Full story
SA Business
South African diversified miner African Rainbow Minerals (ARM) said it is scouting for platinum acquisitions now that the precious metal is. . .  Full story
South Africa's quarterly economic growth quickened more than expected to 2.1 percent in the closing months of 2012, boosted by the. . .  Full story
South Africa's Sibanye Gold said on Tuesday production has partially resumed at its Beatrix 4 shaft in areas that were unaffected. . .  Full story
The rand held near a one-week high and above a key resistance point in early Tuesday trade and looked likely to. . .  Full story

South African chemicals and explosives maker AECI posted a 24 percent fall in annual earnings on Tuesday, snapping three straight years of growth as slack demand from strike-hit mining firms weighed.. . .  Full story
Company News
Grindrod shareholders are advised that the final results for the twelve months ended 31 December 2012, are expected to be released. . .  Full story
Shareholders are advised that the Group expects to release reviewed earnings per share and headline earnings per share for the six. . .  Full story
As announced on 3 September 2012 and again on 30 November 2012, shareholders of the company approved a specific repurchase of. . .  Full story
Shareholders are referred to the announcements released on SENS on 31 July 2012, 3 September 2012, 5 October 2012, 8 November. . .  Full story

Shareholders are referred to the cautionary announcement dated 11 February 2013 and are advised that as negotiations have been terminated, caution is no longer required to be exercised by shareholders when dealing in the company's securities.. . .  Full story
South Ocean's headline earnings per share for the 12 months ended 31st December 2012 is expected to be between 20% to 30% higher than for the corresponding prior year and earnings per share is expected to be between 100 cents to. . .  Full story
Company Results
Revenue for the year fell to R6.5 billion (R6.9 billion) whilst gross profit jumped to R646.9 million (R507.3 million). Operating profit. . .  Full story
Revenue increased to R410.2 million (R302.8 million). Gross profit rose to R86.6 million (R52.9 million), while operating profit grew to R43.5. . .  Full story
Revenue improved by 43.4% to R12 billion (R8.4 billion) and operating profit grew to R550.7 million (R480.8 million). Profit attributable to. . .  Full story
Revenue for the interim period shot up to R112.9 million (R70.2 million) and operating profit was higher at R70.2 million (R27.0. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0039568.28-218.00-0.55%
JSE Top 4017:0035143.65-215.00-0.61%
JSE Gold17:001944.171.000.06%
JSE Financial17:0029921.40-196.00-0.65%
JSE Industrial17:0048233.97-122.00-0.25%
JSE Indust 2517:0041601.73-110.00-0.26%
JSE Resource17:0049924.13-514.00-1.02%
DJ Futures19:2813838.0057.000.41%
DJ Ind19:5813880.6596.480.70%
SP 50019:581492.935.080.34%
FTSE 10018:356270.44-84.93-1.34%
All Ords07:445021.80-50.90-1.00%
NZSE 5006:484238.9212.480.30%
NameTimeRPMove% Move
Gold $19:591614.3521.141.33%
Gold R19:5914272.61200.101.42%
Gold R/kg19:5845916879691.77%
Silver $19:5929.3400.42001.45%
Platinum $19:581610.757.250.45%
Palladium $19:59739.008.701.19%
Brent Crude19:58113.09-1.01-0.89%
Rand / Dollar19:598.84410.00880.10%
Rand / Pound19:5513.37070.00120.01%
Rand / Euro19:5511.54540.00440.04%
Rand / NZD19:597.3025-0.0609-0.83%
Rand / AUD19:559.0498-0.0310-0.34%
Yen / Dollar19:5991.7220-0.4560-0.49%
Euro / Dollar19:590.76620.76620.00%
Dollar / Euro19:591.3053-0.0010-0.08%
Pound / Dollar19:550.66010.00080.12%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 ALERT  1783827.14.%3630
2 TORRE  115109.52.%393419
3 BRIMSTON  14001058.11.%120
4 SEPHAKU  485357.78.%169695
5 AECI  94054565.10.%471922
6 AMECOR  214104.90.%100
7 CULLINAN  13553.85.%22000
8 TRUSTCO  10943.81.%21000
9 BELL  2600752.97.%3350
10 IMPERIAL  202995642.86.%1750267
11 CIPLAMED  967252.65.%331449
12 ONELOGIX  22852.24.%238534
13 SOVFOOD  460102.22.%6000
14 ROLFES  614132.16.%46114
15 CADIZ  14332.14.%702494
16 ARROW-A  770151.99.%85090
17 GROUP-5  3460601.76.%85601
18 PIKWIK  1890301.61.%2335867
19 PSG  6164901.48.%39529
20 TRNPACO  1715251.48.%1930

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Major Moves Down
SharenameSaleMove% MoveVolume
1 S-OCEAN  140-15-9.68.%243978
2 KELLY  190-19-9.09.%180300
3 DCENTRIX  327-30-8.40.%32281
4 TRANSCAP  720-58-7.46.%552618
5 EASTPLATS  168-12-6.67.%301549
6 COAL  234-14-5.65.%1014419
7 KEATON   190-10-5.00.%8800
8 JUBILEE  135-7-4.93.%194600
9 TASTE  390-20-4.88.%83569
10 DAWN  705-35-4.73.%19380
11 VIVIDEND  525-25-4.55.%233727
12 CBH  370-15-3.90.%77118
13 LONAFRIC  125-5-3.85.%8617
14 YORK  400-15-3.61.%4970
15 PALLINGHT  217-7-3.13.%124950
16 MIXTEL  340-10-2.86.%25483
17 HOSP-A  1700-50-2.86.%6129
18 RBPLAT  5569-155-2.71.%15267
19 ALTECH  3600-100-2.70.%8418
20 BIDVEST  23920-657-2.67.%1881614

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New Highs
SharenameSaleHighMove% MoveVolume
1 CULLINAN  13513553.85.%22000
2 CIPLAMED  967967252.65.%331449
3 ONELOGIX  22822852.24.%238534
4 ARROW-A  770770151.99.%85090
5 GROUP-5  34603632601.76.%85601
6 DISCOVERY  70707115600.86.%1061509
7 CONDUIT  15015510.67.%496298

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New Lows
SharenameSaleLowMove% MoveVolume
1 DCENTRIX  327325-30-8.40.%32281
2 EQSTRA  583546-16-2.67.%800170

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Index Summary
Index NameRPMove% Move
Top 4035,143.00-215.00-0.61%
Mid Cap54,485.00-139.00-0.25%
Small Cap42,638.00-149.00-0.35%
Resource 2049,924.00-514.00-1.02%
Industrial 2541,601.00-110.00-0.26%
Financial 1511,233.00-78.00-0.69%
Financial & Ind. 3045,348.00-178.00-0.39%
All Share39,568.00-218.00-0.55%
Oil & Gas 29,331.00-291.00-0.98%
Mining 31,728.00-321.00-1.00%
Gold Mining1,944.001.000.06%
Platinum Mining52.00.000.31%
GENERAL MINING8,569.00-121.00-1.40%
Oil & Gas Producers 15,770.00-157.00-0.99%
Basic Materials 27,596.00-259.00-0.93%
Chemicals 18,397.00456.002.54%
Forestry & Paper 19,973.00-365.00-1.80%
Industrial Metals 29,168.0073.000.25%
Industrials 39,726.00-132.00-0.33%
General Industrials 115.00-1.00-0.86%
Consumer Goods 43,493.00-43.00-0.10%
Automobiles & Parts 7,391.00-12.00-0.17%
Household Goods178.00-3-2.15%
Health Care 54,837.00-233.00-0.42%
Index NameRPMove% Move
Food Producers 68,566.00-473.00-0.69%
Personal Goods 698.00-6.00-0.99%
Consumer Services 81,361.00-323.00-0.40%
General Retailers 63,096.00-107.00-0.17%
Travel & Leisure 5,157.00-64.00-1.23%
Support Services 2,348.00-4.00-0.20%
Telecommunications 84,453.00-254.00-0.30%
Financials 29,921.00-196.00-0.65%
Banks 52,793.00-486.00-0.91%
Non-life Insurance 46,578.00-315.00-0.67%
Life Insurance 26,813.00-186.00-0.69%
General Financial 2,765.00-32.00-1.15%
Technology 34,649.00-235.00-0.67%
SHARIAH TOP40 3,393.00-33-0.99%
FTSE/JSE SHARIAH ALL3,513.00-30-0.87%
COAL MINING22,087.00-62-0.28%
FTSE JSE Fledgling 5,864.00-32-0.56%
FTSE/JSE Alt X 860.00-8-0.99%
RESOURCE 27,438.00-277-1.00%
DIVIDEND PLUS215.000-0.12%
FTSE/JSE RAFI 408,102.00-56-0.70%
Capped Top 4018,544.00-112-0.60%
Capped All Share20,022.00-109-0.54%
JSE TABACO 5,896.00420.73%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
27/02/2013DIGICOREDecember 2012 (Interim)
27/02/2013GPL-PREFDecember 2012 (Interim)
27/02/2013GRANPRADEDecember 2012 (Interim)
27/02/2013GRINDRODDecember 2012 (Final)
27/02/2013GRINDROD PREFDecember 2012 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
VPIF25/02/201314/03/201325/03/2013R 0.3800
WBHO25/02/201312/04/201322/04/2013R 1.3500
DISTELL25/02/201314/03/201325/03/2013R 1.5200
NEDBANK-P25/02/201314/03/201325/03/2013R 0.3583
ROLFES25/02/201314/03/201325/03/2013R 0.0500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ZURICH SA06/02/201322/02/201304/03/2013R 2.0000
RESILIENT06/02/201322/02/201304/03/2013R 1.3493
ASCEN A08/02/201322/02/201304/03/2013R 0.0317
ASCEN B08/02/201322/02/201304/03/2013R 0.0143

Upcoming AGMs**
CodeCompany NameDateStatus
SKJPSekunjalo Investments Ltd.26/02/2013Confirmed
SKBPSekunjalo Investments Ltd.26/02/2013Confirmed
SKJASekunjalo Investments Ltd.26/02/2013Confirmed
SKJSekunjalo Investments Ltd.26/02/2013Confirmed
MSAM-S Holdings Ltd.27/02/2013Confirmed

Stock Exchange News Service
26/02/201317:50PICK N PAY HOLDINGS LIMITED - Disclosure: Acquisition of securities in Pick N Pa...
26/02/201317:50DELTA PROPERTY FUND LIMITED - Dealing in securities by a director and an associa...
26/02/201317:47LITHA HEALTHCARE GROUP LIMITED - Announcement Including An Update In Respect Of ...
26/02/201317:45 GROUP LIMITED - Results Of The Annual General Meeting
26/02/201317:10N LIMITED - Disclosure of beneficial interest in Securities
26/02/201317:06M & S HOLDINGS LIMITED - Dealing in securities by an associate of a director
26/02/201317:01KU HOLDINGS LIMITED - Notification of Share Dealing by Directors of Sephaku Hold...
26/02/201316:39GRINDROD LIMITED - Final Results
26/02/201316:30RTHS INTERNATIONAL LIMITED - Dealing in Securities by a Director
26/02/201316:05BEIGE HOLDINGS LIMITED - Unaudited Consolidated Results and Renewal of Cautionar...
26/02/201316:00COUNTRY BIRD HOLDINGS LIMITED - Unaudited Interim Results for the period ended 3...
26/02/201315:55ACCENTUATE LIMITED - Trading Statement
26/02/201315:47THE STANDARD BANK OF SA LTD - Interest Rate announcement - BISTDB - CLN244, CLN2...
26/02/201315:45 LIMITED - Dealing in securities by directors of listed companies
26/02/201315:43STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank of South Africa Limit...
26/02/201315:13THE STANDARD BANK OF SA LTD - Interest rate announcement - BISTDB
26/02/201315:00THE FOSCHINI GROUP LIMITED - Implementation of share repurchase agreement
26/02/201315:00SANTOVA LIMITED - Resigantion of director
26/02/201314:55THE STANDARD BANK OF SA LTD - Interest rate announcement - BISTDB - CLN123
26/02/201314:06THE STANDARD BANK OF SA LTD - Interest rate announcement - BISTDB - CLN135, CLN1...
26/02/201313:58DISTELL GROUP LIMITED - Appointment Of Director
26/02/201313:13GOLD FIELDS LIMITED - Dealing in securities by director of a major subsidiary
26/02/201313:10PIONEER FOOD GROUP LIMITED - Dealing In Companys Shares By Directors
26/02/201313:07SABVEST LIMITED - Audited Condensed Results For The Year Ended 31 December 2012 ...
26/02/201313:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - Commercial Paper Issuance - TWC004
26/02/201313:00MONDI PLC - Dealings by a director of Mondi Limited and Mondi plc
26/02/201312:59WESCOAL HOLDINGS LIMITED - Further update on the Vlaklaagte and Elandspruit Tran...
26/02/201312:45ILIAD AFRICA LIMITED - Appointment of an independent non-executive director
26/02/201312:45FIRSTRAND BANK LIMITED - Interest Rate Reset - FRC11
26/02/201311:45A E C I LIMITED - Announcement: Results Presentation
26/02/201311:35INGUZA INVESTMENTS (PTY) LIMITED - Full Capital redemption - ING173 ING176
26/02/201311:30PREMIUM PROPERTIES LIMITED - Dealing in securities by an associate of directors
26/02/201311:00INDWA INVESTMENTS LIMITED - New Instrument Listing - IND322
26/02/201310:50 INVESTMENTS LIMITED - Listing of Tap Issue - IVA322
26/02/201310:45IVUZI INVESTMENTS LIMITED - Full Capital Redemption - IVA309
26/02/201310:40NAMPAK LIMITED - Dealings In Securities By A Director, The Company Secretary And...
26/02/201310:30TREMATON CAPITAL INVESTMENTS LTD - Acquisition of 50% interest in Hibernian Towe...
26/02/201310:17A RESOURCES NL - Appendix 3B and Section 708 Notice
26/02/201310:14CURRO HOLDINGS LIMITED - Dealing In Curro Holdings Limited Shares
26/02/201309:56CONVERGENET HOLDINGS LIMITED - Appointment of company secretary
26/02/201309:25SIBANYE GOLD LIMITED - Update on Beatrix 4 Shaft - Partial Production Resumes
26/02/201309:16STRATCORP LIMITED - Withdrawal of cautionary announcement
26/02/201309:14GROUP LIMITED - Renewal of Cautionary Announcement
26/02/201309:00URANIUM ONE INC - Circular Dated 08 February 2013: Form of Surrender
26/02/201307:55LONRHO PLC - TR-1: Notification of Major Interest in Shares
26/02/201307:15FIRESTONE ENERGY LIMITED - Firestone reiterates take no action following extensi...
26/02/201307:05SOUTH OCEAN HOLDINGS LIMITED - Trading Statement
26/02/201307:05AFRICAN RAINBOW MINERALS LIMITED - Interim results for the six months ended 31 D...
26/02/201307:05BHP BILLITON PLC - Change of Director's Interests Notice - P Davies
26/02/201307:05A E C I LIMITED - Reviewed Condensed Consolidated Financial Results and Final Ca...
26/02/201307:05ONELOGIX GROUP LIMITED - Unaudited Condensed Consolidated Interim Results for th...

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