Feb 24, 2012. /Lesprom Network/. Mondi Group’s underlying operating profit of Euro 622 million was up 36% compared to 2010. The Group benefited from a generally positive trading environment, although a noticeable slowdown in demand in the second half led to some volume and pricing pressures when compared to the strong first half of the year, as the company said in a press release received by Lesprom Network. The Europe & International Division, through its Uncoated Fine Paper, Corrugated and Bags & Coatings businesses contributed Euro 611 million to underlying operating profit and the South Africa Division Euro 62 million. The Newsprint operating loss of Euro 18 million was disappointing, whilst corporate costs were at similar levels to previous years. Input costs, particularly wood, pulp and recycled fibre, increased by approximately 7% compared to the prior year. This was mainly attributed to market price increases, offset in part by currency gains and lower volumes, although some softening in key fibre input costs was seen in the second half of the year. Net finance charges of Euro 111 million were Euro 5 million higher than those of the prior year reflecting the lower average net debt, more than offset by lower net foreign exchange gains and reduced capitalisation of finance charges following the completion of the Syktyvkar modernisation project. The tax charge, before special items, for the year was Euro 102 million, representing an effective tax rate before special items of 20% compared to 25% in 2010. Capital expenditure of Euro 263 million was Euro 131 million lower than the prior year, reflecting the reduction in spend following completion of the major capital investment in Russia. Excluding major expansionary capital investments, the capital expenditure to depreciation ratio was 63%, unchanged from 2010. David Hathorn, Mondi Group CEO, said: “The Group’s focus on performance, low-cost operating model, and robust financial position, enabled Mondi to deliver record results in 2011. This was against a backdrop of a strong trading environment in the first half followed by a more difficult second half as macroeconomic uncertainties weighed on our markets. Our strong cash flow generation through the cycle enables us to ensure our asset base remains appropriately invested and exploit value adding growth opportunities, whilst maintaining our investment grade credit ratings and increasing returns to shareholders. In this regard, we have approved investments in certain high return energy and de-bottlenecking projects and launched a tender offer for the non-controlling interest in Mondi Świecie. Furthermore, the directors have recommended a final dividend of 17.75 Euro cents per share, bringing the total dividend to 26.0 Euro cents per share for the year, an increase of 30% on the prior year. Looking ahead, while macroeconomic risks remain, it is encouraging to note that in recent weeks order books have improved and prices have stabilised, with price increases announced in certain grades. This should allow some recovery of price declines experienced over the course of the second half of 2011, although recent strengthening of emerging market currencies is impacting margins. Supply side fundamentals in our core grades remain good following further announcements of capacity closures in the industry.” Mondi is an international paper and packaging Group, with production operations across 28 countries. The Group's key operations are located in central Europe, Russia and South Africa. Mondi is fully integrated across the paper and packaging process, from the growing of wood and the manufacture of pulp and paper (including recycled paper), to the conversion of packaging papers into corrugated packaging, industrial bags and coatings.