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Smurfit Kappa reports higher revenues, profits down in 2013

Packaging group Smurfit Kappa has reported a full year pre-tax profit of €294m, a drop of 8pc.

But revenues were up 8pc to just under €8bn as the company warned of a significant currency impact on its balance sheet if Venezuela's Bolivar Fuerte currency was devalued against the US dollar.

"During 2013 the Group has completed its main financial restructuring activity moving from being a leveraged company to achieving a corporate credit profile," chief executive Gary McGann said.

Fourth quarter profit increased to €62m while the company's European corrugated packaging operations showed good growth in 2013.

Smurfit Kappa said it will pay a dividend of €30.75 for 2013, up by 50pc on 2012“ reflecting confidence in the business”.

Box volumes were up 2pc year-on-year with increases expected in the near future.

"The good volume result was achieved despite low macroeconomic growth and reflects organic growth with our customers and specific market share wins," Mr McGann said in a statement.

"However, in spite of increasing testliner pricing, margins have still not adequately recovered due to consistently higher input costs. Recent weakness in kraftliner pricing has abated and the strong recycled market should provide upward pricing pressure in the grade," McGann said.

The Americas remain an important part of Smurfit's growth strategy but there are concerns.

"Should the Group conclude that the Sicad rate is the most appropriate rate the effect would be to record a reduction in its net assets and cash balances during 2014.

"Based on the Group's balance sheet as at 31 December 2013, and using the most recent Sicad rate (VEF 11.36 per US dollar), the Group would record a reduction in its net assets of approximately €181m in relation to these operations and a reduction in its cash balances of €76m."

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