Sunday 25 August 2019

Smurfit Kappa shares gain despite 9pc profits drop in latest quarter

CEO Tony Smurfit
CEO Tony Smurfit
Donal O'Donovan

Donal O'Donovan

Shares in Smurfit Kappa were up 3.39pc yesterday after well received financial results for the first nine months of the year.

Revenue was up 4pc to €2.1bn during the period, boosted by wider economic growth in core markets including Western Europe.

However, higher input costs hit profits, which fell 9pc year-on-year to €170m in the three months to September 30.

Cardboard box maker Smurfit Kappa said that it would continue to offset cost pressures through further corrugated price recovery and efficiencies and left its full-year forecasts unchanged.

During the third quarter, Smurfit Kappa acquired a corrugated plant outside Moscow, its first in Russia outside St Petersburg and making the business the largest international corrugated packaging producer in the country.

The Moscow site includes capacity to double the size of the new plant, CEO Tony Smurfit told the Irish Independent.

Smurfit Kappa also agreed to buy a box business in Greece in the period, and is eyeing further acquisitions, including in the UK, he said.

The UK will remain an important market regardless of Brexit, Mr Smurfit said, but added that all businesses, including his own, are looking for greater certainty about future trade conditions and want to avoid a so-called hard Brexit.

"Anything that hurts the ability to trade is bad for business," he said.

As well as expanding by geography, the business is also pushing into higher value areas - including eSmart, a packaging services brand aimed at online retailers that provides logistics, packaging and customer experience.

The new service is already available to customers in all of the markets where Smurfit Kappa operates, Mr Smurfit said.

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