Smurfit Kappa reports 20% increase in quarterly operating profits

Smurfit Kappa reports 20% increase in quarterly operating profits

Packaging firm Smurfit Kappa Group (SKG) has reported a 20% annual rise in operating profits for the first quarter 2012.

Operating profit for the three months to end March were €177m, compared to €147m for the same period 2011.

Revenues of €1.823bn represented a year-on-year rise of 1% for the quarter, while the company reported "strong" EBIDTA of €246m despite what it called "significant cost pressures" during the quarter.

The company said it expected full-year EBITDA performance to be broadly similar to that achieved in 2011.

Analysts said SKG's Q1 results were well ahead of forecasts, with Davy Research commenting that reported EBITDA was 9% ahead of their forecast of €226m and the consensus of €222m.

“We are pleased to report a relatively strong EBITDA of €246 million for the first quarter," CEO Gary McGann said.

"Despite significant increases in input costs and downward pressure on box prices in the period, our EBITDA margin of 13.5% reflects the efficiency of our integrated system in Europe.

"Our Latin American businesses also continued to perform well, contributing to 23% of the

Group’s overall EBITDA in the quarter."

Basic earnings per share (EPS) are up 74% to 27.1 cent compared to last year, while the company has reduced net debt by €289m over the past 12 months.

McGann said the company's strong full-year performance expectation "is underpinned by our leadership position in packaging innovation and sustainability, our efficient integrated operating system, and our continued financial discipline at all levels of the company.”

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