Smurfit Kappa targets debt reduction

PAPER and packaging giant, Smurfit Kappa Group (SKG) is set to focus further on debt reduction after knocking nearly €50m off its net debt during the first quarter of the year.

The Dublin-headquartered group’s first quarter results, published yesterday, saw it record a €78m pre-tax profit for the first three months of 2011; a turnaround from a marginal loss of €3m for the same period in 2009. Group revenue for the quarter was up by 3% — on a year-on-year basis — to just over €1.8 billion. Operating profit, before exceptional items, was up by 5% year-on-year and 69% quarter-by-quarter, at €148m, while pre-exceptional EBITDA (earnings before interest, tax, depreciation and amortisation) rose by 32% on the preceding quarter (but slipped by 5% on an annualised basis) to €243m. The group’s net debt now stands at €3.06bn; €49m having been repaid during the quarter in a far better than expected paydown. Basic earnings per share, however, came in at 15.6c, up on a 7c loss for the last three months of 2010, but down by as much as 48% on an annualised basis.

On a quarter-by-quarter basis, SKG’s revenues were up by 18% — €54m higher in the first quarter of this year than in the final quarter of last.