Smurfit Kappa profits rise 20% in first quarter

Packaging group Smurfit Kappa saw its profit jump by 20% in the first quarter of this year, netting the company an extra €30m.

The company’s first-quarter earnings before interest, taxes, depreciation, and amortisation (EBITDA) were €246m, a 1% increase on last year.

The group’s strong performance was boosted by its Latin American operation. Businesses in that region contributed 23% of the group’s overall EBITDA in the quarter, worth over €56m.

Chief executive Gary McGann said: “We are pleased to report a relatively strong EBITDA of €246m for the first quarter.

“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.”

Barry Dixon, an analyst with Davy Stockbrokers, said the company would outperform the market and was earning money to pay down its debts.

Smurfit Kappa is carrying debts of €2.7bn, although this has reduced by 9% over the last year.

Smurfit Kappa chairman Liam O’Mahony told the AGM yesterday that the board is recommending a final dividend of 15c per share for last year. The dividends are to be paid in October and May.

“The board believes that SKG now has the capital structure and cash-flow characteristics to sustain a progressive dividend stream,” Mr O’Mahony said.