Smurfit profit jumps by 33%

Pre-tax profits at Smurfit Kappa Group grew by 33% — on a year-on-year basis — to €295 million, in the first nine months of this year.

The Dublin-headquartered international paper and packaging giant yesterday reported basic earnings per share of 84.9c for the period — which was 59% up on the corresponding period in 2011. Elsewhere, operating profit for the nine months was up by 2%, on a like-for-like basis, at €486m excluding the impact of exceptional items. Group revenue was largely unchanged at just over €5.5bn.

The year-to-date figures were helped by a strong third quarter performance — which significantly beat market estimates. The three months to the end of September saw SKG deliver respective like-for-like increases of 24% and 50% in pre-tax profits and basic earnings per share — to €105m and 33.4c.

Operating profit, for the quarter, rose by 12% to €181m; although revenue for the period was down — year-on-year — by 2% to €1.83bn.

According to chief executive, Gary McGann: “This performance reflects the strength of the group’s integrated model and the benefits of its operating efficiency in a generally soft macro-economic environment. Our differentiated European offering and extensive market footprint has underpinned a strong performance in the period.”

Management said it expects full-year EBITDA (earnings before interest, tax, depreciation and amortisation) to be in line with last year’s total; which amounted to just over €1bn — 12% up on the previous year — on a pre-exceptional item basis.

Third quarter EBITDA — up by 6%, year-on-year, to €280m and up by 10% on a quarter-by-quarter basis — was 2% ahead of Davy Stockbrokers’ forecasts for the three month period and nearly 10% ahead of the market consensus of €255m.

Davy’s Barry Dixon said: “This is a very impressive set of results from SKG in terms of profit growth and debt reduction — particularly in what is believed to be a very difficult economic environment in the eurozone.”