Packaging firm’s profits soar by 140%

The packaging and paper group chaired by Dermot Smurfit, Powerflute, reported a 140% jump in pre-tax profits to €5.2m.

The company’s revenue increased by 15% from €57.7m last year to €66.3m this year, according to the company’s interim results for the first six months of the year issued to the London alternative investment market yesterday.

Mr Smurfit said the group’s strong performance was due to better than expected market conditions for paper and cardboard boxes that the group manufactures in Finland.

“This outcome reflects both favourable market conditions in the first half and the realisation of benefits from capital investment projects completed in 2012. Prices remained firm over the summer months despite the normal seasonal slowdown and we began the second half with a healthy forward order book.

“The board expects that the current momentum will be maintained and that the group will be cash generative during the second half,” he said.

Although there was an increase in the cost of raw materials, the group benefited from the delivery of investment projects that were completed last year and have begun to pay dividends in improvements in product performance, production capacity and manufacturing efficiency, the group’s report said.

The group owns one of only three European mills which supply a specialised cardboard that is strong and moisture resistant. It is used for the transportation of fruit and vegetables, high-value industrial goods, electrical appliances and car parts.

The group refinanced its €20m bank borrowing and is now fully funded until 2016.