Earnings set to rise 5% Smurfit Kappa

Earnings per share at Smurfit Kappa Group are expected to grow by up to 5% next year, with the company saving more than €20 million in annual interest costs on the back of it repaying €500m worth of debt five years ahead of maturity.

The Dublin-based international paper and packaging group yesterday announced its intention to launch a €500m senior note offering, via its wholly-owned Smurfit Kappa Acquisitions subsidiary. The net proceeds — together with some existing cash resources — will go towards redeeming all of the existing €500m, 7.75%-yield, senior notes due to be repaid in 2019, which SKG issued five years ago.

Analysts are expecting the latest redemption move to add 4%-5% to SKG’s earnings per share next year; with annualised cash interest savings of over €20m, excluding one-off associated costs.