Smurfit Kappa operating profits up 53%

Smurfit Kappa today reported positive results for Q4 and full-year 2010, including a 10% increase in full-year revenues and EBITDA growth of 22%.

Revenue for the 12 months to end December was €6,677m, up from €6,057m for 2009, while EBITDA before exceptional items and share-based payments €904m, up from €741m last year.

Operating profits of €409m for 2010 were up 53% on the €267m reported in 2009.

“The Group is pleased to report a 22% growth in EBITDA for 2010 and a reduction of its net debt to EBITDA ratio to 3.4x,” said CEO Gary McCann.

“Further meaningful progress on de-leveraging is expected in 2011.”

EBITDA margin for Q4 was 14.7%, which McCann said primarily reflected “an ongoing focus on driving operating efficiency, better than expected demand in the period, and further progress on pricing recovery, both in Europe and in Latin America.”

“Current business conditions support continued price recovery with input costs rising and demand remaining strong. Industry inventory levels remain at a satisfactory level and the supply outlook is favourable,” Mr McCann added.

“These factors, together with SKG’s ongoing cost control initiatives, should deliver further performance improvement and earnings growth in 2011.

“In that context, the Group currently expects its free cash flow generation to be materially stronger in 2011, which should translate into significant debt paydown, and enhance the available range of strategic and financial options.”